Suspense as telcos await minister’s stance before switching off banks USSD service
• Expert says sector’s regulation on its knees and will impact investment negatively
• MNOs want banks to come up with repayment plans
Telecommunications operators have put on hold the planned switch-off of banks’ Unstructured Supplementary Service Data (USSD) service platforms, popularly called bank transfers, which was expected to take effect today.
The operators have been prevailed upon by the Minister of Communications and Digital Economy, Dr. Isa Pantami, who urged the service providers to wait for the outcome of today’s stakeholders’ meeting on the matter.
The operators, under the aegis of Association of Licensed Telecoms Operators of Nigeria (ALTON), had issued a warning on Friday that it will switch off the USSD platform the banks used in servicing the banking populace in the country, which runs on telcos infrastructure.
ALTON claimed banks owed its members N42 billion following service rendered in the last eight months, which have not been considered by the financial institutions for payment. The body had informed that suspension of access to USSD channel for top owing banks would happen today between the hours of 0900 – 1600hrs, while total suspension of access for top owing banks will happen on March 18, and total suspension of access for all owing banks will begin on March 24.
However, in a statement issued on behalf of Pantami by his Technical Assistant (Information Technology), Dr. Femi Adeluyi, at the weekend, the Minister directed that the planned suspension of the USSD services by the MNOs be put on hold.
The statement said as part of measures aimed at addressing the challenges of rendering USSD services to banks and other financial institutions by MNOs, an amended Determination on USSD Pricing was issued by the Nigerian Communications Commission (NCC) on the July 24, 2020. However, the issues persisted, hence the decision to suspend the service.
Further, the statement disclosed the Minister sent a letter with respect to the issues to the Governor of the Central Bank of Nigeria on March 3, 2021, regarding the need to direct the banks to do the needful.
“In a bid to ensure an amicable resolution of the impasse, Dr Pantami has called for a meeting of all stakeholders, including the Governor of the Central Bank of Nigeria, the Executive Vice Chairman of NCC, the MNOs and the financial institutions. The meeting is scheduled to hold today, March 15.
The outcome of the meeting will determine the next steps regarding the status of the USSD financial services,” the statement informed.
MEANWHILE, should the planned switch off get the minister’s backing after the meeting of today; everyone will be impacted, according to the President, Association of Telecommunications Companies of Nigeria (ATCON), Ike Nnamani.
Nnamani said it means bank customers would not have access to the USSD services including authentication of some transactions, which will disrupt the daily activity of citizens.
The Guardian gathered that some 40 million Nigerians make use of the USSD service in the country, where transactions worth over N230 billion are carried out almost on a monthly basis.
Nigeria Coordinator, Alliance for Affordable Internet (A4AI), Olusola Teniola, said the USSD issue took a turn for the worst when the bankers’ committee thought incorrectly that they can use telco assets and not pay for it.
Teniola said the directive of NCC in July 2020 clarified that a stop to ‘end user billing’ favoured by the banks should prevail, stressing that anything other than this would amount to double billing to banks’ clients.
“The fact that the minister of Communications and Digital Economy intervened in the matter implies that corporate billing to the banks went unpaid for close to a year since the impasse presented itself. The USSD debt will continue to rise if banks refuse to pay their bills and will get to a level that is unsustainable.
“Suspension of any service due to debt accumulation is standard practice in the industry and precedes negotiation and resolution. The FMoCDE and NCC seek a negotiation first and a possible resolution to avoid suspension or outright disconnection by the service providers. The impact will affect the banks and their clients who rely on USSD to carry out their daily banking transactions. The banks should immediately enter into a repayment agreement to pay off their outstanding USSD debts,” he stated.
Commenting on the suspension as directed by the minister, a former president of ATCON, Titi Omo-Ettu, said the entire process showed that regulation is on its knees and that can only mean bad for investment.
Going memory lane into the genesis of the matter, Omo-Ettu said there may not have been a problem if the ministry and the regulator are together on the subject, “but indeed there is problem, if the directive is not based on sound industry study and due consultations, whether or not the regulator is comfortable.
“I do not know the details, but it is clear that this meeting, (scheduled for today, March 15) which should have held prior to a pronouncement, at the instance of the regulator, shows that all is not well. Things cannot be well when there is no order. As we speak, there is no order in the industry.
“Certainly there may be justification for the decision that is being contemplated but it would be ideal if the regulator had carried out a credible study, which shows the direction to go and then holds necessary consultation before a regulatory direction (not ministerial directive) is made,” he stated.
Omo-Ettu, an engineer, said: “If 2023 were only a few months away, I would have just suggested that we keep our fingers crossed,” he stressed.
On his part, the Executive Secretary, ATCON, Ajibola Olude, said should the matter not be resolved amicably, it will have huge negative effects on the banking sector, which is going to lead to losses on the part of bank and MNOs.
According to him, it is going to cripple the economic transactions that should have taken place and Nigerians would be forced to go back to the bank halls, which may lead to further spike of COVID-19 pandemic.
He urged the Minister of Communications and Digital Economy to prevail on the banks to come up with the repayment plan of the alleged N42 billion debt.
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