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Friday, March 12, 2021

N42bn indebtedness: Telcos to shut down USSD options - ITREALMS

ITREALMS ... making leadership SENSE with digital news!

Bearing all unresolved over N42 billion indebtedness by the Nigerian banks, under the Financial Service Providers (FSPs), the Mobile Network Operators (MNOs) have concluded plans to shutdown the Unstructured Supplementary Service Data (USSD) options with effect from Monday, March 15, 2021, reports ITREALMS.

USSD is a Global System for Mobile Communications (GSM) protocol that is used to send text messages and make digital financial transactions similar to the Short Messaging Service (SMS), thereby using codes made up of the characters that are available on a mobile phone.

Disclosing this to ITREALMS on Friday, the MNOs under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) said from Monday, their members in this regard, the MNOs have commenced a phased process of withdrawal of USSD services based on the most significant debtors within the FSPs.

ALTON through its chairman, Engr. Gbenga Adebayo and Head of Operations, Mr. Gbolahan Awonuga confirmed to ITREALMS, saying that they have reached a point of no return and the withdrawal has become unavoidable.

“We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable, however, we remain committed to working closely with the relevant Ministries and regulators to resolve this issue as quickly as possible,” ALTON informed 

According to ALTON, “To minimise the disruption to customers, and with the concurrence of the Honourable Minster of Communications and Digital Economy (MoCDE) and the Nigerian Communications Commission (NCC), on the huge debt to the network operators; Mobile Network Operators will disconnect debtor Financial Service Providers (FSPs) from USSD services, until the huge debt is paid.”

ITREALMS recalls that it has been over eight months since NCC issued an updated pricing methodology for USSD services for financial transactions in the country.

“The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards,” ALTON lamented.

The group of regretted that during this period, MNO’s have continued to provide access to USSD infrastructure and its members have continued to pay all Bank charges and fees to access the Banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over Forty-Two Billion (N42B) Naira.

ITREALMS also gathered that the removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50.

ALTON pointed out that the banks and telcos would ordinarily be applauded for collaborating towards the financial inclusion objectives of the Federal Government, but regretted the actions of the FSPs.

Whilst the withdrawal of USSD service is in place, ALTON urged telecom subscribers in the country explore alternatives.

“We encourage our subscribers to kindly explore alternative channels with their banks,” ALTON warned.

Remmy Nweke/DoP

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