USSD charges: Banks’ debt to telcos hits N17b

The total debt owed telecos in the country through the use of Unstructured Supplementary Service Data (USSD) by deposit money banks (DMBs) has risen to N70 billion, it was gathered on Thursday.

The telecoms operators and the banks had locked horns over which of them will deduct charges for bank transactions carried out through the USSD platform provided by telecom infrastructure. The banks had asked the telcos to charge customers while they too will charge them, translating to double charging the customers.

Speaking virtually at the Association of Telecoms Companies of Nigeria (ATCON’s) forum on “Meeting the Interests of Government, Consumers and Telecoms Companies in the Era of Covid-19 and Post-Covid-19 Pandemic for Digital Economy Development”, the CEO, Nigerian Communications Commission (NCC), Prof Garba Danbatta said the debt accumulated following the regulator’s suspension of its Determination on USSD Pricing last year.

The CEO said the final settlement of the issue would be achieved through a tripartite agreement among the lenders– the Central Bank of Nigeria (CBN) and the telecoms regulator.

The telcos had accused the banks of converting USSD channel, which should be a service channel dedicated to promoting financial inclusion, into a money-spinning platform. They had also threatened to shut it down should the banks fail to do the needful.

A letter addressed to the Body of Banks’ Chief Executive Officers (BOBCEOs) by the Association of Licensed Telecoms Companies of Nigeria (ALTON) had rejected BOBCEOs allegation that its members were sabotaging the financial inclusion drive of the CBN.

“We write with reference to the letter dated September 16, 2019 from BOBCEOS, addressed to some of our members alleging anticompetitive practices on Reverse Corporate Billing for Bank USSD Services.

“In the referenced letter, the BOBCEOS, amongst others, the demand to banks to subscribe to corporate-level billing compels them to pay N4.5 per 20secs USSD session; amounting to 450per cent increase in tariff;  the USSD cost will destroy the financial inclusion strides made by banks where 20m or more citizens have been included via services running on USSD; the USSD cost would render the laudable financial inclusion initiatives of the Federal Government of Nigeria unsustainable which would impede development and economic growth; reverse corporate billing gives no visibility on actual sessions used, forces banks to pay for failed sessions and leaves banks exposed to spurious USSD usage that will increase the cost; it is proposing the implementation of end-user billing for bank customers,” the letter explained.

Explaining the Commission’s efforts at resolving consumer-related issues, he noted that when the Commission introduced the Do-Not-Disturb (DND) code in 2015, less than 500,000 people activated the code, adding that there are now 22,722,366 lines on the DND now.

Prof Danbatta further stated 98 percent of the total service-related complaints received from telecoms consumers within a 15-month period, spanning January 2019 to April 2020, have been successfully resolved by the Commission.

Speaking on quality of service, he said: “The Commission has monthly engagements with operators as well as quarterly industry working group on quality of service and shortcodes, and is currently monitoring 2G Key Performance Indicators (KPIs), while that of 4G are being prepared.”

The NCC said the amendment to its USSD determination was necessitated by a protracted dispute between Mobile Network Operators (MNOs) and financial institutions on the applicable charges for USSD services and the method of billing. As a responsive and effective regulatory authority, the Commission recognises that its policies are not static and may be modified from time to time as circumstances demand.

According to Danbatta, in the interest of the consumers and other stakeholders, the Commission revised the determination previously issued by removing the price floor and the cap to allow mobile network operators and the banks negotiate rates that will be mutually beneficial to all parties concerned.

The NCC also determined that MNOs must not charge the consumers directly for the use of USSD channels for financial services in the form of end-user-billing, but revert to corporate billing. The transaction should be between the MNOs and the entity to which the service is provided, that is banks and financial institutions.The total debt owed telecos in the country through the use of Unstructured Supplementary Service Data (USSD) by deposit money banks (DMBs) has risen to N70billion, it was gathered yesterday.

The telecoms operators and the banks had locked horns over which of them will deduct charges for bank transactions carried out through the USSD platform provided by telecom infrastructure. The banks had asked the telcos to charge customers while they too will charge them, translating to double charging the customers.

Speaking virtually at the Association of Telecoms Companies of Nigeria (ATCON’s) forum on “Meeting the Interests of Government, Consumers and Telecoms Companies in the Era of Covid-19 and Post-Covid-19 Pandemic for Digital Economy Development”, the CEO, Nigerian Communications Commission (NCC), Prof Garba Danbatta said the debt accumulated following the regulator’s suspension of its Determination on USSD Pricing last year.

The CEO said the final settlement of the issue would be achieved through a tripartite agreement among the lenders– the Central Bank of Nigeria (CBN) and the telecoms regulator.

The telcos had accused the banks of converting USSD channel, which should be a service channel dedicated to promoting financial inclusion, into a money-spinning platform. They had also threatened to shut it down should the banks fail to do the needful.

A letter addressed to the Body of Banks’ Chief Executive Officers (BOBCEOs) by the Association of Licensed Telecoms Companies of Nigeria (ALTON) had rejected BOBCEOs allegation that its members were sabotaging the financial inclusion drive of the CBN.

“We write with reference to the letter dated September 16, 2019 from BOBCEOS, addressed to some of our members alleging anticompetitive practices on Reverse Corporate Billing for Bank USSD Services.

“In the referenced letter, the BOBCEOS, amongst others, the demand to banks to subscribe to corporate-level billing compels them to pay N4.5 per 20secs USSD session; amounting to 450per cent increase in tariff;  the USSD cost will destroy the financial inclusion strides made by banks where 20m or more citizens have been included via services running on USSD; the USSD cost would render the laudable financial inclusion initiatives of the Federal Government of Nigeria unsustainable which would impede development and economic growth; reverse corporate billing gives no visibility on actual sessions used, forces banks to pay for failed sessions and leaves banks exposed to spurious USSD usage that will increase the cost; it is proposing the implementation of end-user billing for bank customers,” the letter explained.

Explaining the Commission’s efforts at resolving consumer related issues, he noted that when the Commission introduced the Do-Not-Disturb (DND) code in 2015, less than 500,000 people activated the code, adding that there are now 22,722,366 lines on the DND now.

Prof Danbatta further stated 98 per cent of the total service-related complaints received from telecoms consumers within a 15-month period, spanning January 2019 to April 2020, have been successfully resolved by the Commission.

Speaking on quality of service, he said: “The Commission has monthly engagements with operators as well as quarterly industry working group on quality of service and short codes, and is currently monitoring 2G Key Performance Indicators (KPIs), while that of 4G are being prepared.”

The NCC said the amendment to its USSD determination was necessitated by a protracted dispute between Mobile Network Operators (MNOs) and financial institutions on the applicable charges for USSD services and the method of billing. As a responsive and effective regulatory authority, the Commission recognises that its policies are not static and may be modified from time to time as circumstances demand.

According to Danbatta, in the interest of the consumers and other stakeholders, the Commission revised the determination previously issued by removing the price floor and the cap to allow mobile network operators and the banks negotiate rates that will be mutually beneficial to all parties concerned.

The NCC also determined that MNOs must not charge the consumers directly for the use of USSD channels for financial services in the form of end-user-billing, but revert to corporate billing. The transaction should be between the MNOs and the entity to which the service is provided, that is banks and financial institutions.

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.