Nigerian telecom operators set to disconnect banks over ₦120 billion USSD debt

The long-running tussle between telecom companies and banks in Nigeria seems to have come to an end as the country's telecoms regulator, Nigerian Communications Commission (NCC) has given the approval for telecom companies to disconnect banks that owe a total of ₦120 billion (~$260 million) in Unstructured Supplementary Service Data (USSD) debt.

The announcement came from Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), in a statement released Friday in Lagos. The approval was granted due to the banks' failure to make commensurate payments despite efforts to resolve the issue and prevent any impact on services.

The tussle between Telcos and banks in Nigeria is over the pricing model for USSD services—mainly, the charges, mode of collection, and liability for payment. In 2021, MNOs threatened to disconnect banks because of unpaid debts totalling ₦42 billion. But, the Minister of Communication and Digital Economy, Prof. Isa Pantami, stepped in to prevent the disconnection. He did this because it would have negatively affected the government's digital and financial inclusion policy.

Since then, the bill has ballooned to ₦120 billion in unpaid debts. Adebayo explained that unless banks fulfil their debt obligations, MNOs will disconnect the indebted banks from USSD services.

If implemented, it could have far-reaching consequences for Nigerians who rely on USSD banking services, as it would impact financial inclusion and require banks to reevaluate their operations.