Telcos’ Threat To Shut Down USSD, Other Services Raises Concern

…MTN Nigeria, Others Appeal For Fair, Competitive Environment

…Challenged By Rising Operational Costs, Stable Service Charge

LAGOS – As the impasse between telecom operators and deposit money banks (DMO) in the country continues unresolved over the payment of unstructured sup­plementary service data (USSD) debt owed telecom companies, stakeholders in the two indus­tries have advocated a mutual settlement of the lingering rift to avert the planned stoppage of services by the telcos.

Early this week, telecom operators under the aegis of the Association of Licensed Telecom Operators of Nigeria (ALTON) threatened to with­draw the USSD that they offer to banks following an accumu­lated debt amounting to over N250 billion owed the operators by the banks.

If they make good their threat to disrupt the USSD service, bank customers would not be able to carry out financial trans­actions on their mobile phones, while using the USSD codes which are operated without the use of data and mobile apps.

Speaking on how the USSD service withdrawal plan can be averted, Engr Gbenga Adebayo, Chairman of ALTON, said that although there had been talks on the issue, no considerable action was taken on the part of the banks.

Adebayo said the debt must be paid in total, stressing that “telcos would not hesitate to block debtor banks from access­ing the service anytime soon”.

“In spite of all appeals, meet­ings and interventions by the ministry of communications, innovation and digital economy, Central Bank of Nigeria (CBN), and NCC, mainly during the last administration, the banks have kept mute over payment,” he said.

“If operators had to shut down their services, bank customers would no longer be able to carry out transactions such as fund transfers through shortcodes, check bank details and account balances, among others, through their mobile phones.”

Adebayo said the matter needed to be resolved as fast as possible to avoid the collapse of the sector, adding that the debt was not allowing operators to further expand services.

Ejike Onyeaso, Director at Adaba Consult, a telecommuni­cations consultancy firm, said the core of the issue lies in the leased lines granted to banks and their usage.

He said that while telecom service providers have been of­fering these lines, the banks have not compensated them adequate­ly for the services rendered.

“The staggering amount in­volved necessitate the sustain­ability of the telecommunica­tions industry,” he said.

He added: “At the same time, it’s vital for the banking sector to avoid any form of collapse. If telecommunications operators follow through on their threats, certain banking services would be impacted during any suspen­sion.”

Also expressing his displea­sure over the challenges being faced by telecom operators, Karl Toriola, CEO of MTN, said that price increments have become a necessity, emphasising that the telecom sector has been strug­gling with rising costs in all ar­eas, including the price of capital and the increasing expenses for maintaining infrastructure such as base stations and diesel gen­erators.

Despite the economic chal­lenges confronting the industry, the USSD debt has escalated significantly, with Toriola urg­ing the Central Bank of Nigeria (CBN) and the Nigerian Commu­nications Commission (NCC) to mediate for a resolution.

He expressed confidence that the newly appointed Central Bank of Nigeria governor, Yemi Cardoso, alongside the Executive Vice Chairman of the Nigerian Communications Commission, Dr Aminu Maida, would soon find a resolution to the ongoing dispute.

While the USSD debt banks owing the telecom operators may be the major issue of conflict, there has also been a push by the telcos for upward review of call, text and data tariffs which the relevant regulatory agency, NCC has not given a nod to.

The National Association of Telecommunications Subscrib­ers (NATCOMS) president, Deo­lu Ogunbanjo, urged the NCC to consider the 10 per cent tariff increase being proposed by the telcos to moderate the rising operational costs in the nation’s telecommunications sector.

Ogunbanjo said tariff hike is necessary for telecom companies to sustain their operations and improve service quality.

He stated that the current eco­nomic conditions are negative­ly impacting telecom operators’ business, making it crucial for the regulatory agency to find a balanced solution.

According to him, “When you now look at the quality of service the telecom companies are rendering to this day, it is very poor, and they are also complaining.

“Do not forget that they said their operations were getting burdensome because of the ris­ing costs of things, such as pet­rol, diesel and some other things, that will make the network func­tion appropriately.

“They are complaining. I think in the last 11 years, they have not increased their service charge, operational costs have increased but not physically like we see in petrol.”

Recently, MTN Nigeria and other multinational business leaders have urged the Federal Government to establish a fair, competitive environment that would allow businesses to main­tain their investments within the nation.

The business operators lament that the government has not allowed them to increase their prices in the last ten years, stating that such a policy must be reviewed if they must stay in business.

Speaking on the need for tar­iff review, Modupe Kadri, the Chief Financial Officer of MTN, explained that the prevailing high inflation rates and fluctu­ations in foreign exchange have hindered the telecommunica­tions sector’s ability to function efficiently.

Kadri emphasised that the current economic conditions have led to increased tariffs in the petroleum and electricity sectors, questioning why simi­lar adjustments have not been authorised for the telecommu­nications sector.

He underscored that telecom operators have not been granted regulatory permission to modify their pricing for over ten years despite the fact that they import telecommunications equipment at foreign currency rates.

Kadri said: “For ten years now, telecommunication com­panies haven’t been permitted to increase prices, and this reg­ulation is not providing us with a level playing field to operate. If we are to stay in business, this policy must be reviewed, similar to how electricity and fuel pric­es are adjusted to reflect current economic realities.

“Our business is mainly de­pendent on foreign exchange, so customers need to understand that for them to receive the ser­vices they desire, it costs money.

“When people have to invest in the country and are unable to monetise their investments, it cannot work.

“The only way this economy will thrive is if there is appropri­ate pricing such that investments in the sector are guaranteed. The government is talking about di­versifying; I’m talking about survival. What is the business case for me to invest when I’m bleeding almost to death?

“The telecommunications in­dustry contributes 16 per cent to the GDP, and it is not something that you can mess around with.

He stated that for the govern­ment to encourage the survival of businesses, there had to be a level playing field.

“If we are not careful, what happened to the oil industry, which led to a loss of invest­ments, will happen to telecom­munications, and the industry will come to a halt. It’s not rocket science.”

While some stakeholders are in support of a hike in telecom tariffs, the Association of Tele­phone Cable TV and Internet Subscribers of Nigeria (ATCIS) went against the 10 per cent in­crease by telecoms operators, maintaining that it will add to the economic burden for the subscribers.

The national president of ATCIS, Sina Bilesanmi, said the proposed tariff increase should be suspended, while urging the telecom operators to improve the quality of their services.

Bilesanmi said the subscrib­ers were not enjoying the ser­vices of many operators even before the economic hardship set in.

“The proposed 10 per cent increase is not welcome now. If they want to increase their tar­iffs, they should first give us qual­ity services, we cannot continue paying for the services we don’t enjoy. We can’t continue wasting our hard earned money on low quality services.”