The unstructured supplementary service data (USSD) may soon be shut down, according to telecom operators who revealed that deposit money banks’ (DMBs’) debts have reached N200 billion.
Telecom providers stressed that although there have been negotiations, significant steps have been taken, primarily by the banks and that no significant settlement has been achieved on the problem.
Bank customers who conduct mobile transactions, such as fund transfers using shortcodes, checking account balances and bank details, and other activities that can even be completed without data or Internet connections, will no longer be able to do so due to the shutdown of services.
According to The Guardian, there is no chance that there will be a significant ceasefire before 2024 when the conflict between the telcos and DMBs would have entered its fifth year. This obstacle suggests that the Federal Government’s 2024 goal of 95% financial inclusion might not actually be met.
Speaking on behalf of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the telecom providers said that the debt had to be settled in full and threatened to immediately prevent the banks that owed the money from using the service.
This was said by ALTON Chairman Gbenga Adebayo yesterday in Lagos during the inaugural telecom stakeholders’ meeting with Dr. Aminu Maida, the Executive Vice Chairman of the Nigerian Communications Commission (NCC). The NCC arranged the gathering.
Adebayo claimed that the banks had remained silent about overpayment in spite of all pleas, discussions, and interventions by the Ministry of Communications, Innovation and Digital Economy, Central Bank of Nigeria (CBN), and NCC, mostly during the previous government.
The head of ALTON predicted that the debt would continue to grow due to the varying difficulties facing the nation’s foreign exchange stability.
Adebayo pointed out that the debt is preventing the operators from further expanding services, and that the issue needs to be rectified as quickly as possible to prevent the industry from collapsing.
Naturally, we can attest to the fact that there have been discussions, mainly prior to now, but no real headway has been made. In order to prevent a service outage, the issue must be handled quickly,” he said.
But according to a chief information officer of a first-generation bank who talked with The Guardian under anonymity, “the issue would be resolved one day and very soon.” As I’ve stated previously, the issue is technical, particularly when it comes to knowing what, from the standpoint of the bank and telco, constitutes a successful transaction.
However, the CIO voiced serious concerns about the size and speed at which the debt is growing, stating, “We just hear figures upon figures; this is getting ridiculous.” When I last discussed this issue with you guys, the amount being pushed was N120 billion in April or May. Now that you guys are merely pointing to numbers here and there, it has increased to N200 billion. I believe that the banks and telcos ought to have settled this issue long ago. It’s starting to seem awkward.
Recall that last month, Dr. Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, asked the DMBs to clarify for them why the debts needed to be paid.
When the ALTON leadership paid him a visit in Abuja, he said as much. “It is work to be done together,” the minister had stated. The solutions to the problems must largely rely on innovations. Since every service has expenses associated with it, banks shouldn’t expect free service.
Segun Agbaje, the CEO of Guaranty Trust Holding Company Plc, has already called USSD a cumbersome technology and stated that the only way to truly achieve financial inclusion in Nigeria is to significantly lower data costs.
He said as much earlier in May, claiming that other developing nations like India do not employ the USSD because it is not cutting-edge technology.
He maintained that telecom companies are only using the ongoing dispute between banks and telcos over USSD as a cover for the true problem of excessive data costs. According to him, Nigeria has some of the highest data expenses globally. Furthermore, this is detrimental to the nation’s general economic growth and financial inclusion.
“USSD is a rather awkward technology. It isn’t cutting edge. The best approach to achieve financial inclusion is to lower the price of data, making it more accessible. After that, we’ll be able to utilize better technology.”
“The telecom companies have created a great diversion with the whole USSD dispute. USSD has diverted attention from the rising cost of data in Nigeria relative to other countries similar to ours.”
“You must lower the cost of data if you want financial inclusion. Additionally, USSD begins to disappear as data costs decrease. However, the banks have instructed the telcos to charge the end consumers if they persist in utilizing USSD. None of the charges are received by the banks. The banks are stating that they do not wish to become engaged. Please feel free to charge N20 for the service. However, gather it yourself. Do not come to us.”
“I continue to warn anyone who would listen that USSD is not the solution. Reducing the cost of data in Nigeria is the solution. You would see that we are being taken advantage of if you looked at the price of data in Nigeria compared to other places.”
