Telecom companies want a swift resolution as USSD bank debt reaches $200 billion

November 18, 2023 Samson Ayodeji

The telecom operators disclosed on Thursday that they owed $200 billion to Deposit Money Banks (DMBs) for Unstructured Supplementary Service Data (USSD). The telecom operators are represented by the Association of Licenced Telecommunications Operators of Nigeria (ALTON).

At a stakeholder meeting in Lagos with Dr. Aminu Maida, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), ALTON Chairman Gbenga Adebayo stressed that the debt must be paid in full. The banks that are in debt have not made a payment despite the Central Bank of Nigeria (CBN) and NCC’s meetings, requests, and interventions.

Adebayo did point out, though, that the country’s unstable foreign exchange problems will mean that the debt’s value will keep rising.

Impact of USSD indebtedness on telecom carriers’ services and customer repercussions

Unpaid debts are currently putting pressure on the USSD system, which is a part of many mobile services like mobile banking, balance queries, and prepaid mobile recharges. The financial difficulties that telecommunications firms are facing affect their capacity to upgrade and maintain service infrastructure, which has an immediate effect on the quality of the consumer experience.

A noteworthy consequence is the possible deterioration of service quality. To fund network upgrades, innovation, and maintenance, telecommunications companies need steady streams of income. Nevertheless, the USSD debts take money out of these sectors, which puts consumers at risk of interruptions, sluggish response times, and even service failures.

Furthermore, the debt problem might make it more difficult for the operators to launch fresh, enhanced services. Financial limitations resulting from the USSD indebtedness may cause innovations that could improve user convenience and experience to be shelved entirely or delayed. Customers may get restless with this service stagnation and long for improved features and functions that were otherwise possible.

The USSD debt crisis’s repercussions can still affect customers directly. User happiness is directly impacted by delays in releasing new features. Mobile banking customers who depend on these services for their daily financial activity may experience disruptions to their transactions, which are frequently dependent on USSD codes.

Moreover, there’s a chance that higher expenses will be transferred to customers. To make up for lost revenue, telecom companies may change their service costs or add new ones. Customers may be burdened by this and end up paying more for similar or even worse services.

Problems besetting Nigeria’s communications sector

Nigeria’s telecom sector faces a variety of difficulties, including complicated regulations and volatile foreign exchange rates. Innovation is hampered by navigating complex legal frameworks, and operating expenses are impacted by currency value swings, which impedes investment in infrastructure and technology.

These difficulties are entwined with the USSD debt situation, which adds a degree of financial instability. Notwithstanding these challenges, the industry’s contribution to social and economic advancement necessitates cooperative efforts between regulators and stakeholders to create transparent policies and procedures, promoting a robust telecom market in Nigeria.

The NCC’s function in USSD debt settlement

In Nigeria, the Nigerian Communications Commission (NCC) is essential to the regulation and management of the telecom sector.

The NCC is in charge of establishing rules, promoting fair competition, and defending the rights of service providers and customers.

Author

Samson Ayodeji

I am literally obsessed with technology. I love writing about the latest news in technology in different markets, segments and sectors across the world.

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