Prof. Umar Danbatta, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), has stated that the N120 billion debt owing by banks for the Unstructured Supplementary Service Data (USSD) provided by telecom operators has finally been settled.
With this, he disclosed that the banks have decided to clear the accrued debt and continue to pay for the USSD service under the corporate billing term following the involvement of the Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi.
Danbatta made the announcement on Thursday at the Telecom Executives and Regulators Forum (TERF) in Lagos.
The issue was resolved during a recent meeting between the acting CBN Governor, the NCC, telecom providers, and banks, according to the EVC.
He explained that the decision was founded on the realisation that financial inclusion cannot be achieved without telecom services.
Danbatta shared more insight by stating that the banks' insistence on end-user billing rather than corporate billing caused the debt to accumulate.
“The USSD service is being provided to the banks, who in turn provide the service to their customers. The question was who should be paying for the service.
“They wanted end-user billing, but we said the service is being provided to the banks, not to their customers.
“The banks charge their customers for the service, and they are to pay the telcos in the form of corporate billing, which is neat.
“Then along the way, there was a misunderstanding and the debt kept piling until it reached a humongous amount of over N100 billion.
"Even at that, the service was still being provided to customers by the banks using the telecom infrastructure and the telcos were being paid nothing. This was despite the intervention of the immediate past Minister,” Danbatta explained.
The EVC reported that the head of the central bank acknowledged that without the USSD service, there would be no digital financial inclusion and the penetration of inclusion would be far less than it is now, despite the fact that the situation had remained unchanged until recently when the Acting CBN Governor intervened.
“Digital financial inclusion index or penetration is currently about 70% because it is telco driven. And as such, there shouldn’t be any problem paying for the service.
"No service is free. Pay the telcos, that’s all we ask. Okay, and as we’re saying, Now, pay them for the debt, the accumulated debt, and then pay them for the service they are rendering as we speak.
“At a meeting between the acting CBN governor, the NCC, the telcos and the banks, it was acknowledged that the debt exists, that going forward, the service has to be paid for by the banks through corporate billing.
"It is an important development for the telecoms industry that we have found an amicable resolution to the problem because we’re all serving the same government. We do not want to disrupt financial services in the country.
“We want to see the financial inclusion penetration to even go higher. We want it to be ubiquitous, but we cannot do this without settling the legacy debt, as well as paying for the service that is being provided,” he said.
The telecom companies have threatened to cut off the banks' access to the USSD service under the auspices of the Association of Licenced Telecommunications Operators of Nigeria (ALTON).
After numerous of Isa Pantami, the former Minister of Communications and the Digital Economy, interventions had failed, this was done.