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Banks Wriggle to Avoid Payment of N43Bn Owed Telcos

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The dispute over the N42 billion owed telecommunications operators in the country by money deposit banks took a new dimension at the weekend as the banks claimed they are not indebted to the telcos for using Unstructured Supplementary Service Data (USSD) platforms to provide payment services.

Banks Wriggle to Avoid Payment of N43Bn Owed Telcos

Banks collect the money for the service on behalf of the telcos, which are the owners of the infrastructure.

Telcos believe the banks are bent on bullying them to maximize their revenues while the banks on the other hand say there is no such thing as an obligation due to the operators.

Investigations showed that the telcos never stopped the service despite mounting debt, but the minute the banks went into a dispute with telcos on commission payment, the banks pulled the plug with total disregard for customers.

Context

The telcos and banks were in March caught in a web of claims and counter charges as the telcos under the aegis of Association of Licensed Telecommunications Operators of Nigeria (ALTON) demanded N42 billion the banks owed them.

ALTON threatened to withdraw USSD services to financial service providers due to huge indebtedness to telecom network operators.

The telcos explained that the service withdrawal had become necessary due to the lack of agreement on a payment structure with the banks that did not involve the end-user being asked to pay.

Intervention

As the dispute lingered, the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) waded in and issued a joint statement on the March, 16, 2021.

The statement signed by Osita Nwanisobi, head, Corporate Communications, CBN and Dr. Ikechukwu Adinde, director, Public Affairs, NCC, read:

Joint Statement by Central Bank of Nigeria & Nigerian Communications Commission on Pricing of Unstructured Supplementary Service Data (USSD) Services

Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions. This resulted in the accumulation of outstanding fees for USSD services rendered leading to threat of service withdrawal by the MNOs.

USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded. To resolve the lingering dispute and ensure uninterrupted services to customers on this channel, the Honourable Minister for Communications and Digital Economy on March 15, 2021 chaired a meeting of key stakeholders to discuss an amicable resolution in the interest of the general public.

Represented at the meeting were the various MNOs, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON), DMBs (represented by the Chairman, Body of Bank CEOs) and the sector regulators – Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC).

We are pleased to announce that after comprehensive deliberations on the key issues, a resolution framework acceptable to all parties was agreed thus:

  1. Effective March 16, 2021, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions will be charged at a flat fee of N6.98k per transaction. This replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion. This approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.
  2. To promote transparency in its administration, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. Banks shall not impose additional charges on customers for use of the USSD channel.
  3. A settlement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.
  4. MNOs and DMBs shall discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (APIs) to enable seamless, direct and transparent customer billing.
  5. DMBs and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services.
  6. With the above resolutions, the impending suspension of DMBs from the USSD channel is hereby vacated. Therefore, DMBs shall no longer be disconnected from the USSD channel.

The general public is reminded that the USSD channel is optional, as several alternative channels such as mobile apps, internet banking and ATMs may be used for financial transactions.

The CBN and NCC shall continue to engage relevant operators and stakeholders to promote cheaper, seamless access to mobile and financial services for all Nigerians.

Twist

But at the weekend, Nigerian banks claimed they are not indebted to the telcos for using the Unstructured Supplementary Service Data shortcode service to provide payment services.

“There is no such thing as an obligation due from banks to telcos,” Herbert Wigwe, chief executive officer of Access Bank Plc, said on an investor call in Lagos, according to Bloomberg.

“We chose not to make a public statement out of it because it is not appropriate for us to be found fighting with telcos in public,” he said Thursday.

Wigwe is the head of a team of bank CEOs that has been in discussion with MTN Nigeria to resolve a dispute that led some banks to cut off the company from their banking platforms last week.

Implications

The banks’ reluctance to pay the N42billion debt has far reaching effects on both the telcos and subscribers.

Already, the telcos have lost some ₦30 billion as a result of inactive SIM cards occasioned by the NIN-SIM registration.

