Telcos Tackle Banks Over Proposed 450% Increase In USSD Charge

TELECOMS companies on Tuesday accused banks in Nigeria of converting the Unstructured Supplementary Service Data (USSD) channel, which should be a service channel dedicated to promoting financial inclusion, into a revenue line.

The telcos made the allegation in a letter its wrote to the Body of Banks’ Chief Executive Officers (BOBCEOS), through the Association of Licensed Telecoms Companies of Nigeria (ALTON).

In the letter signed by its chairman, Gbenga Adebayo, the telcos said contrary to insinuation by the bank CEOs that telcos were sabotaging the financail inclusion drive of the federal government, the telcos have always supported the drive while the banks have been the greatest beneficiaries.

“We write with reference to the letter dated 16th September 2019 from BOBCEOS, addressed to some of our members alleging anticompetitive practices on Reverse Corporate Billing for Bank USSD Services.

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“In the referenced letter, the BOBCEOS, amongst others, the demand to banks to subscribe to corporate-level billing compels them to pay N4.5 per 20secs USSD session; amounting to 450per cent increase in tariff; the USSD cost will destroy the financial inclusion strides made by banks where 20m or more citizens have been included via services running on USSD.

“The USSD cost would render the laudable financial inclusion initiatives of the Federal Government of Nigeria unsustainable which would impede development and economic growth.

“Reverse corporate billing gives no visibility on actual sessions used, forces banks to pay for failed sessions and leaves banks exposed to spurious USSD usage that will increase the cost.

“It is proposing the implementation of end-user billing for bank customers,” the letter explained.

Given the severity of the allegations and proposal from the BOBCEOS, the telcos restated its commitment to National Policies including Financial Inclusion objectives.

“As responsible Nigerian corporate entities, our members make significant socio-economic contributions to the country and have been an enabler to every single sector of the economy including the financial sector.

“For example, it will be impossible to connect Automated Teller Machines (ATMs) and Point of Sale (PoS) Terminals across the length and breadth of Nigeria without our members’ dedication and support.

“In addition, the cashless policy drive and the instant payment solution of the financial sector would not have been possible without our members’ support.

It is also worthy of note that ATLON committed to materially improve financial inclusion rates and to deliver access to financial services to 90 million customers over 30 months if our members are allowed to provide financial services directly to end-users,” Adebayo said.

The telcos faulted BODCEOS’ position on the 450per cent increase in USSD cost-per session of 20 seconds.

“As the BOBCEOS’ maybe aware, the revised USSD rates proposed by our members are based on the conclusion of a cost study by the NCC.

“The study was communicated in its ‘Determination of USSD Pricing 2019’, which came into effect on 1st September 1 2019,” the telecoms stated.