Possible shutdown of the unstructured supplementary service data (USSD) appears near as telecommunications operators have disclosed that the debts owed by deposit money banks (DMBs) have hit N200 billion.
Telecom operators said no major resolution has been reached on the matter, stressing that though there have been talks, considerable actions largely on the part of the banks.
Shutdown of service means that bank customers will no longer access transactions done on mobile phones like fund transfers through short codes, checking of bank details and account balances, among others which can even be accessed without data or Internet connections.
The Guardian noted that this fracas between the telcos and DMBs will be entering its fifth year by 2024 without any possible headway for a major truce. This challenge implies that the Federal Government’s 95 per cent financial inclusion target of 2024 may not be realised after all.
Speaking under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the telecoms operators said the debt must be paid in total and would not hesitate to block debtor banks from accessing the service anytime soon.
ALTON Chairman, Gbenga Adebayo, stated this yesterday, in Lagos at the first telecoms stakeholders’ meeting with the Executive Vice Chairman of Nigerian Communications Commission (NCC), Dr. Aminu Maida. The meeting was organised by the NCC.
Adebayo said despite all appeals, meetings and interventions by the Ministry of Communications, Innovation and Digital Economy, Central Bank of Nigeria (CBN), and NCC, largely during the last administration, the banks have kept mute overpayment.
The ALTON boss said the value of the debt would keep rising based on the fluctuating challenges confronting foreign exchange stability in the country.
Adebayo, who said the matter needed to be resolved as fast as possible to avoid the collapse of the sector, noted that the debt is not allowing the operators to further expand services.
“Of course, we can confirm that there had been talks, largely before now, but no progress has been made. The matter needs to be resolved as fast as possible to avoid service shut down,” he stated.
However, a chief information officer of one of the first-generation banks, who spoke on the condition of anonymity with The Guardian, said: “The matter would be resolved one day and very soon. As I have said before now, the matter is technical, especially in understanding what constitutes a successful transaction from a bank and telco perspective.”
The CIO however, expressed deep concern about how fast and large the debt is getting, saying: “This is becoming ridiculous, we just hear figures upon figures. I remember the last discussion I had on this matter, the figure peddled then was N120 billion in April or May, now, you people are just brandishing figures here and there, now it has climbed to N200 billion. I think it is high time the banks and telcos resolved this matter. It is becoming embarrassing.”
Recall that the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, had last month sought the DMBs’ understanding of the need for the payment of the debts.
He stated this when ALTON leadership visited him in Abuja. The minister had said: “It is work to be done together. Innovations have to play a key role in resolving the issues. The banks should not expect free service as there are costs to every service rendered.”
Already, the Chief Executive Officer of Guaranty Trust Holding Company Plc, Segun Agbaje, described USSD as a clumsy technology, arguing that the only way to actualise financial inclusion in Nigeria is to drastically reduce the cost of data.
He stated this earlier in May, saying the USSD is not state-of-the-art technology, which is why other developing countries like India do not use it.
He argued that the ongoing fight between banks and telcos over USSD is nothing but a distraction by telecoms firms from the real issue of high data cost. He said that Nigeria has one of the highest data costs in the world. And this is not good for financial inclusion and the overall economic development of the country.
“USSD is a clumsy technology. It’s not state-of-the-art. The best way to have financial inclusion is to reduce the cost of data so that data becomes more affordable. Then we can use what is a superior technology.
“The whole fight about USSD has been a fantastic distraction by the telcos. The rising cost of data in Nigeria versus other economies like ours has been distracted by USSD.
“If you want financial inclusion, then you need to bring down the cost of data. And when you bring down the cost of data, you start to eradicate USSD. But if you insist on using USSD, the banks have told the telcos to charge the end users. The banks don’t get any of the charges. The banks are saying we don’t want to be involved. If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.
“I keep telling everybody who cares to listen that USSD is not the answer. The answer is to get the cost of data down in Nigeria. If you compare the cost of data in Nigeria to elsewhere, you’d realise that we are being exploited.”