NCC Says MNOs, Banks Should Negotiate USSD Rate

The Nigerian Communications Commission on Wednesday said it has removed the pricing limit set for Mobile Network Operators (MNOs) on Unstructured Supplementary Service Data (USSD) service.

Prof. Umar Danbatta, the Executive Vice Chairman, NCC, said the commission has amended its directive of July 2019 by removing the price limit placed on USSD to allow MNOs and financial institutions negotiate appropriate pricing structure for the service.

According to him, each USSD session of 20 seconds cost N1.63 per session on the MNO network.

He, therefore, said the cost should form the basis for negotiation between the two parties –MNO and other related USSD service providers.

This was coming after a dispute between MNOs and financial institutions in 2019, with MTN and other MNOs saying they will be charging USSD users directly instead of the free service previously offered to financial institutions providing USSD services.

In the amended determination of August 1, 2020, the NCC said if both parties failed to reach an agreement it would once again step in to determine the right rate for both parties.

However, telecommunications regulators have said the refusal to agree on a succinct rate that works for both parties or negotiate in good faith world result in discontinuation of service provision. Meaning, codes for USSD transactions may be withdrawn or the regulating body will impose sanctions on the entire service.

Telecommunication companies have blamed banks for profiting from their service yet refused to pay for the same service that has helped them expand their operations and reach to the unbanked.

In November 2019, Gbenga Adebayo, Chairman, the Association of Licensed Telecommunications Operators of Nigeria (ALTON), said telecommunications companies incurred expenses daily for providing banks USSD services.

He said, “The USSD is a service we are providing for the banks and there is a cost incurred by telecom operators for providing those services.

“The bank has given an erroneous impression to the public that it is a sunk cost and it is not because for the service to be allowed, the cell site must be powered, there must be transmission link available and our systems must interconnect with the systems of the banks. It is a recurring cost other than the initial capital.”

Banks, on the other hand, have said an agreement was reached with telecommunications companies on USSD service.