Telecom Operators to withdraw USSD Services from Banks as FG intervenes

Telecom Operators in Nigeria have decided to withdraw their Unstructured Supplementary Service Data (USSD) short code services to banks and other financial institutions due to huge accumulated debt of N42Billion see more details below.

Telecommunication firms under the aegis of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), has announced that their members will withdraw their Unstructured Supplementary Service Data (USSD) services to financial institutions due to huge accumulated debt.

According to a report from the News Agency of Nigeria (NAN), this disclosure is contained in a statement issued by ALTON and signed by its Chairman, Gbenga Adebayo and its Head of Operations, Gbolahan Awonuga on Friday, March 12, 2021.

The association said that after reaching an agreement with the Minister of Communications and Digital Economy and the Nigerian Communications Commission (NCC), it would disconnect the Financial Service Providers (FSPs) from USSD services until the huge debt is cleared.

ALTON pointed out that its members have resolved to undertake a phased process of withdrawal of USSD services, starting with the most significant debtors within the FSPs with effect from March 15, 2021.

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ALTON said that it recognized its great importance as its members had continued to provide USSD services because millions of Nigerian customers usually have access to financial services through USSD infrastructure on a daily basis and had become reliant on these services due to the COVID-19 movement restrictions.

The ALTON in its statement said, “Unfortunately, due to huge indebtedness and the possibility to agree on a structure for these payments without asking end-users to pay, the government has been forced to intervene.

“The government intervened to ensure that a sustainable cost-sharing solution is agreed on, so that consumers do not get affected in the long-term.’

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It said that members deeply regret reaching a point where the withdrawal of these services had become unavoidable and expressed its commitment to working closely with the relevant ministries and regulators to resolve the issue as quickly as possible to minimise the disruption to customers.

The statement, however, encouraged subscribers to explore alternative channels with their banks, while the withdrawal of USSD service was in place.

What you should know

  • It can be recalled that the Minister of Communications and Digital Economy, Dr Issa Pantami, had issued a letter to the Central Bank of Nigeria, seeking a resolution of the on-going dispute between the banking sector and the telecoms sector over appropriate methodology to use to charge for USSD services.
  • The Executive Vice Chairman of NCC, Professor Umar Danbatta, while speaking at an event admitted that deposit money banks were owing telecommunication companies N42 billion for services provided by the mobile network operators through the USSD.
  • While stressing that the indebtedness has become an issue for a while now, he said that NCC was working hard to resolve the issue.

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FG intervention of this Issue

The Federal Government has directed telecommunication companies to suspend the planned withdrawal of banks’ Unstructured Supplementary Service Data (USSD) services.

This directive is contained in a press statement titled, ‘Impending Suspension of USSD Banking Services Put on Hold’, which was signed by the Technical Assistant on Information Technology to the Minister of Communications and Digital Economy, Femi Adeluyi, on Saturday, March 13, 2021.

The statement says that the Minister is intervening to ensure an amicable resolution of the dispute, adding that he has called for a meeting of all stakeholders.

The statement partly reads, ‘’The Honourable Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami, has directed that the impending suspension of the USSD services by the Mobile Network Operators (MNOs) be put on hold.

‘’The suspension which was to take effect on Monday, 15th of March, was due to the lingering debt owed MNOs by commercial banks for the provision of USSD banking services.’

“In a bid to ensure amicable resolution of the impasse, Dr Pantami has called for a meeting of all stakeholders, including Governor of the Central Bank of Nigeria, the Executive Vice Chairman of the NCC (Nigerian Communications Commission), the MNOs (Mobile Network Operators), and the financial institutions.

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