The amount totaling N180 billion had generated a lot of controversies as the telcos accused these banks of deliberately withholding the same sum.

However, Techeconomy can report that 13 banks have now cleared N171 billion out of the N180 billion they collectively owned telcos, representing 95 per cent of the total debt.

With the resolution of the long-standing dispute, telecom operators have now fully commenced the implementation of End-User Billing (EUB), which shifts USSD service charges directly to users’ airtime balances instead of bank accounts.

According to the telcos, 13 out of 16 banks with outstanding debts have now fully paid, while three others are completing their final installment payments; only one of the original 18 banks was not involved in the pre-Application Programming Interface (API) debt, and another, was declared insolvent.

This was confirmed by Engineer Gbenga Adebayo, chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), who said,

“We have recovered about 95 per cent of the outstanding debt,” noting that this significant repayment has paved the way for the full rollout of end-user billing.

Speaking during a webinar stakeholders’ meeting, titled: “Ask the Exec: USSD end-user billing”, Adebayo said that under the new regime, customers will no longer be billed through their bank accounts for USSD transactions, adding that the N6.98 per 120 seconds charge will now be deducted directly from users’ airtime balances, ushering in a more transparent and standardised billing system.

The transition comes on the heels of long-standing tension between banks and telcos over unpaid USSD service debts.

As of January, banks were owing telecom operators N180 billion, primarily accrued before the introduction of a standardised API that gave banks better control over their USSD platforms.

Under the new End-user Billing model, telcos no longer rely on the banks for customer billing. Instead, when a customer initiates a USSD transaction, a consent message will appear informing them of the airtime deduction.

Upon approval, the telco verifies the bank’s availability through a USSD aggregator before establishing the connection and applying the charge.

This process ensures users are only billed for successful and verifiable service access.

“We are just the transport medium. Think of it as taking a taxi to the bank. The driver doesn’t know what happens inside the bank, their job is to get you there safely,” Adebayo explained.

To enhance user experience and transparency, error messages have now been unified across all telecom operators, providing consistent updates on whether a failed transaction was caused by the bank, telco, or other intermediaries.

While all root USSD codes will now attract charges, Adebayo clarified that direct strings for airtime and data purchases have been zero-rated. This means customers who use these long-form codes will not incur any deductions from their airtime for such transactions, he affirmed.

“We will be communicating with customers to encourage the use of direct strings for airtime and data purchases, which remain completely free of charge,” Adebayo noted.

While migration to end-user billing is ongoing, Adebayo confirmed that banks still have the option to remain on corporate billing, provided they meet their financial obligations and maintain consistent payments.

“We are not shutting anyone out. But any institution that chooses to stay with corporate billing must clear their debts and commit to timely settlements,” Adebayo clarified.

As to whether this EUB will further add financial burden on Nigerians, Lynda Saint-Nwafor, chief enterprise business officer, MTN Nigeria, said, “The customers were already paying for this. The only difference now is that rather than deduct it from your bank account, it will be deducted from your airtime,” stressing that the shift does not increase costs for consumers.

Take MTN Nigeria’s latest report, it shows the bruising realities faced by businesses in the country today.

Take a look at the numbers. MTN Nigeria generated a staggering ₦3. 36 trillion in revenue in the year ended December 31, 2024, up 36.03 per cent from N2.47 trillion in 2023.

Yet, it is regarded as a bad year, because it reported a loss of N400.4 billion after tax for the financial year. This was due to a net foreign exchange loss of N925.36 billion from ₦740.43 billion in 2023.

MTN Nigeria Reports ₦400.44Bn Loss in 2024 Despite ₦3.36Trillion Revenue

The upshot is that this financial turmoil shaved 24. 2 per cent off MTN Nigeria’s market capitalisation, dragged down its share price to ₦200, and sent shareholders into shock. I know, I’m a small-time shareholder and it hurts.

The sad news is that in response, the company has decided not to declare a final dividend for the year which begs the question: Should MTN Nigeria pay dividends despite its losses?

If we take a step back, we can see that doing business in Nigeria has been extremely challenging over the last three to four years.

The country’s continued economic instability, with inflation rates of over 30 per cent, devaluation of the currency and erratic foreign exchange policies, has put tremendous pressure on companies.

For MTN Nigeria, which has substantial dollar-denominated obligations, these economic headwinds have eroded capital at an unprecedented pace.

But this is not just an MTN Nigeria problem, it is a telecoms industry-wide problem. The entire industry is facing rising costs of doing business. Diesel to power base stations has become very expensive.

