USSD debt: CBN, NCC Order Banks To Pay N212.5b to Telcos by Year End

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have ordered banks to pay N212.5 billion—85per cent of a N250 billion debt owed to telecom operators for USSD charges—by December 31, 2024, to a December 20 memo.

USSD stands for Unstructured Supplementary Service Data, a communication protocol that allows a phone to connect to a software application in real-time. It’s a GSM service that’s available on most mobile phones with short message service (SMS) capability.

The memo detailing repayment plans comes after years of delays and disputes over USSD payments, which have led to the growing debt.

Despite regulatory interventions requiring banks to collect and remit the USSD fees since 2021, many banks have resisted. They argue that the charges are unfair and that USSD technology is outdated.

Specifically, former CBN governor, Godwin Emefiele described the cost incurred by telcos in putting the requisite infrastructure o which the transactions ride as “sunk cost”.

CEO of GTCO, Segun Agbaje, said all that was needed to be done was get the price of data reduced, arguing that USSD technology had become otiose.

Agbaje had said: “If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.”

Similar concerns were raised by the late Group Executive of Access Bank, Herbert Wigwe, who questioned how telcos determine the fees. He argued that USSD is an outdated technology that will soon become obsolete.

These sentiments, widely shared among bank execs, have contributed to the growth of the USSD debt despite previous regulatory efforts. As of November 2024, telecom operators claim banks owe N250 billion for USSD services.

MTN Nigeria CEO, Karl Toriola, said the telcos would have no option but to seek the approval of the NCC to disconnect the banks from the platform.

Chairman, Association of Licensed Telecom Companies of Nigeria (ALTON), Gbenga Adebayo, said the huge debt has a significant impact on the finances of the carriers. While he said not all the banks CEO’s were recalcitrant, adding that smaller banks were paying indicating that the big lenders such as GTBank, Access Bank and others were deliberately refusing to pay the USSD debt.

According to techcabal, the December 20 directive seeks to expedite debt settlement and enforce strict payment timelines. Under the new rules, banks must pay 85per cent of new invoices within one month of receipt. Additionally, by January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60 per cent of all outstanding invoices before using any telco’s USSD platform.

Failure to comply with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.

There are also incentives for banks to pay on time. If banks meet specified payment milestones, the NCC will begin the transition to End-user Billing (EUB), where customers—rather than the banks—would directly pay for USSD services. EUB is considered the long-term solution to the payment dispute but will only be available to compliant parties.

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have ordered banks to pay N212.5 billion—85per cent of a N250 billion debt owed to telecom operators for USSD charges—by December 31, 2024, to a December 20 memo.

USSD stands for Unstructured Supplementary Service Data, a communication protocol that allows a phone to connect to a software application in real-time. It’s a GSM service that’s available on most mobile phones with short message service (SMS) capability.

The memo detailing repayment plans comes after years of delays and disputes over USSD payments, which have led to the growing debt.

Despite regulatory interventions requiring banks to collect and remit the USSD fees since 2021, many banks have resisted. They argue that the charges are unfair and that USSD technology is outdated.

Specifically, former CBN governor, Godwin Emefiele described the cost incurred by telcos in putting the requisite infrastructure o which the transactions ride as “sunk cost”.

CEO of GTCO, Segun Agbaje, said all that was needed to be done was get the price of data reduced, arguing that USSD technology had become otiose.

Agbaje had said: “If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.”

Similar concerns were raised by the late Group Executive of Access Bank, Herbert Wigwe, who questioned how telcos determine the fees. He argued that USSD is an outdated technology that will soon become obsolete.

These sentiments, widely shared among bank execs, have contributed to the growth of the USSD debt despite previous regulatory efforts. As of November 2024, telecom operators claim banks owe N250 billion for USSD services.

MTN Nigeria CEO, Karl Toriola, said the telcos would have no option but to seek the approval of the NCC to disconnect the banks from the platform.

Chairman, Association of Licensed Telecom Companies of Nigeria (ALTON), Gbenga Adebayo, said the huge debt has a significant impact on the finances of the carriers. While he said not all the banks CEO’s were recalcitrant, adding that smaller banks were paying indicating that the big lenders such as GTBank, Access Bank and others were deliberately refusing to pay the USSD debt.

According to techcabal, the December 20 directive seeks to expedite debt settlement and enforce strict payment timelines. Under the new rules, banks must pay 85per cent of new invoices within one month of receipt. Additionally, by January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60 per cent of all outstanding invoices before using any telco’s USSD platform.

Failure to comply with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.

There are also incentives for banks to pay on time. If banks meet specified payment milestones, the NCC will begin the transition to End-user Billing (EUB), where customers—rather than the banks—would directly pay for USSD services. EUB is considered the long-term solution to the payment dispute but will only be available to compliant parties.

