If the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) fail to address the unsustainable debt of about N250 billion owed mobile network operators (MNOs) as a result of the use of the Unstructured Supplementary Service Data (USSD), the operators might, subject to regulatory approval, suspend supporting the use of the service on the network for banking operations.
USSD is a Global System for Mobile Communications (GSM) protocol that is used to send text messages. It is used for initiating financial transactions such as cash transfer, balance inquiry, payment for services and others.
Fielding questions yesterday from Fellows of the Media Innovation Programme (MIP) sponsored by MTN Nigeria and in partnership with Pan Atlantic University, Ibeju-Lekki, Lagos, who were on inspection of MTN’s key facilities in the city, CEO of MTN, Karl Toriola, said the debt has continued to pile up and is becoming unsustainable to the operators.
Toriola who expressed optimism that the new CBN governor, Yemi Cardoso and the Executive Vice Chairman, NCC, Dr Aminu Maida would resolve the impasse very soon, said if it is not resolved, the operators would be compelled to seek regulatory approval to discontinue allowing commercial banks to run transactions on the platform.
Toriola warned of the dire consequences of government’s refusal to accede to telcos’ demands for tariff adjustment to reflect the realities of the economy, saying the telecom sector is lying critically ill at the intensive care unit (ICU) and may just die if the appropriate therapy is not applied to it.
“MTN and the entire industry are in a dire situation. MTN is loss making because of naira devaluation. The fundamentals need to change. Tariffs have to be changed,” he said, adding that inflation has continued to go up, affecting the prices of commodities, including foodstuffs and services.
He said the complete deregulation of the downstream oil sector has seen the pump price of petrol rise to over N1000 in the country. Similarly, electricity tariff has kissed the skies with the removal of electricity subsidy and the grouping of customers into bands by the power distribution companies (DisCos).
“There should be no delusion, if the tariff doesn’t go up we will shut down,” he warned.
The base transceiver stations (BTS) of the MNOs are powered by diesel and gas in the absence of dependable power supply from the national grid which has been suffering from epilepsy.
Toriola said the company used to be one of the highest payers of corporate income tax to the Federal Inland Revenue Service (FIRS), adding however that it has gone down to zero since the company has stopped making profit.
The MTN CEO said the company has been surviving because it is spending its savings, saying the industry is living on borrowed times. “We must return the industry to profitability,” he said.
He said despite the challenges the industry is facing now, it has transformed the country as it has been enabler to other sectors. Toriola warned that the industry should not be allowed to toe the ignoble path of NITEL.
He said the Global System for Mobile Communications Association (GSMA), a non-profit industry organisation that represents the interests of MNOs globally and hardly speaks to tariff issues, has called for tariff adjustment for sustainability.
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