Infrastructure costs remain high, and tower lease agreements are highly sensitive to forex movements. Regulatory uncertainties, including unresolved issues such as the USSD debt dispute with Nigerian banks, continue to dampen financial performance. And of course, there are the perennial issues around the right of way and multiple taxation.

Sources at the company said that, in light of these harsh realities, the board of MTN Nigeria decided against paying a final dividend for the 2024 financial year.

This decision, while understandable, will be a tough pill for investors to swallow, given that dividends are a form of return on investment, and investors rely on them.

The reality is that dividend payments are a key factor in investor confidence. By not paying out dividends, MTN Nigeria risks alienating shareholders and stifling the enthusiasm in the stock market. Experts believe that this decision may have played a role in the company’s share price drop.

However, paying out dividends when losses are being recorded would raise governance issues. Critics say paying out dividends when the company is in the red would erode its balance sheet and reduce its liquidity for expanding its business and regaining profitability.

But there is a compelling counterargument to be made. MTN Nigeria’s operating profit of ₦778. 24 billion was still up by 0. 6 per cent from 2023.

This confirms the strength of its core business in the face of external financial pressures. A modest dividend payout, perhaps at a lower percentage, would be a reassuring signal to investors without compromising long-term viability.

The firm’s focus on network expansion and digital services (including its MoMo Payment Service Bank) is well-placed to underpin future growth. Yet the company should push hard for more local currency-denominated contracts to reduce forex exposure. Its renegotiation with IHS Towers to cut dollar-based lease payments is a good example. The deal with ATC is naira-based.

In addition, the government needs to take urgent steps to stabilise the exchange rate and tackle inflation as businesses cannot operate in an environment of such economic uncertainty.

Clearer regulation and policy consistency are also needed, so companies like MTN Nigeria can build long-term growth plans and not be surprised by sudden policy changes.

The bottom line is that MTN Nigeria’s financial woes are indicative of the broader economic challenges affecting businesses in Nigeria.

The decision to freeze dividends is a sound one in the short term, but the company will need to tread carefully to balance financial recovery with retaining investor confidence.

A well-thought-out dividend policy, combined with aggressive cost-cutting and revenue diversification efforts, will be critical in weathering this storm.

In the end, Nigeria’s business environment needs urgent structural reforms. Without them, even the most resilient corporations will continue to struggle, and shareholders will bear the brunt of the losses. 

*Eromosele, a corporate communication professional and public affairs analyst, wrote via elviseroms@gmail.com

Recall, the Nigerian Communications Commission had granted permission to telecommunications companies to disconnect the USSD codes assigned to nine financial institutions due to unpaid debts in the sum over N160 billion.

According to the directive in a public notice signed by Reuben Muoka, NCC’s director of Public Affairs, the affected banks were expected to settle their outstanding obligations by January 27, 2025, or risk losing access to their USSD codes.

The banks, which were at risk of disconnection due to a N160bn debt, have made substantial progress in clearing their liabilities, ensuring continued access to the USSD platform—vital for customers without internet access.

These codes, essential for enabling mobile banking services, could be reassigned to other applicants if the debts remain unresolved.

Engineer Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria, confirmed at a Telecoms CEO forum in Lagos that the matter had been de-escalated.

In his words: “The matter has been de-escalated. Money has been paid, and we are making progress thanks to the regulators,” he said.

The nine banks that would have been affected by the NCC’s disconnection notice include Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.

The dispute began in 2019 when banks started incurring charges for using USSD services provided by telecom companies. However, many banks struggled to settle the charges, causing the debt to accumulate.

According to the directive in a Tuesday public notice signed by Reuben Muoka, NCC’s director of Public Affairs, the affected banks must settle their outstanding obligations by January 27, 2025, or risk losing access to their USSD codes.

These codes, essential for enabling mobile banking services, could be reassigned to other applicants if the debts remain unresolved.

The commission revealed that, as of Tuesday’s close of business, nine out of 18 financial institutions had not complied with regulatory directives.

While other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.

However, the regulator did not disclose the precise debt currently owed by the affected banks.

According to the NCC, some of the unpaid invoices have remained unpaid since 2020, indicating a prolonged financial dispute between the banks and telecom operators.

Part of the notice read,

“By the information made available to the commission as at close of business on Tuesday, 14th January 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the Second Joint Circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020.”

The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.

It added,

“In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”

The affected financial institutions include;

1. Fidelity Bank Plc,
2. First City Monument Bank (FCMB),
3. Jaiz Bank Plc,
4. Polaris Bank Limited,
5. Sterling Bank Limited,
6. United Bank for Africa Plc,
7. Unity Bank Plc,
8. Wema Bank Plc, and
9. Zenith Bank Plc.

The affected USSD codes include 770, 919, and 822, among others.

The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.

