Telecommunications companies in Nigeria are preparing to suspend their Unstructured Supplementary Service Data (USSD) services in just two weeks, following the failure of deposit money banks (DMBs) to honor a massive N250 billion debt. The suspension, which is scheduled for January 28, 2025, will significantly affect millions of Nigerians who rely on USSD services for banking transactions, mobile top-ups, and other essential services.
The decision follows a longstanding dispute between telecom operators and the banking sector over unpaid debts that stem from fees associated with mobile money transactions. According to sources within the telecommunications industry, the suspension could lead to major disruptions unless the banks settle their outstanding payments in the coming days.
An Ongoing Debt Crisis
The debt crisis has been brewing for months. In December 2024, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) issued a joint directive to the country’s banks, demanding that they make a partial payment of the debt by December 31. However, by mid-January, only four out of the 22 banks involved had made any substantial payments. Eighteen banks have failed to comply, leaving the telecoms operators with no choice but to proceed with the suspension.
A top-level source within the telecom industry explained the situation, saying, “The banks have had ample time to settle the debt, but they have not met their obligations. If this continues, we will have no choice but to suspend USSD services, which will impact millions of Nigerians who depend on these services daily.”
NCC Approval and Potential Revocation
As tensions rise, the Nigerian Communications Commission (NCC), which oversees the operations of telecom companies, has given the green light for the suspension. “The NCC has approved the suspension if the banks fail to comply with the directive. This is not a decision we take lightly, but the telecom companies have been left with no choice,” a senior official at the NCC disclosed on condition of anonymity.
Sources close to the matter emphasized that the telecom operators have already begun notifying their subscribers about the possible disruption in service. In some areas, messages about the upcoming suspension are being sent out, warning customers to make alternative arrangements for financial transactions that rely on USSD codes.
The Impact on Nigerian Subscribers
The impending suspension of USSD services will have a far-reaching impact on both urban and rural Nigerians who use mobile phones for banking services. Many Nigerians rely on USSD codes to check their bank balances, transfer money, pay bills, and access other banking services without needing internet access.
For people in rural areas, where internet connectivity is often limited, USSD services are a lifeline for basic banking. The suspension threatens to cripple the financial inclusion efforts that have been championed by the Central Bank of Nigeria (CBN), which has actively promoted mobile banking as a means to bring more Nigerians into the formal financial sector.
A Lagos-based mobile phone user, Ngozi Eze, expressed her frustration: “I use USSD every day to check my account balance and send money to family members. If this suspension happens, I don’t know how I’ll cope. Many of us don’t have access to smartphones or reliable internet, so USSD is our only option.”
The Bigger Picture: Bank-Telco Tensions
The conflict between banks and telecom companies over USSD fees has been simmering for several years. Telecom operators argue that they have been unfairly burdened with fees by the banks, which they believe are disproportionate to the services provided. Meanwhile, banks contend that the telecoms are not transparent in their billing practices, creating a standoff that has yet to be resolved.
This issue has been exacerbated by the broader financial challenges faced by Nigerian banks, many of which are struggling with liquidity issues and a difficult economic climate. Despite this, telecom companies insist that they cannot continue to operate under the current financial arrangement.
A telecom industry insider who spoke on the condition of anonymity stated, “We have been patient and understanding, but this has gone on for too long. The banks had more than enough time to make the necessary payments. If they don’t pay their dues, they will have to face the consequences, which is the suspension of USSD services.”
Government’s Role and Possible Solutions
The Nigerian government has been drawn into the dispute, with both the CBN and NCC stepping in to mediate between the telecoms and the banks. However, as the deadline looms, the prospects of a resolution seem uncertain. With less than two weeks to go, there are growing concerns that the government may not be able to intervene in time to prevent the suspension.
In an effort to avoid this outcome, some stakeholders are calling for an emergency summit between the banks, telecom companies, and government regulators. This summit would aim to find a solution that prevents the suspension of USSD services while also addressing the financial obligations of the banks.
For now, the focus remains on the banks’ ability to meet their obligations before the deadline. Without an agreement, the suspension of USSD services is all but certain, and millions of Nigerians will be left scrambling for alternatives.
A Looming Crisis for Financial Inclusion
The suspension of USSD services would be a major setback for financial inclusion efforts in Nigeria, where access to banking services is still limited in many parts of the country. The Nigerian government has been working hard to promote digital financial services, but without USSD, many Nigerians will find themselves excluded from basic banking functions.
Industry analysts have raised alarms over the potential fallout from such a move. “If USSD services are suspended, we will see a significant setback in terms of financial inclusion,” said Tunde Akinwunmi, a financial analyst based in Lagos. “Many people will be cut off from the financial system, and this could exacerbate the divide between the digital haves and have-nots.”
