USSD debts: Why NCC approved disconnection of banks

Following attempts at a peaceful resolution of the dispute over fees that DMBs must pay to MNOs for the USSD sessions that DMB customers use through their short codes, the Nigerian Communications Commission (NCC), which oversees the telecom industry, agreed to the demand of DMBs that MNOs suspend allowing them to operate.

Text messages are sent via the Global System for Mobile Communications (GSM) protocol, which is known as USSD or Unstructured Supplementary Service Data. Short Message Service (SMS) is comparable to it. It makes use of codes composed of the characters found on a mobile phone. DMB consumers use USSD short codes to conduct banking services, and some banking customers prefer them since they allow them to conduct electronic transactions without requiring a smartphone.

A document our reporter saw yesterday states that, based on data as of November 2024, the debt currently stands at approximately N160 billion.

The origin of the debt was tracked back to September 2019, when it began to accrue.

Concerned that the debt will keep piling up, NCC and the regulator of the financial sector, the Central Bank of Nigeria (CBN) issued a joint circular on July 27, 2023 following a stalemate on the payment of the accumulated debt between the DMBs and MNOs.
"A sizable portion of the debt was still outstanding in spite of the circular. A resolution was then made at a meeting between the CBN, NCC, banks, and MNOs on September 3, 2024, to reconcile all outstanding invoices by October 3, 2024, at the latest, and to finalise any payment agreements by November 4, 2024."The NCC and CBN had to step in again and issue a second joint circular on December 20, 2024 to further direct the DMBs to pay the outstanding amounts despite this resolution," the paper stated.