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USSD Charges: ‘Banks Are Biggest Beneficiaries’, Telcos Insist

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  • USSD Charges: ‘Banks Are Biggest Beneficiaries’, Telcos Insist

Telecommunication companies have reacted to the Bank CEO’s statement on alleged double-billing for financial transactions through the Unstructured Supplementary Service Data (USSD) channel.

The Association of Licensed Telecommunication Operator of Nigeria (ALTON) said the banks are the biggest beneficiaries of the USSD charges.

MTN Nigeria had recently sent a message to subscribers that it will start charging them for USSD access to banking services.

“Yello, please note that from October 21, we will charge N4 per 20 seconds for the USSD access to banking services. Thank you,” the message reads.

However, Body of Bank CEOs on Monday denied having any knowledge of the direct USSD access charge to customers.

“Our attention has been drawn to SMS sent on Saturday, October 19, by MTN Nigeria Communications PLC (“MTN”) to customers of banks in Nigeria in respect of the above.

“That the banks did not ask MTN to start charging customers as contained in the text message. The decision on whether, and what amount, to charge a customer for accessing USSD is entire that of the telco company, in the same way, a customer is billed for calls, SMS, and data.

“MTN is the only Telco that is yet to implement end-user billing which is the standard practice for customer-initiated transactions. This is despite the fact that the banks, working with the Central Bank of Nigeria (CBN), have engaged MTN over a period of more than one year to try and bring down the cost of USSD to aid financial inclusion.

“That the banks are determined to pursue the National Financial Inclusion Strategy of the Federal Government of Nigeria and will continue to advocate that Telcos identify wholeheartedly with this laudable initiative and implement transparent and low pricing model in the use of USSD access codes.

Reacting on Tuesday, the telcos in a letter signed by the Chairman of ALTON, Gbenga Adebayo said the “fact that the biggest beneficiaries in the USSD value chain are the banks and that the allegation of destroying the financial inclusion strides by our members are unfounded.

“It will be impossible to connect Automated Teller Machines and Point of Sale terminals across the length and breadth of Nigeria without our members’ dedication and support.

“In addition, the cashless policy drive and the instant payment solution of the financial sector would not have been possible without our members’ support.”

Meanwhile, the  Minister of Communications, Dr. Isa Pantami has directed the Nigerian Communications Commission to suspend the USSD plan by MTN.

Some telcos had reportedly initiated end-user billing for the USSD transactions due to the suspension of corporate billing by the banks.

ALTON described the end-user billing as an indirect methodology by banks in charging the USSD access fees.

“Why will the banks charge customers and not share the cost with the operators and you don’t expect the operators to charge customers? Banks continue to take the money without giving anything to the operators.”

“Given that the USSD channel has become an established and most preferred channel for the banks especially for the banked population, we state that asking the customer to pay for the USSD is akin to requesting a customer to pay a bank’s landlord access fees prior to gaining access to banking premises.”

The Central Bank Governor, Godwin Emefiele also said: “I opposed it and I have told the banks that we will not allow this to happen; the banks gave this business to the telecoms companies, and I leave the banks and the telecom companies to engage.”

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Meta Platforms Inc.’s Astonishing Rally Adds $1 Trillion in Value

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Meta Platforms Inc., formerly known as Facebook, has witnessed an extraordinary rally that has propelled its market value by $1 trillion.

The tech giant’s record-breaking surge, fueled by strategic investments in artificial intelligence (AI), underscores its resilience and adaptability in navigating the ever-evolving digital landscape.

Since its darkest days in 2022, Meta’s shares have undergone a remarkable transformation, soaring to new heights and shattering records along the way.

Despite its monumental growth, some perspectives suggest that Meta is still trading at a discount with its shares valued at 24 times estimated earnings early Wednesday, closely aligned with its 10-year average and just below the Nasdaq 100’s multiple of 25 times.

Among its peers in the Magnificent Seven group of big tech companies, only Alphabet Inc. boasts a lower multiple, standing at approximately 21 times.

AI emerges as the primary catalyst behind Meta’s astonishing rally, driving gains and serving as a harbinger of future growth prospects.

Meta’s substantial investments in AI have revolutionized ad targeting and content recommendation algorithms, enhancing user engagement and advertiser relevance.

The strategic bet on AI has paid off handsomely, with profits tripling in Meta’s most recent quarterly report, accompanied by a surge in revenue growth. Such robust earnings prompted Meta to announce a $50 billion buyback program and implement a dividend, further solidifying investor confidence in the company’s trajectory.

Conrad van Tienhoven, a portfolio manager at Riverpark Capital, lauds Meta’s strategic focus on AI, stating, “Outside of chip or hardware companies like Nvidia or Dell, no company has benefited more from AI than Meta, just in terms of the impact on growth.”

Meta’s unparalleled surge, exceeding 450% from its nadir almost 18 months ago, positions it as a standout performer among its peers. This year alone, Meta’s shares have surged by approximately 46%, trailing only chipmaker Nvidia Corp. within the Magnificent Seven cohort.

