Market News

By Justice Okamgba

Telecom operators in Nigeria are seeing some progress in the repayment of the N250bn debt tied to Unstructured Supplementary Service Data services, with smaller banks beginning to settle their obligations.

However, tier-one lenders responsible for the bulk of the debt are yet to make significant payments.

The Chairman of the Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, revealed this development to The PUNCH on Thursday.

He said, while some repayments have been recorded, they fall short of expectations.

“We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming,” Adebayo said on a call.

“We are now waiting for intervention from regulators, including the Central Bank of Nigeria and the Nigerian Communications Commission, to resolve the issue,” he stated.

Telecom operators have raised concerns over the impact of the unpaid debt on the sustainability of USSD services, which allow customers to perform financial transactions without an internet connection.

The ALTON chair reiterated that telcos might be forced to discontinue USSD services for banks if the debt is not resolved.

Adebayo emphasised the need for coordination between the CBN and NCC to safeguard the health of both the telecommunications and financial sectors.

“The financial and digital economy depend on this service. It’s critical for regulators to step in swiftly to ensure resolution,” he said.

Mobile operators have previously threatened to suspend USSD services over unpaid debts, but such moves were halted following interventions by government authorities. telecom operators and banks over charges for USSD services. Telecom operators began billing at N6.98 per transaction in 2021 after regulatory approval.

The dispute began in 2019 when telecom operators proposed a charge of N4.50 per 20 seconds for USSD services, which banks opposed, arguing the fees would lead to an increase in costs.

In 2021, after an accumulated debt of N42bn, telecom operators threatened to suspend USSD services, but intervention by the former Minister of Communications and Digital Economy, Isa Pantami, averted the suspension and led to the revised N6.98 fee.

Despite these efforts, the debt has continued to grow, and Adebayo warned that without a lasting solution, telecom operators may be forced to withdraw USSD services from banks.

When asked about the timeline for the withdrawal of service to commence, Adebayo responded, “There is no timeline yet; we are still waiting on the regulators.”

Recently, MTN Nigeria’s CEO Karl Toriola said telecom operators might seek regulatory approval to suspend USSD services for banking operations if the debt remains unresolved.

“The debt has become unsustainable for telecom operators. While we remain hopeful that the intervention of the CBN Governor, Olayemi Cardoso, and the NCC’s Executive Vice Chairman, Aminu Maida, will yield results, operators may be compelled to discontinue these services if no progress is made,” Toriola said.

Telcos said the impasse has placed significant pressure on the telecom, with stakeholders calling for swift action to avoid potential disruptions to USSD services, which millions of Nigerians rely on for daily financial transactions.

In October, the Director at Adaba Consult, Ejike Onyeaso, told The PUNCH that telecom companies are upset with banks over inadequate payments for leased lines used for services like USSD.

He stressed that since banks generate revenue through these services, they should compensate telecom firms. Onyeaso also warned that if telecom providers act on their threats to suspend services, it could disrupt banking operations.