MTN, GLO, Airtel, 9Mobil to Disconnect Banks Over N120b Debt

Mobile telecommunications companies in Nigeria, MTN, Glo, Airtel, and 9mobile will disconnect Deposit Money Banks (DMBs) in the country over one hundred and twenty billion naira debt.

The companies announced that they have received approval from the Nigerian Communications Commission (NCC) to do so.

The Banks have failed to pay the debt owed to operators for Unstructured Supplementary Service Data (USSD) services.

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In a statement released on Friday, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) stated that they would disconnect the banks if they failed to pay.

The operators had been negotiating with the banks for some time, but have been unable to reach a satisfactory agreement. The approval from the NCC gives them the authority to take action.

ALTON, in a statement signed by its Chairman, Engr Gbenga Adebayo, explained the banks have refused to cooperate with the telecom operators over the payment of the debt.

It said:

“The DMBs have continued to incur greater and greater debt, without making the commensurate payments. Every time some progress is made, the DMBs come up with reasons to take stakeholders several steps back, in this matter.

“Members of the public will recall that MNOs and DMBs have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection, and liability for payment of the outstanding and continuous service fees due to the MNOs (which currently stand at over N120 billion).”

Narrating the events that led to the current decision, ALTON said the MNOs in 2021 had sought to disconnect DMBs due to unpaid debts, which stood at forty-two billion naira (N42 billion) at that time.

The Minister of Communication and Digital Economy, Prof Pantami intervened and asked the MNOs not to disconnect DMBs as the action would negatively impact the Digital and Financial Inclusion policy of the Federal Government.

The Nigerian Communications Commission (NCC), Association of Licensed Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON), and Deposit Money Banks (DMB) represented by the Chairman, Body of Bank CEOs subsequently met on 15 March 2021 to discuss indebtedness of DMBs to MNOs for USSD services.

Further to the meeting, CBN and NCC issued a joint press statement on the agreement reached by all stakeholders.

It read:
“The Honourable Minister of Communications and Digital Economy and the NCC have made several efforts to get the banks to show good faith and sign an agreement, in the national interest, based on the resolutions reached at that meeting. Unfortunately, the patriotic intervention of the Minister and the NCC have been taken for granted by the DMBs, as two years after, the banks have failed to sign a final agreement.

“It is pertinent to note that the contract between MNOs and DMBs on the use of USSDs for banking transactions is strictly commercial and MNOs are at liberty to withdraw the services if it is established that the transaction is unprofitable to them.

“MNOs have invested billions of naira in expanding their systems to accommodate the USSD needs of DMBs over the years. This has resulted in more Nigerians having access to banking services, in addition to enabling banks to trim costs by requiring less branches to service their growing customers. Unfortunately, MNOs are not getting paid for their services, and the debt that stood at N42 billion in 2021 has now risen to over N120 billion.”

Meanwhile, reports held that the level of debt owed by several Deposit Money Banks (DMBs) to ALTON was currently at an unsustainable level due to the continuous upgrade and operation of systems and infrastructure dedicated to supporting USSD transactions.

Given the time and value of the huge cost of these upgrades,
ALTON has decided to disconnect the banks until the N120 billion debt was paid.

Mobile telecommunications companies have been providing USSD services to banks for many years.

The services allowed customers to access banking services using their mobile phones.