BY CHIMA AKWAJA, Lagos
Millions of customers who are subscribers of MTN Nigeria have in the last two days been at the receiving end of a dispute between the telecommunications giant, Value Added Service (VAS) aggregators and banks over commission fee.
This has led to a restriction of the unstructured supplementary service data (USSD) channels services offered by the aggregators to bank customers.
Aggregators (middlemen) are entities that provide a single platform through which VAS providers may access the services of network operators. VAS involves the provision of value added mobile/fixed services including premium rates services which are centered on entertainment, marketing, advertising, and commerce.
Examples of these services include airtime, text messages, picture messages, ring tones, graphics, games, multimedia, call center and call directory. There are about 233 companies licenced by the NCC to act as VAS aggregators in the telecommunications industry.
The Nigerian VAS market is estimated by the NCC to be currently worth $200 million and should be valued at $500 million in the next five years.
The VAS charges range between N10, N20, N50 and N100 depending on the service. For instance, airtime is sold at highly discounted rates to VAS Aggregators who share the revenue with the telcos.
Generally, revenue used to be shared between the telecom operators and VAS aggregators at between 60 per cent and 40 per cent. MTN, Airtel, Glo and 9mobile have separate VAS sharing ratio with the aggregators between 70 per cent and 30 per cent.
The USSD channels are short codes used by phone users to enable certain services such as mobile banking, games, ringtone and songs purchases, etc.
MTN customers can no longer purchase airtime from their bank accounts thus creating a dislocation in the value chain and causing inflation in airtime pricing as people now resort to purchase of paper airtime from shops and roadside vendors.
A telecom operator said the overnight suspension of airtime sales by some of the banks is not restricted to USSD channels alone, but includes airtime purchases through all banking channels – bank apps, bank USSD codes, even debit cards.
Bank customers’ efforts to purchase airtime from their MTN lines are now met with this message: “Dear customer, this service is temporarily unavailable. Kindly contact your telecom service provider.”
Industry sources disclosed that MTN had on Thursday March 31, 2021 reduced the commission accruable to the aggregators and banks from 3.5 per cent to 2.5 per cent.
The sudden change in commission and the urgency of the implementation did not go down well with the aggregators and banks. Efforts to make MTN come to middle ground failed, thus, the restriction of airtime sales from banks to MTN subscribers.
Today, bank accounts holders registered on MTN network can no longer purchase airtime from the account. An MTN subscriber, Calistus Nzenwa, caught in the crossfire between the warring parties said, “Unfortunately, it is happening while the country is on public holidays for the Easter festivities. This has caused a rise in the cost of paper recharge cards from N100 to N110, N200 to N210 and N500 to N520 depending on the location and vendors.”
An official of MTN who pleaded anonymity said that the telecom operator is coming out with alternative means where people can make their airtime purchases.
“In developed societies, what they get is between 0.5 per cent and 0.75 per cent but we are offering them 2.5 per cent. We own the infrastructure they are riding on. We are not bulging; we are coming out with alternative means for our customers to recharge their lines. People can now use JumiaPay, Flutterwave, MyMTN App, and others which we are going to announce shortly,” the MTN official said.
MTN sticking to its high horse may be viewed as overbearing on its USSD partners and the banks decision to cut off the cash flow from its customers’ bank accounts may as well be quick response but the underlying matter is that the customers are suffering in the fight of the two elephants. Millions of subscribers are in locations where physical vending is kilometres away.
Sources said MTN wants to make Digital Financial Inclusion (DFI), a major revenue earner and is positioning itself as a major player in that segment as average revenue per user (ARPU) keep going down across the telecom sector globally as more phone users make use of WhatsApp Voice, Facebook Messenger and Voice and other apps that bypass the telecom networks to make voice calls and send data and videos.
In a press statement signed by the Senior Manager, External Relations, MTN, Funso Aina, the telco said, ‘‘Please note that as follow-up to your story on the ‘MTN vs Banks’ USSD matter, it will interest you to note that for the benefit of our customers who have been greatly inconvenienced by the service suspension, we now have alternative channels of accessing MTN services electronically.’’
Meanwhile, the president, Association of Telecommunications Companies of Nigeria (ATCON), Engr. Ike Nnamani said the dispute between banks and MTN, “Is being looked into and will be resolved. Recall there was an agreement on the way forward in terms of the future payments and charges. This was signed by the telecom and financial sectors regulators.
But parties were told to go and discuss on the outstanding issue of debts that accumulated for services rendered. There seems to be a disconnect between the parties on how that will be handled. All the same, because these are critical services, we know it will be resolved.”
Against the backdrop of the intervention of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) to resolve the N42 billion unpaid USSD debt recently, customers cannot afford to be caught in the middle of another fight between the banking and the telecom industry.
Therefore, it is instructive that the two regulators reign in the banks and MTN to maintain the status quo. It is also cheering that the Minister of Communications and Digital Economy, Dr. Isa Ali Pantami has started engaging the CBN and NCC to resolve the dispute. (Leadership)
