Nigerian Communication Commission (NCC) Reverses Determination on USSD Pricing

Nigerian Communication Commission (NCC) Reverses Determination on USSD Pricing

In July 2019, the Nigerian Communication Commission (NCC) waded into a dispute between telcos and banks, over Unstructured Supplementary Service Data (USSD)’s pricing. Banks and telcos had increased the charges on transactions carried out using the USSD channel, and it didn’t augur well with consumers.

As consumers protested the increment, the regulators of banking and communication industries ordered a reversal of the added pricing on USSD.

“After receiving briefing about the proposed USSD charges, I realized there was no justification for the new tariff and consequently, I directed its immediate suspension. Any telecom operator that violates this directive would be sanctioned appropriately,” The Minister of Communication and Digital Economy, Dr. Isa Pantami said then.

The CBN governor, Godwin Emefiele told the banks then that the charges incurred using the unstructured supplementary service data is sunk cost and would not be allowed to happen.

“I have told the banks that they have to move their business, move their traffic to a telecom company that is ready to provide it at the lowest cost possible, if not at zero cost. And that is where we stand, and we must achieve it,” he said.

Based on these directives, the proposed additional USSD charges were quashed, even though the telcos protested.

However, over one year after the directive was given; the Commission has made a turnaround to allow the industries’ players to decide how much is paid and who is paying.

In a press release signed by NCC’s Director of Public Affairs, Dr. Ikechukwu Adinde, on Wednesday, the Commission announced that it is reversing its directive restricting mobile network operators from implementing increased charges on transactions executed through USSD platform.

The Nigerian Communications Commission, in furtherance of its mandate to protect the interests of consumers and support a robust telecommunications sector, has revised its Determination on Unstructured Supplementary Service Data (USSD) pricing published on the 23rd of July, 2019.

The amendment was necessitated following a protracted dispute between Mobile Network Operators and Financial Institutions on the applicable charges for USSD services and the method of billing.

As a responsive and effective regulatory authority, the Commission recognises that its policies are not static and may be modified from time to time as circumstances demand.

This is coming on the heels of a recent directive by the Hon. Minister of Communications and Digital Economy, Dr. Isa Ali Pantami, regarding a review of the USSD pricing by all parties involved, following a presentation made by the Commission on the billing structure, determination of USSD pricing, current status and the way forward.

Speaking during the presentation, the Minister stated that he took the decision to suspend the commencement of end-user billing (where the consumers are charged directly from their airtime balance for use of USSD channels as opposed to corporate billing where the banks paid the MNOs for the use of USSD service) because he was “genuinely besieged with a barrage of complaints at the attempted commencement of end-user billing by service providers.”

The Minister also clarified that “USSD is a service to banks and not to the Telecom Consumers, and as such, banks should see themselves as corporate customers of telecom operators with a duty to pay for using the telecom network and infrastructure, including USSD channels extended to them for service delivery to their customers.”

According to him, “Mobile Network Operators (MNOs) have no direct relationship to bank customers, and cannot, therefore, charge directly for usage of USSD channel.”

The USSD channel has evolved over time from a telco-exclusive channel used for only telco services such as balance inquiry and recharges to a channel for the deployment of a broad spectrum of services, including financial, insurance, agricultural, government services and more. The use of USSD channel has become a critical resource in the economy even more so in this era of the Covid-19 pandemic that has witnessed a rise in reliance on digital services.

The Executive Vice Chairman of the NCC, Prof. Umar Garba Danbatta, in the interest of the consumers and other stakeholders, has revised the Determination previously issued by removing the Price Floor and the Cap to allow the Mobile Network Operators and the banks negotiate rates that will be mutually beneficial to all parties concerned.

The NCC also determined that Mobile Network Operators must not charge the consumers directly for the use of USSD channels for financial services in the form of end-user-billing. The transaction should be between the MNOs and the entity to which the service is provided (i.e. Banks and Financial Institutions). A copy of the Determination is available on the NCC’s website, www.ncc.gov.ng.

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One thought on “Nigerian Communication Commission (NCC) Reverses Determination on USSD Pricing

  1. The banks introduced USSD to their customers, but now want telcos to collect money from those customers. You deployed a service you believed would enhance customer service and experience, but didn’t want to pay the providers? It’s amazing how our bankers think. The same people that know how to guard their own investments jealously don’t believe telcos deserve to be paid what they feel is the appropriate value for their services, and so the former threw consumers into the mix, just to muddle up simple thing.

    No wonder Naira is losing value, because many of them would later find themselves at CBN, and we expect them to come up with sound monetary policies.

    MDAs don’t want to pay energy bills or leased apartment, banks don’t think it’s morally right to pay for USSD, citizens don’t want to pay for many services provided. Nobody seems to like paying here, and Nigeria may as well stop servicing its debts.

    Some sort of exorcism is needed in the land, for sure.

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