The long-term dispute between telecommunications operators and commercial banks over unpaid Unstructured Supplementary Service Data (USSD) fees appears to have reached an amicable settlement, as telecom companies confirm the recovery of N170 billion (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 has cleared the way for the implementation of a new end-user billing system—marking a major turning point in one of the longest-running disputes in Nigeria’s digital finance ecosystem. According to Adebayo, “Only three banks have yet to fully settle their outstanding balances, but they have entered into repayment plans and are expected to complete payments shortly.
The USSD debt saga began around 2019 when telcos demanded payment for their infrastructure and network usage, which banks used to provide mobile banking services to customers through USSD shortcodes. USSD had become a critical tool for mobile banking, particularly for millions of Nigerians without access to internet-enabled devices or data. However, while the banks charged their customers for USSD transactions, telcos claimed they received little to no compensation for the infrastructure and bandwidth consumed.
The disagreement stemmed from the mode of billing and who should bear the cost. Banks preferred corporate billing, where the cost of USSD sessions was billed centrally and deducted from a shared account. However, telecom operators argued that this model had led to non-payment and mounting debts, even as usage volumes soared.
Tensions came to a head in 2021 when the debt figure surged above N40 billion and ALTON threatened to suspend USSD access for several banks. The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) were forced to intervene multiple times to prevent a disruption of mobile financial services.
Despite various interventions and partial repayments, the debt continued to balloon, reaching around N80 billion in 2022, and later climbing to N180 billion by January 2025, according to ALTON. Each round of talks between the CBN, NCC, telcos, and the banks resulted in temporary reliefs or promises, but no lasting resolution.
There was tension in the banking sector and their customers when the telcos threatened that from Monday, January 27, 2025, they will disconnect nine banks from having access to its Unstructured Supplementary Service Data (USSD) code over their failure to pay the USSD services debts, which accumulated to over N200 billion as of October 2024.
The accumulated sum however dropped to over N160 billion as of November 2024, after some banks paid off their debts. The nine banks included Fidelity Bank, First City Monument Bank (FCMB), Jaiz Bank, Polaris Bank, Sterling Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank and Zenith Bank.
The decision to disconnect the indebted banks from having access to the USSD code was sequel to an approval given by the Nigerian Communications Commission (NCC), to all telecoms operators to withdraw the USSD services on January 27.