This development highlights ongoing tensions between telecommunications companies and financial institutions over unpaid USSD-related debts, a challenge that has persisted for years.

Meanwhile, data from the CBN revealed that 252.06 million transactions worth N2.19 trillion were conducted via USSD between January and June 2024.

This represents a significant growth compared to 2023 when 630.6 million transactions valued at N4.84tn were completed using USSD codes.

Originally designed by telecom operators for services like airtime purchases and subscriptions, USSD has become a key tool in the banking sector, offering financial services to users without requiring an Internet connection.

Available date shows this was an 88 per cent increase from the N126 trillion reported in the first quarter of 2023.

Data analysis  revealed that electronic payment channels were used 3.09 billion times in the first three months, a 6.2 percent increase from the 2.91 billion times they were used in the corresponding period of 2023.

The NIBSS records cashless transactions from the Nigeria Instant Payment System and Point of Sales terminals.

The total value of instant payment in the first three months was N234.5 trillion, and PoS was N2.6 trillion. In 2023, cashless transactions in Nigeria increased to N611.06 trillion.

Although Cashless transaction  also  grew to N611.06 trillion from N395.38trn as of the end of 2022 indicating a 54.55 per cent year-on-year growth.

Analysis of the data showed that electronic payment channels were used 11.05 billion times in 2023, a 75.96 per cent increase from the 6.28 billion times they were used in 2022 while the total value of instant payment in 2023 was N600.36 trillion and Point of Sales transactions was N10.7 trillion and relied upon for 1.38 billion times.

According to NIBSS, over the years, Nigerian banks have exposed NIP through their various channels, that is, internet banking, bank branches, Kiosks, mobile apps, Unstructured Supplementary Service Data, POS, ATM, etc. to their customers.

The NIBSS Instant Payments is an account-number-based, online real-time Inter-Bank payment solution developed in the year 2011 by NIBSS.

It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary.

Meanwhile, the Association of Telecommunications Operators of Nigeria (ALTON), has urged banks to prioritize the payment of their unstructured supplementary service data (USSD) debt.

Gbenga Adebayo, the  chairman of Alton, said during the first telecoms stakeholders’ meeting with Aminu Maida the executive vice chairman (EVC) of the Nigerian Communication Commission (NCC), in Lagos.

According  to Adebayo, the debts owned by banks had increased to N200 billion, he noted that there have talks on the issue, no considerable action was taken on the parts of the banks.

Adebayo,  said the  debt must be paid in total, nothing that telcos would not hesitate to  block debtors from accessing the  service anytime.

There is no gainsaying the fact that  the unstructured supplementary service data (USSD) and Telcos play critical roles in facilitating transactions.

Mobile telecom companies in Nigeria, including MTN, Glo, Airtel, and 9mobile, had last  year received approval from the Nigerian Communications Commission (NCC) to disconnect Deposit Money Banks (DMBs) in the country.

The approval was granted due to the banks’ failure to pay debts peg at N120 billion for Unstructured Supplementary Service Data (USSD) services.

The telcos on Thursday accused banks of not able to pay-up for services rendered under the Unstructured Supplementary Service Data (USSD) as the debt has increased to N80 billion from N42 billion reported last year.

This is even as they alleged that the banks are not cooperating in paying the debt despite interventions from the government.

Gbenga Adebayo, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), hinted on this on Thursday at the ICT Growth Conference organized by the Nigeria Information Technology Reporters Association (NITRA).

He said the operators are uncomfortable with the attitude of the banks towards settling the debts, adding that ALTON members are already considering disconnecting some of the banks from the networks.

Adebayo said: “The banks would want us to be silent about the USSD debt, but it is not going away until they pay. At the last count, the debt is now N80 billion.

“Some banks are responding while others are not. We are nearing that time when  we have no choice but to discontinue the provisions of services  to banks.”

“I think it is dishonorable that our colleagues in that sector know that they have an obligation to service providers and are shying away from it.

“Banks remove charges from their customers but refuse to pay telecom operators. You don’t expect us to keep rendering services when you don’t pay.

“The irony of it is that if it was the other way round you can’t owe the bank a cent,” he added.

Recall that, the telecommunication operators made similar threats in 2021 to withdraw USSD services to Financial Service Providers FSPs over their inability to pay N42billion debt they owe the telecommunication service companies.

READ Further here:

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) then introduced new charges for customers using the USSD.

A joint statement issued by the Financial and Telecommunications regulators led to customer paying a flat fee of N6.98 per transaction every time they use USSD services.

The charges were part of the agreements after banks and telecommunication operators met on Monday to discuss the N42bn debt owed mobile operators by banks.

See details here: