Telcos defend N6.98 USSD charge despite failed transactions

By Juliet Umeh

Telecommunications operators under the aegis of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, have defended the N6.98 Unstructured Supplementary Service Data, USSD, fee charged on banking transactions, insisting that the cost reflects the service provided by network operators, regardless of whether the transaction is completed.

ALTON Chairman, Engr. Gbenga Adebayo, made the clarification during a radio programme, where he addressed growing consumer complaints over what many Nigerians have described as “unfair billing” and the alleged “scam” of data expiration.

Adebayo likened the role of telecommunications companies in USSD transactions to that of a transport service provider facilitating access to banks’ digital platforms.

He said: “The phone company is like a taxi taking you to the bank’s digital office. Even if the bank’s system is down when you get there, you still have to pay the taxi man.

“Every USSD request initiated by a subscriber utilises network resources, irrespective of the outcome of the transaction on the bank’s end.

“When customers make repeated attempts due to failed transactions, telecom operators still provide connectivity for each attempt, thereby incurring operational costs,” he explained.

On the lingering dispute between telecom operators and banks over failed USSD transactions, Adebayo disclosed, “that regulators, including the Nigerian Communications Commission, NCC, and the Central Bank of Nigeria, CBN, are currently reviewing data to determine responsibility for transaction failures.

“Each time you dial a USSD code, the telco provides the access. If the bank does not complete the transaction, it does not negate the fact that the network has already been used,” he added.

The ALTON Chairman also addressed widespread dissatisfaction over data expiration, clarifying that data bundles are sold within defined validity periods and are not designed for indefinite use.

“You can’t carry it in perpetuity, but you have the benefit of extending it without losing unused portions by just resubscribing,” he said.

He explained that subscribers can retain unused data through rollover options, provided they renew their subscriptions before the expiration of the current bundle.

Adebayo further shed light on the concept of toll-free lines, noting that such services are not entirely free but are funded by the receiving organisation.

“There is nothing like free service. These are reverse charge lines where the business or government pays for the calls,” he explained, adding that economic realities have made many organisations reluctant to sustain such costs.

He noted that this has contributed to the limited availability of toll-free services in Nigeria.

While acknowledging consumer frustrations, Adebayo stressed the need for greater public understanding of how telecom services operate, particularly the cost implications of maintaining network infrastructure.

He also pointed out that regulatory penalties imposed on operators for service lapses do not address fundamental challenges such as power shortages and infrastructure vandalism.

“For quality of service to improve, there must be collective responsibility in protecting telecom infrastructure and a better understanding of the business models that sustain connectivity,” he said.

The clarification comes amid rising public scrutiny of telecom billing practices, with many subscribers calling for more transparency and consumer-friendly policies in Nigeria’s telecommunications sector.