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USSD disagreement with banks, N40.3bn debts affect MTN Q1 revenue



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The disagreement between MTN Nigeria and deposit money banks over Unstructured Supplementary Service Data (USSD) payment affected the earnings of the telecommunications company.

Ripples Nigeria gathered that USSD earnings was excluded from other service revenue for enterprise. This made the segment revenue largely flat year-on-year – Q1 2020 and Q1 2021.

In a statement by MTN explaining its financials, USSD was not recognised in the first quarter, a period the network provider and commercial banks had a confrontation over USSD commission.

It had earlier been reported that MTN reduced the commission of Nigerian banks on USSD, this made the banks suspend subscribers of the y’ello network from accessing their digital channels, including USSD codes.

MTN agreed to revert to old commission in order to make banks grant subscribers access. Aside from the commission issue, banks are also said to be owing MTN N40.3 billion as at Q1 2021.

READ ALSO: Mobile network operators demand payment of USSD charges by banks

In the statements, “The enterprise business continued its recovery from the impacts of the COVID-19 lockdown as economic activity improved. However, service revenue for enterprise was largely flat YoY, mainly due to the non-recognition of USSD revenue in Q1.

“Normalised growth (excluding USSD revenue) was 2.6%. We continue to engage with the NCC, Central Bank of Nigeria (CBN) and deposit money banks (DMBs) to conclude the operational modalities for the new pricing framework that has been agreed upon for USSD services.

“The mechanism for and timing of the recovery of the industry wide outstanding debts that exist for USSD services provided to the DMBs form part of this process. As at the end of Q1, N40.3 billion was due to MTN Nigeria. In the meantime, we continue to account for USSD revenue on a cash basis.”

At the end of Q1 this year, the other service revenue was supported by earnings from SMS, Information and Communications Technology (ICT) & infrastructure and devices to hit N16.76 billion in Q1 2021, against N14.86 billion.

By Fakoyejo Ayodeji…

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