How Pantami’s interference turned a N17 billion USSD debt to N120 billion

Article Abstract 

  • Stakeholders within the telecom sector are blaming the Minister of Communications and Digital Economic system for the rise in USSD debt owed by banks. 
  • The Minister’s suspension of end-user billing was stated to have enabled the banks to proceed to gather fees for USSD with out paying the telcos. 
  • The Minister, nonetheless, made one final try this month to resolve the problem by one other assembly. However this effort was stalled by the absence of the CBN. 

Gamers within the telecommunications trade have blamed the Minister of Communications and Digital Economic system, Prof. Isa Pantami, for the present debt logjam between telecom operators and Deposit Cash Banks (DMBs) in Nigeria.  

The Minister’s interference in a regulatory answer launched by the Nigerian Communications Fee (NCC0 is alleged to have pushed the debt to N120 billion as of this month.

Based on them, as of 2019, when the debt was nonetheless round N17 billion, the NCC had give you end-user billing, which might have ensured that the financial institution buyer is made to pay on to the telecom operators for each USSD session.  

The Minister, nonetheless, suspended the regulation and opted to search out one other method of making certain ‘a peaceable settlement of the debt’ between the telcos and the banks. 

Whereas the deliberate end-user billing would have allowed the telecom operators to deduct their cash from the customers’ airtime, a March 15, 2021 assembly summoned by the Minister with the representatives of the cellular community operators (MNOs) and the banks, got here up with resolutions, which included that the banks ought to cost a flat payment of N6.98k per transaction on USSD and the banks ought to proceed to gather on behalf of MNOs instantly from clients’ financial institution accounts. 

As of the time the assembly was held in 2021, the debt owed by banks was stated to have hit N42 billion. However the banks proceed to cost their clients for the USSD with out remitting the identical to the operators.  

Regulation is completely different from coverage

Talking with Nairametrics, a number of the gamers within the telecom sector blamed the Minister for permitting the debt to rise to N120 billion by his interference in what may have been resolved by regulation. 

  • “That is what occurs whenever you combine regulation with coverage making. If the Minister had allowed the NCC to implement its Value Determinant on the usage of USSD, we might not be speaking about N120 billion debt by now.  
  • “The Minister’s position is to formulate coverage for the great of the trade, to not dabble into regulation, which is the mandate of the NCC. The regulator ought to have been allowed to handle the problem in one of the best curiosity of the trade. It’s now apparent that the Minister had failed on this regard and the trade is not going to overlook even after his exit,” a telecom stakeholder who wouldn’t need to be named acknowledged.  

One other official of one of many telecom corporations stated:  

  • “This debt can be one of many failures of the outgoing administration, particularly the Minister of Communications and Digital Economic system, who by his meddlesomeness has prevented an acceptable regulatory answer to the matter. Because it stands, we aren’t going again on the plans to disconnect the banks from the USSD platform, except they pay the debt.  
  • “That now we have not disconnected the banks now could be to permit the inauguration of the brand new authorities to go on with none rancour within the nation. After the inauguration, we’ll go forward with the disconnection and it’ll stay so till they clear the debt. We spend billions yearly to take care of the networks which the banks are driving on to supply this service that they don’t seem to be prepared to pay for even after charging their clients for utilizing the service.” 

The Minister’s justification 

Explaining why he suspended the transfer by NCC to implement an end-user billion system (the place the customers are charged instantly from their airtime stability for the usage of USSD channels versus company billing the place the banks paid the MNOs for the usage of USSD service) to handle the debt problem, Pantami had stated that he determined as a result of he was “genuinely besieged with a barrage of complaints on the tried graduation of end-user billing by service suppliers.”  

  • “USSD is a service to banks and to not the Telecom Customers, and as such, banks ought to see themselves as company clients of telecom operators with an obligation to pay for utilizing the telecom community and infrastructure, together with USSD channels prolonged to them for service supply to their clients. Cell Community Operators (MNOs) don’t have any direct relationship with financial institution clients, and can’t, subsequently, be charged instantly for the utilization of the USSD channel,” he stated. 

Final ditched effort 

Pantami, whose tenure ends on Might 29, nonetheless, made a final transfer this month to resolve the matter by summoning one other assembly of the MNOs, DMBs, NCC, and CBN. Nevertheless, the CBN didn’t attend the assembly slated for Might eleventh, 2023. 

The Minister in a letter despatched to the CBN Governor, Godwin Emefiele, dated eleventh Might 2023, expressed fear over the rising debt and regretted the absence of the CBN helmsman on the assembly that might have led to an answer. 

The letter, a duplicate of which was sighted by Nairmetrics, reads partly: 

  • “I write in respect of the above assembly scheduled for in the present day Might 11, 2023, acknowledgement of receipt of which out of your workplace is connected, please. The assembly was held with no consultant from the CBN in attendance regardless of assurances over the phone to my Chief of Employees that the CBN was to be represented. 
  • “Please recall that we met with the Nigerian Communications Fee (NCC), Cell Community Operators (MNOS), Affiliation of Licensed Telecoms Operators of Nigeria (ALTON), Affiliation of Telecommunications Corporations of Nigeria (ATCON), and Deposit Cash Banks (DMBS) represented by the Chairman, Physique of Financial institution CEOs on Monday 15 March 2021 to debate the indebtedness of DMBs Cell Community Operators for USSD companies. 
  • “Additional to the assembly, CBN and NCC İssued a joint press assertion on the settlement reached by all stakeholders. Copy is connected for ease of reference. 
  • “I obtained briefings at in the present day’s assembly, which CBN didn’t attend, that regardless of my intervention and a number of other conferences by all involved events, the debt has not been settled and has grown from 42 Billion on the time of my intervention to over 120 Billion as of the date and continues to extend by the seconds. I used to be additionally knowledgeable that the DMBs didn’t execute the Memorandum of Understanding (MOU) during which elementary phrases have been agreed on the assembly of fifteenth March 2021.” 

Approval for disconnection 

The absence of the CBN on the assembly and the lack to resolve the matter with the banks, it was learnt, prompted the Minister to approve the disconnection of the banks from USSD. This was additionally communicated to the CBN Governor within the Minister’s letter.  

  • “I’m certain you’ll agree with me that this stage of debt will not be sustainable and non-cooperation by DMBS, particularly contemplating the pivotal position of the telecommunications infrastructure within the implementation of the Federal Authorities’s Cashless Coverage and Digital and Monetary Inclusion Targets. 
  • “Within the circumstances, please notice that except the DMBS settle the excellent monetary obligations to MNOs for the USSD companies, I’ve directed the NCC to approve the MNOs’ request for the withdrawal of all USSD companies to the indebted DMBs efficient 7 pm, Might 12, 2023, till the stated excellent debt is absolutely settled,” the Minister stated in his letter to the CBN Governor. 

In the meantime, the CBN stated intervention is ongoing to resolve the debt problem between the telcos and banks. Reacting to the plans to disconnect banks from the USSD platform, the Ag Director, of company communication on the CBN, Dr Abdulmumin Isa, stated the Apex Financial institution may be very a lot conscious of the protracted dispute between the banks and telcos and has been partaking all stakeholders to make sure an amicable decision. 

Whereas noting {that a} assembly of the DMBs and telcos’ representatives was chaired by the CBN Governor to resolve the problem, he acknowledged the telcos proper to gather all legitimately earned charges because of them and to get better their price. 

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