Telecom operators demand urgent settlement as USSD debts from banks rise to $200bn


The telecom operators, represented by the Association of Licensed Telecommunications Operators of Nigeria (ALTON), revealed on Thursday that the Unstructured Supplementary Service Data (USSD) debts owed to them by Deposit Money Banks (DMBs) have reached $200 billion.

ALTON Chairman, Gbenga Adebayo, emphasized during a stakeholder meeting with the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr. Aminu Maida in Lagos, that the entirety of the debt must be settled. Despite appeals, meetings, and interventions by the Central Bank of Nigeria (CBN) and NCC, the banks in debt have remained silent on payment.

Adebayo however highlighted that the debt’s value will continue to rise due to the fluctuating foreign exchange challenges in the country.

Effects of the telecom operators’ USSD debts in services and customer implications

The USSD system, a component for various mobile services such as mobile banking, balance inquiries, and prepaid mobile recharges, is now under strain due to unpaid debts. As telecommunication companies face financial challenges, their ability to maintain and improve service infrastructure is compromised, directly impacting the customer experience.

One significant implication is the potential degradation of service quality. Telecommunications operators rely on consistent revenue streams to invest in network maintenance, upgrades, and innovations. The USSD debts, however, divert financial resources away from these areas, leading to a situation where customers may experience disruptions, slower response times, and even service outages.

Telecom operators demand urgent settlement as USSD debts from banks rise to $200bn
ALTON Chairman, Gbenga Adebayo

Moreover, the debt issue could hinder the operators’ capacity to introduce new and improved services. Innovations that could enhance customer convenience and experience may be delayed or shelved altogether due to financial constraints arising from the USSD debts. This stagnation in service might leave customers yearning for enhanced features and functionalities that could have otherwise been implemented.

Customers themselves are not immune to the ripple effects of the USSD debt crisis. If new features are delayed, it directly impacts user satisfaction. Mobile banking transactions, often reliant on USSD codes, could face interruptions, leading to inconvenience for users who depend on these services for their day-to-day financial activities.

Furthermore, there is the potential for increased costs to be passed on to consumers. Telecommunications operators might adjust service charges or introduce additional fees to offset financial losses. This could burden customers who may find themselves paying more for the same or even diminished services.

Read More: New NCC EVC Aminu Maida vows to improve broadband penetration from 70% to 90% by 2025

Challenges plaguing Nigeria’s telecom industry

The telecommunications industry in Nigeria faces multifaceted challenges involving regulatory complexities and foreign exchange fluctuations. Navigating difficult regulatory frameworks hampers innovation, while currency value fluctuations affect operational costs, hindering investment in technology and infrastructure.

The USSD debt issue intertwines with these challenges, bringing along a measure of financial uncertainty. Despite these obstacles, the industry’s role in economic and social development calls for collaborative efforts between stakeholders and regulators to establish clear regulations and mechanisms, fostering a thriving telecommunications sector in Nigeria.

The role of NCC in USSD debt resolution

The Nigerian Communications Commission (NCC) plays a vital role in regulating and overseeing the telecommunications industry in Nigeria. The NCC is responsible for setting regulatory standards, ensuring fair competition, and safeguarding the interests of both consumers and service providers.

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In the context of the USSD debt issue, the NCC might mediate discussions between telecommunications operators and other stakeholders, such as Deposit Money Banks (DMBs). They are also engaged in providing guidance on regulatory frameworks and facilitating resolutions to financial disputes within the industry.

Read More: Breaking: Senate confirms Aminu Maida as Executive Vice Chairman of NCC

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