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ALTON Threatens Showdown With Banks Over USSD Agreement

…May Shut down Service To Banks

With the imbroglio between telecommunication service providers and banks over the Unstructured Supplementary Service Data (USSD) or short code service yet to be resolved, the Association of Licenced Telecommunications Operators of Nigeria (ALTON) has warned that its members will not continue to offer its link free of charge to the banks.

Speaking at a media conference in Lagos, the Chairman of ALTON, Engr. Gbenga Adebayo noted that since none of the regulators, including the Nigerian Communications Commission (NCC), the Central Bank of Nigeria (CBN) and the Ministry of Communications and Digital Economy, have called a stakeholders meeting to address the conflict, telecom service providers, on whose link banks ride to offer USSD services, may have to pull the plug on the service.

ALTON is the umbrella association that represents telecom operators operating in Nigeria.

It will be recalled that after an earlier agreement between banks and telecom operators on modalities for the provision of the USSD platform and the sharing formula, the banks reneged on the contract and stopped the payment of the statutory amount to the operators. The operators had earlier requested an upward review of the payment from N2 to N4 for every customer charged for USSD usage. USSD charges to bank customers range between N30 to N50 per transaction. Whereas the CBN expects that telecom operators cover their cost by billing subscribers, ALTON says this will amount to double charge on the subscriber who is already paying for the same service to his bank.

In an unprecedented move, the Minister for Communications and Digital Economy, Dr. Isa Ali Ibrahim Pantami recently ordered that telecommunication service providers shelve plans of charging subscribers a proposed N4 USSD charge above the bank charge, a move ALTON faulted as it places its members in a losing position.

ALTON believed that the Minister should have intervened by calling a multi-stakeholder meeting to resolve the issue between the banks and telecom operators.

Engr. Adebayo warned that if the issue is not resolved immediately, the operators will have no choice but to disconnect the link they offered the banks, as they are not ready to pay for it.

He argued that the CBN Governor’s speech calling the service a sunk-cost was a slap on the operators who spend money to maintain the link they graciously gave to the banks.

A statement credited to the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele in explanation to the charge states: “I held a meeting with some telecom companies as well as the leading banks in Nigeria at Central Bank, Lagos. At that time, we came to the conclusion that the use of USSD is a sunk cost. What we mean by a sunk cost is that it not an additional cost on the infrastructure of the telecom company. But the telecom companies disagreed with us. They said it was an additional investment in infrastructure and for that reason, they needed to impose it. I have told the banks that we will not allow this to happen. The banks are the people who give this business to the telecom companies and I leave the banks and the telecom companies to engage.”

Engr. Adebayo maintains: “We are tracking what the banks are charging and what they are making from this link. There will be no discount on this, we will not offer the USSD links free of charge; the banks are collecting money from their customers.”

Severance of the link will result in banks not being able to use USSD or short codes to transact business with their customers. Services that require the use of short codes will be terminated.

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