USSD: Telcos rake in N170bn from banks
Chairman, Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo
USSD debt: Telcos recover N170bn from banks
• Only three banks still indebted.
• All banks have committed to structured repayment plans.
The long-term dispute between telecommunications operators and commercial banks over unpaid Unstructured Supplementary Service Data fees appears to be drawing to a close, as telecom companies confirm the recovery of 95 per cent of the N180 billion owed.
Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, announced the progress on Thursday, stating that only three banks remain indebted, all of which have now committed to structured repayment plans.
This development signals a vital step towards resolving a five-year standoff that had threatened mobile banking services, a crucial channel for millions of Nigerians, particularly in rural areas with limited internet access.
“The debt, which stood at about N180bn as of January this year, has now been cleared up to 95 per cent, with only three banks left to pay,” said Adebayo during a virtual media briefing. The telecom executive did not disclose the names of the defaulting banks
His comments came a day after ALTON, the telecom group which he currently pioneers, announced the rollout of a new billing model, under which customers are charged directly for USSD services from their mobile airtime, rather than through their bank accounts.
The model, known as end-user billing, allows telecom operators to deduct the standard N6.98 per 120-second USSD session directly from users’ airtime balances. Customers are charged only after receiving and approving a prompt to opt in to the service.
The executive clarified that while migration to the new model is optional, banks choosing to retain the older corporate billing arrangement must have fully cleared their outstanding debts and must remit all future service fees promptly.
“Those who may not want to migrate to the new method can continue with corporate billing, provided they have paid all their debt and will not owe telecom operators, since they are deducting money from their customers,” he explained.
The repayment progress and billing model transition mark the latest development in a conflict that began in 2019, when telecom operators accused banks of withholding payment for services already rendered.
By the end of 2024, operators had reportedly provided over N200bn worth of USSD services without full compensation. The infrastructure for USSD is owned by telecom companies, while banks utilise it to deliver services to their customers.
On multiple occasions, telcos threatened to disconnect USSD services, but never executed the threats due to interventions by financial and communications regulators.
In 2021, the Central Bank of Nigeria and the Nigerian Communications Commission introduced a temporary measure, a N6.98 flat rate per session to be collected by banks and remitted to the operators. However, implementation was inconsistent.
A joint directive issued by the CBN and NCC in December 2024 mandated banks to pay 60 per cent of outstanding debts by January 2, 2025, clear all prior dues by 2 July, and settle 85 per cent of new charges by year-end.
According to Adebayo, one major bank has successfully adopted the new model and reported positive initial results, while others are in the process of migrating.
“One of the major banks in the country has successfully migrated to the system with initial positive trial results, while others are in the process of being migrated,” he said.
On Wednesday, the National Association of Telecoms Subscribers welcomed the development, describing the shift to end-user billing as a long-overdue reform.
“It brings transparency to how users are charged and ensures that operators are paid for the services they provide,” said President of the association, Adeolu Ogunbanjo.
“Before now, banks would deduct the money from our accounts and fail to remit it to the telcos. It was always a problem,” he said.
