Telecom operators in Nigeria are reportedly preparing to suspend Unstructured Supplementary Service Data (USSD) services to Deposit Money Banks (DMBs) over unpaid debts amounting to over N200 billion. The Nigerian Communications Commission (NCC) has reportedly given its approval for this action, as most banks have failed to settle the debts despite repeated directives.
According to sources, only four banks have complied with the payment directive as of December 31, 2024, while 18 banks remain indebted. The Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, stated that the suspension will initially last for two weeks to alert bank customers who rely on USSD services for financial transactions.
After the two-week suspension, telecom operators plan to completely withdraw USSD services from non-compliant banks, allowing customers to switch to banks that have settled their debts. The decision, though difficult, is seen as necessary to resolve the debt issue, which has accumulated over the past four years.
This move is expected to impact millions of customers who use USSD codes for banking services such as fund transfers, account balance checks, and bill payments.
The ongoing conflict between Nigerian telecom operators and Deposit Money Banks (DMBs) over unpaid Unstructured Supplementary Service Data (USSD) debts has escalated, with telcos threatening to suspend services. Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have issued repeated directives urging banks to clear their debts, with the most recent circular setting a deadline of December 31, 2024. However, only four banks have complied, while 18 remain in default.
Background of the USSD Debt Crisis
- Development and Charges:
In 2018, telcos developed USSD codes and initially charged customers directly. However, complaints of double charges led regulators to change the system, allowing banks to charge customers while remitting N6.98 per transaction to telcos. - Non-Remittance:
Since 2019, banks have failed to consistently remit USSD fees. The debt has grown significantly over time: - 2019: ₦32 billion
- March 2021: ₦42 billion
- November 2022: ₦80 billion
- June 2023: ₦120 billion
- October 2024: Over ₦200 billion
- Debt Write-Offs:
To encourage repayment, telcos wrote off 40% of the total debt, asking banks to settle just 60%, but most banks still refused, citing various excuses.
Planned Actions
- Suspension of Services:
NCC has reportedly approved a two-week suspension of USSD services to indebted banks to notify their customers. Afterward, services will be fully withdrawn for non-compliant banks.
- Legal Action:
Telcos have considered taking legal action against the banks if the issue remains unresolved.
Impact on Customers
The suspension will disrupt financial transactions for millions of Nigerians who rely on USSD services for banking. Customers may need to switch to compliant banks to continue using USSD-based services, further pressuring defaulting banks to settle their debts.
The crisis underscores the need for improved collaboration and regulatory enforcement between telecom operators, banks, and financial authorities to resolve the stalemate