The recent selloff that preceded Meta’s current rebound underscored investor concerns over its spending on the metaverse initiative. However, Meta’s proactive measures, including a concerted focus on cost efficiency and innovation, have restored market confidence.

Rick Bensignor, chief executive officer of Bensignor Investment Strategies, affirms Meta’s trajectory, stating, “Meta has figured out how to get rid of unnecessary spending, which has been a real balance sheet plus, and it continues to innovate.”

As Meta prepares to unveil its first-quarter earnings results on April 24, investors eagerly anticipate updates on key metrics such as ad revenue growth and the efficacy of AI solutions.

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Startups

Nigeria Leads African Startup Funding with $160 Million in First Quarter

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Despite challenges in the global economy and a slowdown in funding across Africa, Nigerian startups have demonstrated resilience by securing $160 million in funding during the first quarter of this year.

This shows Nigeria’s position as a key player in the continent’s vibrant startup ecosystem and highlights the potential for continued growth and innovation in the Nigerian tech sector.

A new report by Africa: the Big Deal noted that Nigeria, alongside Kenya, South Africa, and Egypt, accounted for 87 percent of all startup investments in Africa during this period.

The breakdown of funding among these four countries showed Nigeria leading the pack with $160 million, followed by Kenya with $108 million, South Africa with $72 million, and Egypt with $53 million.

This data underscores Nigeria’s dominance in attracting investment within the African startup landscape, cementing its status as a hub for innovation and entrepreneurship on the continent.

According to the report, the majority of investments were channeled to startups headquartered in these four countries, with Nigeria and Kenya capturing the lion’s share of funding.

Only a handful of other African nations managed to secure more than $5 million in funding during the first quarter, highlighting the concentrated nature of startup investment activity in Africa.

Despite the challenges posed by the COVID-19 pandemic and economic uncertainties, African startups have continued to demonstrate resilience and adaptability. Many entrepreneurs have innovated and created new business models to navigate the evolving landscape, driving growth and attracting investor interest.

Prashant Matta, SP of Panache Venture, acknowledged the decline in funding as a global issue exacerbated by economic challenges. However, he expressed optimism about Nigerian startups, citing mega-deals such as the $100 million investment into Nigerian mobility fintech startup Moove. These mega-deals, fueled by investments from outside Africa, show the confidence of international investors in the Nigerian tech ecosystem.

The report highlighted that the logistics and transport sector emerged as the top recipient of funding in the first quarter, totaling $151 million from 14 deals. Nigerian startup Moove raised a significant $110 million during this period.

Following closely behind, fintech attracted the second-highest funding with $105 million, followed by agric and food with $50 million, energy with $49 million, and healthcare with $45 million. These sectors reflect the diverse range of opportunities and innovations driving growth in the Nigerian startup ecosystem.

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Social Media

Trump Media & Tech Group Plummets, Wiping Out $2.8 Billion in Value

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Trump Media & Technology Group Corp., the social media predominantly owned by former U.S. President Donald Trump, has lost $2.8 billion in market value in the last few days.

The tumultuous downturn comes as a wave of retail traders who once fervently boosted the stock have begun to offload their holdings.

The company, which encompasses the Truth Social platform, has seen its stock plummet by 36% since its closing high on March 26.

This nosedive not only erased the gains achieved in the aftermath of its merger with Digital World Acquisition Corp., but it also pushed the stock below its pre-merger trading levels.

Initially, Trump Media enjoyed a meteoric rise in its early days as a publicly traded entity following the merger with DWAC, the blank-check company facilitating the deal.

However, the allure of the stock among individual investors, who saw it as a means to express support for the former president’s potential 2024 reelection bid, has waned significantly.

As the stock continues its downward spiral, the once-projected paper windfall for Donald Trump himself has also dwindled.

Trump’s anticipated gains from the venture have plummeted by approximately $1.6 billion, leaving him with an estimated $2.9 billion in paper wealth.

However, realization of this wealth remains contingent upon a six-month lock-up agreement, delaying Trump’s ability to sell shares.

The timing of Trump Media’s downfall coincides with a flurry of legal troubles facing the former president. With just a week until the commencement of his first criminal trial in Manhattan, Trump faces charges related to falsifying business records in connection with hush money payments to a pornographic actress prior to the 2016 election.

Also, Trump is slated to undergo deposition in a civil lawsuit filed against him and Trump Media by two co-founders alleging share dilution prior to the merger.

Despite the substantial loss in value, Trump Media retains a market capitalization of approximately $5 billion, underscoring the paradoxical valuation dynamics in the current market environment.

The company’s meager revenue of $4.1 million in the preceding year contrasts sharply with its lofty market capitalization, raising concerns about the sustainability of its valuation.

The dramatic downturn of Trump Media & Technology Group mirrors the volatile trajectory of past meme stocks like GameStop Corp. and underscores the inherent risks associated with companies emerging from SPAC mergers.

As the company grapples with its dwindling valuation and mounting legal challenges, the future of Truth Social and its associated ventures remains uncertain in the ever-shifting landscape of the digital realm.

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