Banking operations may be disrupted as telcos vow not to offer free USSD service

There may be major distruptions in banking activities in the country as telecommunication companies have vowed not to offer free USSD service for banking activities.

This is coming on the heels of directives by the Minister for Communication and Digital Economy, Isa Patani, to telcos to stop charging the N4 for every 20 seconds during a banking USSD usage.

The umbrella body of the companies, Association of Licensed Telecommunications Operators of Nigeria (ALTON), made the threat on Wednesday, accusing the banks and the authorities of insincerity on the issue.

USSD is a Global System for Mobile(GSM) communication technology that is used to send text between a mobile phone and an application program in the network.

Addressing a world press conference on Wednesday, ALTON’s chairman, Gbenga Adedayo, wondered why stakeholders, including the Central Bank of Nigeria (CBN), Nigeria Communications Commission (NCC) and Body of Bank Chief Executive Officers (CEOs), have kept silent.

The group also condemned the role played by minister for Communications and Digital Economy, Pantani, who issued a ‘directive’ to stop them from charging for the services they offer to the financial institutions.

Adebayo also said it was wrong to describe the cost of providing the service as ‘sunk’, wondering how the cost of building a house could be described as sunk.

Adebayo also argued that the companies invested huge cash to put the infrastructure in place, adding that they have been spending money to keep the base transceiver stations (BTS) running, in addition to other costs.

He said the operators will soon apply the relevant sections of the Nigerian Communications Act to stop providing links to the banks.

Read also: 2020 BUDGET: CBN sends early warning signals, identifies non-feasibility of $57 benchmark

The carriers insisted that stakeholders are yet to meet to discuss the way forward, “but the banks have continued to charge as much as N55 per transaction, using the same telecoms operators platform.”

Adebayo said: “I am saying it again that the USSD links will not be offered free of charge. The records are there. We are tracking how much the banks are charging and making on the USSD. When the time comes, and we agree on way forward, we will show them what they have been charging. For the telcos, it cost them so much to provide the service.

“What should have happened is that when we first raised this issue, we made public statement and expected that a stakeholders meeting should have been called to discuss the matter.

“The CBN governor spoke, Minister of Communications and Digital Economy spoke, the NCC withdrew; and since then, nobody has said anything. We expected that a meeting of minds, where all parties (telcos and the banks) would come and talk on the matter to a find a lasting solution, but nothing of such. I am saying it again; we cannot bury this matter under the table and wish it goes away, it won’t go away. The fact is those links won’t be provided at no cost.

“When the time comes, we shall treat it as interconnect debt. We shall invoke the right of the provider of service under the Act of the NCC. So, if the banks will continue to enjoy the service and they won’t pay, telcos will make a case to the NCC for proper disconnect.”

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now