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have ordered banks to pay N212.5 billion—85per cent of a N250 billion debt owed to telecom operators for USSD charges—by December 31, 2024, to a December 20 memo.

USSD stands for Unstructured Supplementary Service Data, a communication protocol that allows a phone to connect to a software application in real-time. It’s a GSM service that’s available on most mobile phones with short message service (SMS) capability.

The memo detailing repayment plans comes after years of delays and disputes over USSD payments, which have led to the growing debt.

Despite regulatory interventions requiring banks to collect and remit the USSD fees since 2021, many banks have resisted. They argue that the charges are unfair and that USSD technology is outdated.

Specifically, former CBN governor, Godwin Emefiele described the cost incurred by telcos in putting the requisite infrastructure o which the transactions ride as “sunk cost”.

CEO of GTCO, Segun Agbaje, said all that was needed to be done was get the price of data reduced, arguing that USSD technology had become otiose.

Agbaje had said: “If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.”

Similar concerns were raised by the late Group Executive of Access Bank, Herbert Wigwe, who questioned how telcos determine the fees. He argued that USSD is an outdated technology that will soon become obsolete.

These sentiments, widely shared among bank execs, have contributed to the growth of the USSD debt despite previous regulatory efforts. As of November 2024, telecom operators claim banks owe N250 billion for USSD services.

MTN Nigeria CEO, Karl Toriola, said the telcos would have no option but to seek the approval of the NCC to disconnect the banks from the platform.

Chairman, Association of Licensed Telecom Companies of Nigeria (ALTON), Gbenga Adebayo, said the huge debt has a significant impact on the finances of the carriers. While he said not all the banks CEO’s were recalcitrant, adding that smaller banks were paying indicating that the big lenders such as GTBank, Access Bank and others were deliberately refusing to pay the USSD debt.

According to techcabal, the December 20 directive seeks to expedite debt settlement and enforce strict payment timelines. Under the new rules, banks must pay 85per cent of new invoices within one month of receipt. Additionally, by January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60 per cent of all outstanding invoices before using any telco’s USSD platform.

Failure to comply with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.

There are also incentives for banks to pay on time. If banks meet specified payment milestones, the NCC will begin the transition to End-user Billing (EUB), where customers—rather than the banks—would directly pay for USSD services. EUB is considered the long-term solution to the payment dispute but will only be available to compliant parties.

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have ordered banks to pay N212.5 billion—85per cent of a N250 billion debt owed to telecom operators for USSD charges—by December 31, 2024, to a December 20 memo.

USSD stands for Unstructured Supplementary Service Data, a communication protocol that allows a phone to connect to a software application in real-time. It’s a GSM service that’s available on most mobile phones with short message service (SMS) capability.

The memo detailing repayment plans comes after years of delays and disputes over USSD payments, which have led to the growing debt.

Despite regulatory interventions requiring banks to collect and remit the USSD fees since 2021, many banks have resisted. They argue that the charges are unfair and that USSD technology is outdated.

Specifically, former CBN governor, Godwin Emefiele described the cost incurred by telcos in putting the requisite infrastructure o which the transactions ride as “sunk cost”.

CEO of GTCO, Segun Agbaje, said all that was needed to be done was get the price of data reduced, arguing that USSD technology had become otiose.

Agbaje had said: “If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.”

Similar concerns were raised by the late Group Executive of Access Bank, Herbert Wigwe, who questioned how telcos determine the fees. He argued that USSD is an outdated technology that will soon become obsolete.

These sentiments, widely shared among bank execs, have contributed to the growth of the USSD debt despite previous regulatory efforts. As of November 2024, telecom operators claim banks owe N250 billion for USSD services.

MTN Nigeria CEO, Karl Toriola, said the telcos would have no option but to seek the approval of the NCC to disconnect the banks from the platform.

Chairman, Association of Licensed Telecom Companies of Nigeria (ALTON), Gbenga Adebayo, said the huge debt has a significant impact on the finances of the carriers. While he said not all the banks CEO’s were recalcitrant, adding that smaller banks were paying indicating that the big lenders such as GTBank, Access Bank and others were deliberately refusing to pay the USSD debt.

According to techcabal, the December 20 directive seeks to expedite debt settlement and enforce strict payment timelines. Under the new rules, banks must pay 85per cent of new invoices within one month of receipt. Additionally, by January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60 per cent of all outstanding invoices before using any telco’s USSD platform.

Failure to comply with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.

There are also incentives for banks to pay on time. If banks meet specified payment milestones, the NCC will begin the transition to End-user Billing (EUB), where customers—rather than the banks—would directly pay for USSD services. EUB is considered the long-term solution to the payment dispute but will only be available to compliant parties.