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Telecom Firms Stand Firm: No Forgiveness for Banks’ N120bn USSD Debt

Telecom industry takes a tough stance, refusing to forgive banks’ N120bn debt and threatening disconnection

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The ongoing clash between telecommunication firms and banks over the N120 billion Unstructured Supplementary Service Data (USSD) debt has taken a new turn.

Telecommunication companies have now declared that they will not show leniency and forgive the outstanding debt owed by banks.

The Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, made this revelation. He emphasized that banks must fulfill their obligation by paying off the debt and warned that disconnection of banks from USSD services would be the consequence if they failed to comply, even after all attempts at resolving the issue had been exhausted.

Adebayo disclosed that despite the disconnection notice previously issued by banks to telecom operators, the banks have yet to respond positively, thus endangering the continuation of USSD services for financial transactions.

“There has been no progress, and we are going to go ahead,” Adebayo stated firmly.

“The parties are now following the terms of the agreement between them. Appropriately, each will enforce the disconnection when the time is appropriate. But I can’t say to you that the problem is solved, and I can’t say to you that the problem will go away. For those who are thinking that the banks will not pay, and the operator will forgive it, that will never happen. The sums involved must be paid a hundred per cent. We are not backing down.”

Adebayo insisted that the telecoms industry would maintain its stance, pressing for payment or the disconnection of services.

He argued that banks held a moral obligation to settle the debt, considering they had been collecting fees from their customers for the USSD service.

“The banks have the moral obligation to pay,” he emphasized. “You can see what is happening, that people are being held to account because these are services that are rendered and paid for. They deduct money from users of the channel, whereas the money due to the operator is not remitted. They are taking money from the bank account of users already. They have the moral burden to pay the debt, and it is not going away.”

Adebayo also confirmed that the disconnection process was already underway, and the telecoms industry would take the necessary actions when the situation demanded it.

This disagreement between banks and telcos regarding USSD payment has been ongoing since 2019. Initially, telecom operators claimed that banks owed them N32 billion, but the debt has since escalated to N120 billion.

USSD remains a critical financial infrastructure for many Nigerians, as only about 44% of the population owns smartphones, according to the Alliance for Affordable Internet. In 2020 alone, a staggering 762.19 million transactions were conducted using USSD, as reported by the Nigeria Inter-Bank Settlement System Plc.

The future of USSD now hangs in the balance, particularly after the Chief Executive Officer of Guaranty Trust Holding Company expressed his opinion, stating, “USSD is a clumsy technology. It’s not state-of-the-art. The best way to have financial inclusion is to crash the cost of data so that data becomes more affordable. Then we can use what is a superior technology.”

As the battle for the payment of USSD debt intensifies, the telecoms industry and banks find themselves at a crossroads, with the fate of this widely utilized financial service hanging in the balance.

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Telecommunications

Nigeria’s 5G Network Subscriptions Soar to Half a Million, Broadband Penetration at 47.01%

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The Executive Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, revealed that Nigeria’s Fifth Generation (5G) network subscriptions have surpassed half a million users.

Broadband penetration has surged to 47.01% as of July 2023, marking a significant leap in the country’s telecommunications landscape.

Speaking from Kano, Prof. Danbatta highlighted the remarkable achievements of the telecoms industry since 2015. In July, he reported that 5G subscriptions had surged to over 60,000 in the nation.

Also, he emphasized the nation’s ambitious goals, aiming to achieve 50% broadband penetration by the close of 2023 and a remarkable 70% broadband penetration by the conclusion of 2025.

In a statement, Prof. Danbatta stated, “Moreover, the telecommunications sector has undergone a substantial transformation, with its contribution to the Gross Domestic Product (GDP) growing from 8% in 2015 to an impressive 16% quarterly as of the second quarter of 2023, signifying its growing significance to the Nigerian economy.”

He further elaborated, “Furthermore, the authorization of additional telecommunications companies to operate within Nigeria’s telecoms sector has led to a remarkable upsurge in investments. In 2015, the sector attracted $38 billion in investments, a figure that has now soared to an astonishing $75 billion and continues to rise daily. Notably, the NCC’s sale of 5G C-Band Spectrum has generated over $847.8 million in revenue for the Federal Government.”

In related news, the Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, emphasized Nigeria’s commitment to bolstering telecommunication connectivity in unserved and underserved communities.

Minister Tijani stressed that connectivity serves as a catalyst for progress and highlighted the nation’s eagerness to establish partnerships aimed at bridging the digital divide.

