Financial Transactions On Phones May End Soon, As Telcos Threaten Banks With USSD Shut Down

Thursday, November 28, 2019

Financial Transactions On Phones May End Soon, As Telcos Threaten Banks With USSD Shut Down

Financial Transactions On Phones May End Soon, As Telcos Threaten Banks With USSD Shut Down

L-R: Gbolahan Awonuga, Executive Secretary; Gbenga Adebayo, Chairman; and Aremu Olajide, all of ALTON at the press conference

By Rommy IMAH

 

Telecommunications operators in Nigeria have threatened to shut down Unstructured Supplementary Service Data (USSD) services they provide banks, reiterating that they cannot provide such services free while the banks make huge money from their customers.

 

At a press briefing in Lagos on Wednesday, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo noted that the decision has become necessary following the inability of the Minister of Communications & Digital Economy, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) to resolve the impasse.

 

Unstructured Supplementary Service Data (USSD), sometimes referred to as "Quick Codes" or "Feature codes", is a communications protocol used by GSM cellular telephones to communicate with the mobile network operator’s computers.

 

USSD can be used for WAP browsing, prepaid callback service, mobile-money services, location-based content services, menu-based information services, and as part of configuring the phone on the network.

 

But at the press conference, ALTON insisted it was taking this latest position because of the inability of the Minister of Communications & Digital Economy to set up a working group to look into issues around the recent charges introduced by its members after directing them to suspend such charges.

 

“We cannot continue to bear the costs while banks get the service free and charge customers for it. USSD service comes at a cost to the operators, it is not a sunk cost as they are insinuating; it is a recurring cost.

 

“This is no longer a matter of ministerial directive, we are calculating the costs and very soon, we will come out with what we have incurred and present it to the banks, if they say they are not going to pay, we will also have to withdraw our services and disconnect the links.

 

“This means that Nigerians will no longer be able to carry out financial transactions on their phones. We will not offer USSD link free of charge to the banks because they charge their customers for it,” he said.

 

Adebayo stated that already, the USSD debt, which is now accumulating, would be treated as interconnect debt and warned that the banks would have to pay for it fully or be disconnected.

 

Recall that telecom operators recently announced plans to start charging mobile users for every session of USSD, aside charges by banks, an announcement that sparked widespread outrage, prompting the Minister of Communications and Digital Economy, Dr. Isa Pantami, to order its suspension.

 

On the 20th Anniversary celebration of the Association, the ALTON Chairman disclosed that since inception, ALTON has continued to play a key role in market development of the telecommunications industry.

 

Its intervention on behalf of members on several issues such as challenges of multiple taxation, multiple regulations, rates and tariff determination, market competition, unfavorable government policies, Telecommunications as Critical National Infrastructure has been of immense benefit to the Nigerian telecommunications industry at large.

 

He said that prior to the liberalization and deregulation of the telecom sector some 20 years ago, the industry was marred by the absence of policy document articulating sector growth path & development objectives; Ineffectual regulatory framework establishing sector regulator;  Costly access charges, yet unsatisfactory levels of service provision; and Limited opportunity for private sector participation.

 

Others are the wide gulf between service demand and service supply; absence of competition/ total dominance by State-owned monopoly entity; and waiting time for telephone then was 24-48 months.

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