Mobile Operators, Banks to Negotiate Rates for USSD Services

August 6, 2020
USSD War

By Adedapo Adesanya

The Nigerian Communications Commission (NCC) has initiated fresh engagement between some telecommunication companies and banks regarding Unstructured Supplementary Service Data (USSD) pricing and billing structure.

Both parties have always engaged in a fisticuff over the services especially in terms of charges.

The NCC in a statement said it has revised its determination on the pricing of USSD services which, accordingly, has been brought to the knowledge of the parties involved, adding that it was embarking on this peace accord to protect the interests of consumers and support a robust telecommunications sector.

The commission explained in a statement signed by its director of public affairs, Mr Ikechukwu Adinde, who disclosed that this was necessitated following a prolonged dispute between Mobile Network Operators (MNOs) and financial institutions on the applicable charges for USSD services and the method of billing.

The telcos had earlier accused banks who ride on their services to offer USSD banking services to telecoms consumer of not remitting the service charge deducted by the banks from the account of telecoms consumers

The operators then initiated a plan to start deducting the charges directly from customers’ accounts; a move that led to frictions between the parties and was also resisted by the consumers, the NCC and the Central Bank of Nigeria (CBN).

“As a responsive and effective regulatory authority, the commission recognises that its policies are not static and may be modified from time to time as circumstances demand.

“This is coming on the heels of a recent directive by Isa Pantami, minister of communications and digital economy, regarding a review of the USSD pricing by all parties involved, following a presentation made by the NCC on the billing structure, determination of USSD pricing, current status and the way forward.

Quoting Mr Pantami, it was stated that he took the decision to suspend the commencement of end-user billing where the consumers are charged directly from their airtime balance for use of USSD channels as opposed to corporate billing where the banks paid the MNOs for the use of USSD service.

The minister said he was “genuinely besieged with a barrage of complaints at the attempted commencement of end-user billing by service providers.”

He further clarified that “USSD is a service to banks and not to the telecom consumers, and as such, banks should see themselves as corporate customers of telecom operators with a duty to pay for using the telecom network and infrastructure, including USSD channels extended to them for service delivery to their customers.”

According to him, “Mobile MNOs have no direct relationship to bank customers, and cannot, therefore, charge directly for the usage of USSD channel.”

The USSD channel has evolved over time from an exclusive channel used for only telco services such as balance inquiry and recharges to a channel for the deployment of a broad spectrum of services.

These new applications of the service include financial, insurance, agricultural, government services and more, which have been augmented with the heavy reliance on digital services with the disruptions of the ongoing coronavirus pandemic.

According to Mr Umar Danbatta, the executive vice-chairman of the NCC, the agency has revised the determination previously issued by removing the price floor and the cap to allow the MNOs and the banks negotiate rates that will be mutually beneficial to all parties concerned.

The NCC also determined that MNOs must not charge the consumers directly for the use of USSD channels for financial services in the form of end-user-billing.

The transaction should be between the MNOs and the entity to which the service is provided which are the banks and financial institutions.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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