Nigerian telecom subscribers may soon see charges for Unstructured Supplementary Service Data (USSD) transactions deducted directly from their airtime, as discussions between telecommunications operators (telcos) and deposit money banks (DMBs) advance toward implementing an end-user billing system.
Under this new model, customers will be directly charged for USSD usage, with fees deducted from their mobile airtime rather than the traditional corporate billing system where banks were billed for the service. This shift aims to prevent the accumulation of debt, which has previously strained the relationship between telcos and banks.
Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), confirmed ongoing discussions, emphasizing that the transition seeks to accommodate subscribers, telcos, and DMBs. "We have now commenced discussion to migrate to End-User billing without disruption to services by subscribers," Adebayo told The Guardian. "The conversation has started; there is a migration process that we are going to agree with the banks."
Historically, banks have advocated for end-user billing, as evidenced by a 2019 proposal from the Body of Banks’ Chief Executive Officers (BOBCEO) to ALTON. The banks had resisted sharing USSD transaction revenue with telcos, arguing it would increase costs significantly. This disagreement contributed to the accumulation of USSD debts over the years.
Currently, subscribers are charged N6.98K for each USSD transaction since March 16, 2021. As of November 2024, USSD debt stood at N160 billion, prompting the Nigerian Communications Commission (NCC) to direct telcos to deactivate non-compliant banks in January. ALTON reports significant progress in debt recovery, with many banks adhering to regulatory directives.
Joint directives from the Central Bank of Nigeria (CBN) and NCC mandate DMBs and MNOs to agree on debt repayment plans by January 2, 2025, with a July 2, 2025 deadline for completion. Additionally, the regulators stipulated that 60% of pre-API invoices be paid as full settlement and 85% of post-API invoices (from February 2022) be cleared by December 31, 2024.
The transition to end-user billing hinges on DMBs and MNOs complying with these directives. The NCC will activate regulatory processes to revert to end-user billing only for compliant entities. In the interim, a "10-second rule" is in effect, exempting USSD sessions lasting less than ten seconds from billing.
This new billing plan represents a potential resolution to long-standing financial disputes between telcos and banks, promising greater transparency and efficiency in USSD service delivery for Nigerian subscribers.
