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How NCC Intervention in Pricing Dispute Gives Telecoms Consumers Hope for Better Deal

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Before the Nigerian Communication Commission [NCC] intervened in the pricing dispute concerning how much the mobile network operators [MNOs] were being charged consumers for the use of the Unstructured Supplementary Service Data (USSD) channels directly for financial services, the consumers had no choice.

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The Commission’s intervention has thus given the telecoms consumers a choice and hope for a better deal.

Old pricing

When the USSD was introduced it was impossible to conduct transactions via on a mobile network without a minimum balance of N12.00k. Subsequently, mobile network subscribers paid N4 for a USSD session directly.

Read USSD:  Banks Owe Telcos N17bn, says Danbatta

USSD economics

Nevertheless, the NCC in its Determination of USSD Pricing on July 23, 2019, signed by the Executive Vice Chairman of the Commission, Prof Umar Garba Danbatta stated that a USSD session lasts for 20 seconds. A session would cost N1.643k. The price cap floor for a 20 seconds USSD session would be N4.89k.

As such, it added that telecoms operators should price at cost plus a margin. This structured was to become effective on September 1, 2019. The order was valid and binding to licensees.

Corporate relationship, not individual

Therefore, in its Determination, the Commission also said the USSD charges should be a corporate undertaking between the banks and telecoms operators. It is not between telecoms providers and telecoms consumers. Thus, the consumers are exempted from being charged by the MNOs.

Read Carbon Launches USSD Service to Enhance Access to Finance

MTN’s announcement

On October 21, MTN announced its intention to start charging its subscribers directly for USSD access to banking services. The company charged N4 for every 20-second session. Each session lasts one minute. This is why a USSD session will terminate once the session is idle for one minute and a user would have to reinitiate the transaction.

USSD, telco-exclusive channel

The USSD channel has evolved over time. It has become a telco-exclusive channel used for only telco services. It is used for balance inquiry and recharges to a channel for the deployment of a broad spectrum of services. These services include financial, insurance, agricultural, government and more.

The use of the USSD channel is a critical resource in the economy. Especially during the Covid-19 pandemic, which has witnessed a rise in reliance on digital services.

New pricing following NCC mediation 

Specifically, with the Commission’s mediation, MTN, Airtel and other MNOs that are offering the USSD were stopped from charging telecoms consumers directly for the use of the USSD channels for financial services.

Intervention by the Minister of Communication 

Following MTN’s announcement, the Minister of Communications, Dr Isa Pantami in a press statement ordered the NCC to investigate the N4 charge by MTN for the USSD.

 NCC Determination

However, with its ruling, the Commission has revised its earlier Determination on the applicable USSD charges and the method of billing. A copy of the Determination is available on the NCC’s website, www.ncc.gov.ng.

The recent review has removed the previous cap and floor prices – N1.63k and N4.89k per 20 seconds for USSD session. It is pegged at N1.63k. The NCC and concerned parties are to deliberate on this new pricing regime.

In the interest of the telecoms consumers

The Commission’s revised Determination, according to Prof. Umar Garba Danbatta was carried out to protect the interests of telecoms consumers and support a robust telecommunications sector.