And according to figures by the NCC, telecom subscribers in the country dropped by 11.84 million in four months.

The unpredictable nature of business in Nigeria is the reason why the telecommunication sector is struggling to attract new investments’.

From the monetary authorities playing god with foreign exchange to multiple taxes to epileptic power supply, the industry is swimming in challenges.

In trying to control both the demand and supply of dollars, the CBN plays god in forex market, and scares off investors. Telcos rely on forex to import equipment for expansion.

Telcos are still seen as cash cows and are subjected to all kinds of taxes, leveis and fees by all tiers of governments.

Because of Nigeria’s notorious unreliable power supply, operators are forced to provide their own electricity to power their facilities.

For now, telcos in Nigeria are clutching expensive bags of operating expenses and subscribers are bearing the burden.

Unfair Practices

The banks intended to hurt the telcos by pulling the plug on the USSD service but ended up hurting customers to secure their profit.

The silence of Federal Competition and Consumer Protection Commission (FCCPC) is worrying.

The action the banks took is collusion of the highest order and goes to the root of competition and anti-trust.

And it is worrying that ministry of Communications and Digital Economy, the NCC and CBN have not spoken out against the lingering settlement that further impoverishes consumers.


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Rewane, Financial Expert Backs Telcos’ Move to Hike Tariff

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Bismarck Rewane, managing director/chief executive officer, Financial Derivatives Company Limited has backed telecommunication companies’ move to increase tariffs.

Rewane, Financial Expert Backs Telcos’ Move to Hike Tariff

Recall that telecom companies recently reiterated calls for an increase in prices of calls, data, and other services.

They argue that current prices are insufficient to maintain their business operations.

This request is contained in a communique signed by the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON).

The telecom providers are advocating for cost-reflective tariffs, claiming that adverse economic headwinds are threatening their financial viability.

The operators stated that its general service pricing framework has not been reviewed upward in the last 11 years because of regulatory constraints.

“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” the telcos said.

The telcos called on the government to facilitate a constructive dialogue with its industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with their financial viability.

This push for higher prices coincides with MTN Nigeria reporting a loss due to foreign exchange losses in 2023 and Airtel experiencing declining profits amid an economic downturn in the country.

While the development has triggered a backlash in some quarters, Rewane said telco pricing needs to reflect current realities.

He was a guest on weekend’s edition of Channels Television’s Politics Today

 

 

 

 


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Africa Data Centres Unveils ADC Channel Programme

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Africa Data Centres, a division of the Cassava Technologies group, is excited to announce the launch of its exclusive channel partner programme, ADC Channel.

Africa Data Centres Unveils ADC Channel Programme

This programme is designed to establish colocation and ecosystem partnerships, empowering members to expand their product portfolio & offerings alongside their market presence including an expanded data centre footprint.

ADC Channel presents a unique opportunity for global carriers, Internet Service Providers (ISPs), system integrators, Data Centres, Mobile Network, Content Developer, telecommunications companies, network infrastructure operators, hyperscalers and others to deliver state-of-the-art, sustainable and cost-effective digital solutions to their clients.

The primary objective of ADC Channel is to foster collaboration amongst partners, facilitating the delivery of optimised solutions and comprehensive support to clients. Partners enrolled in ADC Channel will benefit from a flexible approach that accommodates various partnership and go-to-market (GTM) models.

Finhai Munzara, CFO of Africa Data Centres, emphasises that the benefits of the ADC Channel programme extend to all types of partners.

“Our facilities are designed with the needs of hyper-scale, wholesale & enterprise clients in mind, catering to their technical, operational and commercial requirements. Whether it’s greenfield projects, built-to-suit facilities, powered shells, dedicated halls, or hybrid colocation, we offer flexible, scalable and sustainable solutions that suit partners of every kind.

He elaborates on the advantages of becoming an Africa Data Centres Partner.

