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Nigerian telecom operators have been experiencing progress in repaying the N250 billion debt owed on Unstructured Supplementary Service Data (<a target="_blank" href="https://www.techtarget.com/searchnetworking/definition/USSD" rel="noreferrer noopener">USSD</a>) services rendered to commercial banks. According to reports from the Association of Licensed Telecom Operators of Nigeria (<a target="_blank" href="https://www.alton.org.ng/index.html" rel="noreferrer noopener">ALTON</a>), smaller banks have begun clearing their debts, while tier-one lenders who take a larger share have yet to make a tangible mark.&nbsp;&nbsp; 
Last month, <a target="_blank" href="http://www.mtn.ng" rel="noreferrer noopener">MTN Nigeria</a> reported that it is owed N250 billion by Nigerian banks from its Unstructured Supplementary Service Data (USSD) rendered to bank customers. Consequently, the mobile network operator has sought regulatory approval to halt its USSD services for banking transactions unless the impasse is resolved.&nbsp; 
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 <img loading="lazy" decoding="async" width="1032" height="1032" src="https://technext24.com/wp-content/uploads/2022/06/Gbenga-Adebayo-ALTON.jpeg" alt="Telecom operators demand urgent settlement as USSD debts from banks rise to $200bn" class="wp-image-147303">
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 Mr Gbenga Adebayo
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Reacting to the repayment development on Thursday, ALTON Chairman, Gbenga Adebayo expressed that although some repayments have been recorded but still fall below expectations.&nbsp; 
“We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming. We are now waiting for intervention from regulators, including the Central Bank of Nigeria and the Nigerian Communications Commission, to resolve the issue,” he said. 
He stressed that telecom operators could be forced to cut off USSD for banks if the debt is not resolved. Adebayo added that CBN and NCC intervention are needed to safeguard the collaboration between the two sectors. 
“The financial and digital economy depends on this service. It’s critical for regulators to step in swiftly to ensure resolution,” he said. 
<h4 id="telecoms-might-suspend-ussd-services-to-banks" class="wp-block-heading">Telecoms might suspend USSD services to banks.</h4> 
Mobile operators have raised concerns over the effect of the unpaid debt. The USSD service allows bank customers to perform digital financial transactions without an internet connection. Telecom operators have since threatened to shut down USSD services due to incurring losses. The moves were halted following interventions by government authorities. 
Last month, MTN Nigeria CEO, Karl Toriola said the telecommunications sector has incurred huge losses that require significant intervention. He added that MTN, the largest telecommunications company in the country with about 78 million subscribers, recorded a loss of N519.1bn for the first half of 2024. 
While calling for immediate intervention, he pointed out that the company is now surviving on the reserves it has accumulated in two decades. “We must return the industry to profitability,” he stated, emphasizing the urgent need for reformation. 
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 <img loading="lazy" decoding="async" width="720" height="405" src="https://technext24.com/wp-content/uploads/2024/10/images-7-1.jpeg" alt="Karl Toriola, Chief Executive Officer of MTN" class="wp-image-237983">
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 Karl Toriola, Chief Executive Officer of MTN
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“The debt has become unsustainable for telecom operators. While we remain hopeful that the intervention of the CBN Governor, Olayemi Cardoso, and the NCC’s Executive Vice Chairman, Aminu Maida, will yield results, operators may be compelled to discontinue these services if no progress is made,” Toriola said. 
Telcos said the situation has placed significant pressure on the industry. Stakeholders have been calling for swift action to avoid potential disruptions to USSD services, which millions of Nigerians (with or without an internet connection) rely on for daily financial transactions. 
He also noted that MTN, which is a top taxpayer in the country, has seen its tax contributions decline following several financial crises. 
Following their first-half results, MTN and <a target="_blank" href="http://airtel.in" rel="noreferrer noopener">Airtel</a> have adopted a cautious capital expenditure model for 2024. This also includes the push for tariff hikes However, the two other mobile operators in the country, <a target="_blank" href="http://9mobile.com.ng" rel="noreferrer noopener">9mobile</a>, and <a target="_blank" href="http://gloworld.com" rel="noreferrer noopener">Globacom</a>, are not publicly listed. 
Moreover, there has been a long-standing dispute between the parties over charges for USSD services. The dispute began in 2019 when telecom operators proposed a charge of N4.50 per 20 seconds for USSD services, which banks opposed, arguing the fees would lead to an increase in costs. 
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 <img loading="lazy" decoding="async" width="750" height="354" src="https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos.jpg" alt="Nigeria has lost 11.5m mobile subscribers in 1 year as telecoms contribution to GDP drops" class="wp-image-50111" style="width: 100%;height:auto" srcset="https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos.jpg 750w, https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos-300x142.jpg 300w, https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos-640x302.jpg 640w, https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos-380x179.jpg 380w, https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos-550x260.jpg 550w, https://technext24.com/wp-content/uploads/2020/02/Report-65-of-Nigerian-Internet-Users-Now-Watch-Online-Videos-600x283.jpg 600w" sizes="(max-width: 750px) 100vw, 750px">
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In 2021, telecom operators introduced a N6.98 per transaction in 2021 after regulatory approval. Following an accumulated debt of N42bn, there were calls from mobile operators to shut down USSD services. The intervention of the former Minister of Communications and Digital Economy, Isa Pantami, averted the suspension and led to the revised N6.98 fee. 
Since then, the debt has continued to grow. ALTON has pointed out that without adequate intervention, telecom operators may be forced to withdraw USSD services from banks. 
When asked about the timeline for the withdrawal of service to commence, Adebayo responded, “There is no timeline yet; we are still waiting on the regulators.” 
Also Read: <a target="_blank" href="https://technext24.com/2024/10/22/mtn-ceo-raises-alarm-say-might-shut-down/" rel="noreferrer noopener">“If tariff doesn’t go up, we will shut down”- MTN CEO raises alarm</a>.

N250bn USSD debt repayment: smaller banks complying, big banks aloof

Technext.ng

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