The long-standing dispute between telecom companies and financial institutions over the N250bn Unstructured Supplementary Service Data (USSD) debt has finally reached a critical juncture. In a move that underscores the intensifying pressure on telecom operators, the Nigerian Communications Commission (NCC) has authorised the disconnection of USSD services for nine financial institutions, starting January 27, 2025. This decision highlights not only the ongoing financial struggles in Nigeria’s telecom sector but also the strained relationship between two critical industries: banking and telecommunications.
For months, telecom companies have voiced their concerns about the financial strain caused by unsettled debts, compounded by the country’s economic challenges. The telecom industry has been grappling with a multitude of issues, including rampant vandalism, high operational costs such as electricity, fuel, and foreign exchange fluctuations, all of which have made it increasingly difficult for operators to maintain services profitably. The debt from the use of USSD services by banks, which telecom operators claim remains unpaid, is yet another burden that threatens the stability of an already struggling sector.
The figures are stark: between January and June 2024 alone, Nigerians conducted transactions worth N2 trillion through USSD services. Despite the increasing use of banking apps and mobile wallets, the demand for USSD remains significant, particularly for individuals in rural areas or those with limited access to smartphones and data. This underscores the critical role USSD plays in the financial ecosystem, especially for the unbanked and underbanked populations.
The disconnection of USSD services, however, is not a decision taken lightly. The NCC’s directive follows a series of failed attempts to resolve the dispute through negotiations. A directive issued in December 2024 by the NCC, in collaboration with the Central Bank of Nigeria (CBN), mandated banks to settle outstanding debts in order to retain access to USSD services. The banking sector, however, has failed to comply with this directive, leading to the enforcement of disconnection.
It is essential to recognise that while the telecom operators are justified in seeking payment for services rendered, the timing of this decision has significant implications for Nigerian consumers. Many bank customers rely heavily on USSD for essential financial services such as mobile banking transactions, airtime purchases, and bill payments. The disruption of these services could create considerable inconvenience, particularly for those without access to more advanced banking options.
The NCC’s move, while necessary to protect the interests of telecom companies, should prompt both sectors to come together to find a more sustainable solution. A clear payment framework is urgently needed to prevent further escalation. The status quo, where financial institutions continually default on payments for services used, is untenable and disruptive for all parties involved.
Additionally, as the disconnection deadline looms, it is essential for affected banks to heed the call to settle their debts. If left unresolved, these debts could lead to even greater disruptions in the services that millions of Nigerians depend on daily. The affected banks—Fidelity Bank, First City Monument Bank, Jaiz Bank, Polaris Bank, Sterling Bank, United Bank for Africa, Unity Bank, Wema Bank, and Zenith Bank—must take immediate action to meet their obligations and avoid further financial and operational fallout.
On the other hand, it is imperative for telecom operators to recognise the larger picture. While their concerns are valid, any move that impacts consumers—especially those who are least able to bear the burden—could deepen the challenges facing Nigeria’s economy. The solution to the USSD debt issue lies not in punitive measures alone, but in fostering greater collaboration between the banking and telecom sectors.
As we await the deadline for the disconnection of services, it is critical for Nigerian consumers to prepare for potential disruptions by exploring alternative transaction channels. Bank customers should be encouraged to use mobile apps or visit bank branches to ensure that their financial activities are not hindered.
The resolution of this dispute should be a priority for both the NCC and the CBN. A balanced, collaborative approach that ensures both telecom companies and financial institutions are fairly compensated for their services, without unduly affecting consumers, is necessary for the stability and growth of Nigeria’s financial and telecommunications landscapes. Only through dialogue, transparency, and timely action can the trust between these vital sectors be restored and a lasting solution achieved.