N250bn Debt: Telcos Threaten To Withdraw USSD Services From Banks

Telcos Withdraw USSD from Banks: Nigeria’s telecom operators are pushing for regulatory approval from the Nigerian Communications Commission to withdraw Unstructured Supplementary Service Data services from banks due to an outstanding debt of over N250bn.

USSD, also known as quick or feature codes, is a global system for mobile communications (GSM) protocol that is used to send text messages and initiate financial transactions such as cash transfers, balance inquiries, payments for services, and others. 

Telcos Withdraw USSD from Banks If Complaints Not Resolved

In 2019, telecommunication companies (telcos) said they could no longer provide the services for free and proposed to take a cut of N4.50k per 20 seconds from the charges paid by customers to the banks. 

However, banks kicked against it, alleging that it would raise costs by 450 percent.

Speaking to journalists on Monday in Lagos, Toriola said mobile network operators (MNOs) might, subject to regulatory approval, suspend supporting the use of the service on the network for banking operations, as the debt had continued to pile up and was becoming unsustainable to the operators.

He expressed optimism that Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN) and Aminu Maida, the executive vice chairman of NCC would resolve the impasse soon.

However, Toriola said if it is not resolved, the “operators would be compelled to seek regulatory approval to discontinue allowing commercial banks to run transactions on the platform”.

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According to the CEO, the telecom sector is lying critically ill in the intensive care unit (ICU) and may die if the appropriate therapy is not applied to it.

“MTN and the entire industry are in a dire situation. MTN is loss-making because of naira devaluation,” Toriola said.

The fundamentals need to change. Tariffs have to be changed. Inflation has continued to go up, affecting the prices of commodities, including foodstuffs and services.”

He added that the complete deregulation of the downstream oil sector has seen the pump price of petrol rise to over N1,000 in the country.

He went on to say, Toriola said the company might shut down if the government does not approve the tariff adjustment requested by the network providers.

“There should be no delusion, if the tariff doesn’t go up we will shut down,” he said.

According to the CEO, MTN was one of the highest payers of corporate income tax to the Federal Inland Revenue Service (FIRS), however, the company has gone down to zero since the telco has stopped making profit.

He said the company has been surviving because it is spending its savings and the industry is living on borrowed time. 

“We must return the industry to profitability,” the CEO said.

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