The Nigerian Communications Commission (NCC), the sole regulator of the Nigerian telecommunications sector, has one of its mandates to promote development of digital economy in the country. It does this by providing the necessary regulations and initiatives for the achievement of digital economy policy thrust of the federal government.
The digital economy itself represents a wide range of economic activities that use digitised information and knowledge as key factors of production. The digitiation of the economy creates benefits and efficiencies as digital technologies drive entrepreneurship, innovation and fuel job opportunities and economic growth.
The telecommunications sector has become the infrastructure of infrastructures driving the Nigerian economy. Its impacts can be felt across all the sectors of the economy. In the financial services industry, the deposit money banks ride on telecom infrastructure from licenced telecom companies for their 24-hours automated teller machines (ATMs), Unstructured Supplementary Service Data (USSD), Wireless Access Providers depend on it for Value Added Services (VAS).
The efforts of the Commission in driving the growth and development of the digital economy have helped Nigeria financial technology (Fintechs), Startups and banks attract global attention and investment inflows through creating enabling environment, provision of available, accessible and affordable high- capacity broadband through licenced telecommunications companies across the country.
The Nigerian digital economy propelled by the telecommunications sector has led to exponential growths in e-commerce, e-banking, e-learning and virtual meetings has made the private and public sectors to shift towards the digital space driven recently by the impact of the global coronavirus pandemic. So much data is being utilized by companies as they move to the digital era.
The executive Vice Chairman of NCC, Prof Danbatta said the information and communications industry is witnessing new business delivery and breakthroughs due to the expansion of boundaries of digital Small and Medium Enterprises (SMEs), especially fintech, e-commerce firms and banks contributing to the growth of the Nigerian digital economy riding on telecom infrastructure.
Danbatta aptly reckoned that digital services and contents provided by these players will leverage on broadband infrastructure and the upcoming deployment of 5G network being driven by the Commission’s licencees to deliver more innovative and high-quality experiences to consumers.
In the Nigerian banking sector, the infrastructure of mobile network operators and infrastructure companies (InfraCos) has propelled the growth of mobile money and mobile banking in the country through Unstructured Supplementary Service Data (USSD).
However, in recent times there has been dispute between the Deposit Money Banks (DMBs) and the Mobile network operators (MNOs) over payment for the use of the telecommunications infrastructure service used in conducting USSD transactions by customers.
Recall that MNOs and DMBs have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection and liability for payment of the outstanding and continuous service fees due to the MNOs (which currently stands at over N120 billion).
The chairman, Association of Licenced TelecommunicationsOperators of Nigeria (ALTON), Engr. Gbenga Adebayo, disclosed in media reports that its members have been given approval to disconnect Deposit Money Banks if they fail to pay the debt owed to Operators for USSD services which has amounted to over N120 billion.
The approval was granted because despite multiparty stakeholder efforts to resolve the situation and prevent any impact on services, led by the immediate past minister of Communication and Digital Economy, Prof. Isa Ali Ibrahim (Pantami). The DMBs have continued to incur greater and greater debt, without making the commensurate payments, the chairman, ALTON, Engr. Gbenga Adebayo, disclosed.
Adebayo lamented that every time some progress is made, the DMBs come up with reasons to take stakeholders several steps back, in this matter, adding that, „Due to the inability of MNOs and DMBs to reach an agreement on the issues, MNOs in 2021 sought to disconnect DMBs due to the unpaid debts which stood at N42 billion as at that time. However, the Hon. Minister of Communication and Digital Economy, Prof. Isa Ali ibrahim (Pantami) intervened and asked the MNOs not to disconnect DMBs as the action will negatively impact on the Digital and Financial Inclusion policy of the Federal Government.”
The chairman recalled that the NCC, ALTON, Association of Telecommunications Companies of Nigeria (ATCON) and DMB represented by the chairman, Body of Bank CEOs subsequently met on 15 March 2021 to discuss indebtedness of DMBs to MNOs for USSD services, adding that further to the meeting, CBN and NCC issued a joint press statement on the agreement reached by all stakeholders.
Adebayo disclosed that the honourable minister of Communications and Digital Economy and NCC have made several efforts to get the banks to show good faith and sign an agreement, in the national interest, based on the resolutions reached at that meeting, but unfortunately, the patriotic intervention of the Hon. Minister and the NCC have been taken for granted by the DMBs, as two years after, the banks have failed to sign a final agreement.
„It is pertinent to note that the contract between MNOs and DMBs on the use of USSDs for banking transactions is strictly commercial and MNOs are at liberty to withdraw the services if it is established that the transaction is unprofitable to them. MNOs have invested billions of naira in expanding their systems to accommodate the USSD needs of DMBs over the years.
„This has resulted in more Nigerians having access to banking services in addition to enabling banks to trim down costs by requiring less branches to service their growing customers. Unfortunately, MNOs are not getting paid for their services and the debt that stood at N42 billion in 2021 has now risen to over N120 billion.
„It is obvious that the level of debt is unsustainable given the time/value huge cost of the continuous upgrade and operation of the systems and infrastructure dedicated to supporting USSD transactions of DMBs. In view of the foregoing, unless DBMs meet their debt obligations, MNOs will disconnect all banks indebted to them for USSD services rendered,“ the chairman averred.
It on the above background that for success to be achieved in the growth and development of Nigeria’s digital economy, all stakeholders must play their part and discharge their responsibilities creditably well. The Nigerian MNOs are private concerns that have invested over $100 billion in the telecommunications in the past 22 years to build a virile and solid telecommunication network which has become the infrastructure of infrastructures on which banking services and many others are riding.
A strictly commercial business should be seen as such and respected so that parties involved can continue to play their roles effectively and efficiently in growing Nigeria’s digital economy.
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