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Nigerian Communications Commission Reports Remarkable Growth in Telecom Sector

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Prof. Umar Danbatta, the Executive Vice-Chairman of the Nigerian Communications Commission (NCC), has revealed impressive figures showcasing the robust growth of telecom investments in the country.

During a recent media interaction held in Kano on Saturday, Danbatta disclosed that the telecom investment inflow in Nigeria had surged from $38 billion to an astounding $77 billion by the second quarter of 2023.

Also, he highlighted that the telecommunications sector had contributed 16 percent to the nation’s Gross Domestic Product (GDP) during the same period.

Danbatta attributed this growth to a combination of factors, primarily “thorough sustained regulatory excellence and operational efficiency by the commission.”

Since taking office as the EVC of NCC in 2015, he noted that the sector’s contribution to GDP had more than doubled, from around eight percent to the current 16 percent.

In addition to this, Danbatta underscored the industry’s achievements, stating, “We have witnessed explosive growth, improved regulatory standards, and digital innovation that have generated global recognition.”

He further revealed significant milestones in telecommunications usage, with 218.9 million telephone users, 159.5 million internet subscribers, and 88.7 million broadband users in Nigeria within the reviewed period.

However, Danbatta acknowledged that several challenges still hampered the full potential of broadband deployment in the country. These challenges include issues related to the right of way, fiber cuts, high capital requirements for deployment, multiple taxations, and complex regulations.

Nevertheless, Danbatta assured stakeholders that the NCC was committed to addressing these obstacles and navigating through regulatory complexities, digital divide, and literacy issues.

As part of their initiatives to enhance communication and emergency response, the NCC announced plans to establish emergency communication centers in all 36 states of the federation and the Federal Capital Territory, Abuja.

Furthermore, the commission had increased research grants for universities from N20 million to N30 million, benefitting three universities thus far.

Danbatta explained that the NCC aimed to provide accessible and affordable telecom services as an enabler for the country’s economic advancement.

However, he also highlighted some ongoing challenges, such as the wilful destruction of NCC facilities and the burden of numerous taxes imposed on telecommunications companies.

Despite these challenges, the NCC remains committed to engaging with the media industry and the public to ensure transparency and to keep everyone informed about its activities.

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Nigeria’s Largest Telecom Operator, MTN, Enhances Broadband Reach with 10MHz Spectrum Approval

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MTN, Nigeria’s leading telecom operator, has received approval for an additional 10MHz spectrum allocation within the 2.6GHz spectrum band.

This development is poised to significantly bolster broadband coverage across all 36 states of the federation, including the Federal Capital Territory.

Karl Toriola, Chief Executive Officer of MTN Nigeria, said, “This additional spectrum will empower us to uphold our commitment to delivering high-quality services to our valued customers while actively supporting the Federal Government’s agenda to expand broadband access nationwide.”

This valuable spectrum allocation was acquired from OpenSkys Services Limited, a reputable indigenous Nigerian telecommunications company licensed by the Nigerian Communications Commission (NCC) to provide telecommunication services on the 450MHz frequency band.

The 2.6GHz spectrum band is designated for the deployment of terrestrial mobile broadband services.

According to a report by the GSMA, this spectrum band serves as an ideal complement to the 700MHz-800MHz spectrum bands, forming a formidable combination capable of delivering cost-effective nationwide mobile broadband coverage, encompassing both rural and urban areas.

As of December 2022, broadband penetration in Nigeria stood at 47.36 percent. The Federal Government of Nigeria has set a target of achieving 70 percent broadband penetration by 2025. MTN Nigeria’s acquisition of this broadband spectrum allocation is poised to equip the ICT giant with the capabilities required to offer enhanced broadband services to meet the surging demand for widespread and uniform mobile broadband services nationwide.

In the words of Karl Toriola, “This additional spectrum will empower us to uphold our commitment to delivering high-quality services to our valued customers while actively supporting the Federal Government’s agenda to expand broadband access nationwide.”

MTN believes that the integration of this spectrum allocation will lead to a significant enhancement in the customer experience, aligning perfectly with their dedication to delivering exceptional services.

Also, this acquired spectrum will equip the telecommunications operator with the tools needed to deploy advanced broadband technologies, thereby contributing to the realization of Nigeria’s broadband objectives.

A report by the GSMA underscores the pivotal role of broadband penetration, particularly in developing countries, in driving an increase in Gross Domestic Product (GDP). This highlights the urgent need for continuous development and investment in broadband infrastructure, exemplified by the inclusion of the 2.6GHz spectrum band.

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