The Central Bank of Nigeria (CBN) intervened to break the standoff between telecom operators and deposit money banks (DMBs) over the accumulated N120 billion in unstructured supplementary service data (USSD) debt, according to the Nigerian Communications Commission (NCC).
Prof. Umar Danbatta, Executive Vice Chairman of the Nigerian Communications Commission (NCC), revealed this yesterday in Lagos and claimed that the situation had been fairly settled.
He emphasized that the USSD was crucial in closing the gap in the country and that financial inclusion has already reached 70% with the aid of the telecoms sector.
At the Telecom Executives and Regulators Forum (TERF) held in Lagos, Danbatta stated that the banks had agreed to pay off the accumulated debt and keep paying for the USSD service moving forward under the corporate billing term following the intervention of Acting Governor of the CBN, Folashodun Shonubi.
The issue was rectified, according to the EVC, at a recent meeting between the interim CBN Governor, the NCC, telecom providers, and banks.He claimed that the realization that telecoms services are necessary for financial inclusion led to the resolution’s success.
Danbatta recalled that banks’ insistence on end-user charging rather than corporate billing caused debt accumulation as the problem’s root cause.
The banks receive the USSD service, which they then pass along to their consumers. Who should foot the bill for the service was the question.
“They wanted end-user billing, but we said the service is being provided to the banks, not to their customers. The banks charge their customers for the service, and they are to pay the telcos in the form of corporate billing, which is neat.”
“Then along the way, there was a misunderstanding and the debt kept piling until it reached a humongous amount of over N100 billion. Even at that, the service was still being provided to customers by the banks using the telecom infrastructure and the telcos were being paid nothing. This was despite the intervention of the immediate past Minister,” Danbatta clarified.
He pointed out that up until recently, when the Acting CBN Governor stepped in, the situation had not changed. According to the EVC, the head of the top bank stated that without the USSD service, there would be no digital financial inclusion and nowhere near the level of penetration that it is today.
Because telcos are driving it, the index or penetration of digital financial inclusion is currently about 70%. Therefore, paying for the service shouldn’t be a problem. Any service has a cost. All we ask is that you pay the telcos. Okay, and while we’re at it, pay them for the debt that has accrued and then pay them for the service that they are providing right now.
“At a meeting between the acting CBN governor, the NCC, the telcos and the banks, it was acknowledged that the debt exists, that going forward, the service has to be paid for by the banks through corporate billing. It is an important development for the telecoms industry that we have found an amicable resolution to the problem because we’re all serving the same government. We do not want to disrupt financial services in the country.”
“We want to see the financial inclusion penetration to even go higher. We want it to be ubiquitous, but we cannot do this without settling the legacy debt, as well as paying for the service that is being provided,” he stated.
Danbatta highlighted that financial inclusion has reached a 70% penetration in the nation thanks to ICT/telecommunications, adding that the telecoms sector still serves as the backbone for other sectors due to its enormous economic importance.
The EVC claimed further innovation and revolution that would considerably advance the economy would soon be born while urging more support for the sector.