Firstly, clients gain an additional product offering & footprint to augment their existing portfolio, enabling them to offer bundled solutions. This not only enhances their current revenue streams but also positions them for further growth & retention with both existing and future customers.

Africa Data Centres has also developed ADC Marketplace, a pioneering platform designed to empower partners and customers across the continent.

This innovative marketplace provides a dynamic space for partners to showcase their services and for customers to explore offerings, fostering collaboration and visibility within the African tech community. Offering unmatched connectivity and growth opportunities, the ADC Marketplace stands as the ultimate platform for African enterprise organisations and tech companies seeking to thrive in today’s digital landscape.

Partners stand to benefit from reduced churn, as colocation is inherently a ‘sticky’ product with minimal price erosion. By offering best-of-breed colocation services from Africa’s leading data centre provider, partners can differentiate themselves from competitors.

Partners will also enjoy seamless access to data centre experts, continuous commercial and technical support, and regular, complimentary training for their sales and product teams.

Furthermore, partners face no financial risk, as participation in the channel programme requires no investment and entails no capital expenditures for building data centres.

Partners can also leverage flexibility in setting their selling prices and receive significant upfront discounts, further bolstering their competitive advantage. Exclusive benefits include competitive pricing, dedicated sales & Presales Teams, Remote Hands support and access to joint marketing resources & activities, enabling partners to thrive in the marketplace.

Munzara emphasised that ADC Channel programme  epitomises Africa Data Centres’ commitment to fostering collaborative growth and innovation. “It serves as a platform for clients to enrich their product portfolios and seamlessly extend their business across diverse ecosystems with openness and transparency.” Africa Data Centres warmly invites partners to embark on this transformative journey towards shaping the future of digital connectivity in Africa.

“The programme prioritises mutual growth, leveraging Africa Data Centres’ profound industry expertise and extensive infrastructure,” Munzara concluded.

 


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Airtel Hosts Interactive Knowledge Session for Secondary School Girls

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As part of its commitment to empowering and mentoring women to become global leaders while breaking stereotypes and closing gender gaps, the Airtel Women Network, a platform comprising female employees of Airtel Nigeria, welcomed girls from Airtel’s adopted school, Alaba Oro Comprehensive Senior High School, Ajegunle, to commemorate International Day of Girls in ICT on Monday.

Led by the telco’s IT Director, Kemi Ariyo, the session emphasized the need for the rise of influential female role models in driving progress within Science, Technology, Engineering, and Mathematics (STEM) careers. It also served as an avenue to inspire young girls about the vast opportunities within the Information and Communication Technology (ICT) field.

During the session, Ogo Ofomata, Director of Enterprise and Airtel Business and President of the Airtel Women Network, shared insights on the significance of the 2024 commemoration with the students.

“Leadership entails leading yourself to do the things you have to do. With regard to the theme of this year’s International Girls in ICT Day, which is Leadership, our goal is to empower young girls and women to become programmers, coders, designers and to pursue careers in the ICT sector, ultimately becoming leaders in the IT sector,” she said.

The highlight of the event was a thought-provoking session led by Kemi Ariyo, IT Director at Airtel Nigeria, emphasizing the importance of technological knowledge in addressing various global challenges.

In her words, “The world revolves around technology and everything we do today has to do with technology. You can get into that space by adopting hard work, smart work, and an active involvement in internship programs. In addition, just as technology can be used in music and other sectors, learning technology can help you achieve your goals of problem- solving in this digital age.”

Also speaking at the event, Phanindra Nichanametla, Chief Financial Officer, Airtel Nigeria, restated Airtel’s tagline ‘A Reason to Imagine’, reassuring the students of Airtel’s commitment to encouraging positive imagination. “A very important note to take home from this event is that Airtel is here to change your imagination and give you opportunities to imagine more,” he said.

Airtel remains committed to promoting initiatives that promote gender equality and diversity in the workplace. By investing in the education and empowerment of young girls in ICT, Airtel Nigeria continues to pave the way for a more inclusive and prosperous future in the world of technology.


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