Telecom companies justify N6.98 fee for USSD services even when transactions are unsuccessful

The Association of Licensed Telecommunications Operators of Nigeria, ALTON, has come out in defense of the N6.98 Unstructured Supplementary Service Data, USSD, fee that is charged for banking transactions, arguing that this cost is a reflection of the services provided by network operators, regardless of the outcome of the transaction.

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According to ALTON Chairman, Engr. Gbenga Adebayo, the role of telecommunications companies in USSD transactions is similar to that of a transport service provider, facilitating access to banks’ digital platforms, and thus incurring costs that must be paid, even if the transaction is not completed.

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Adebayo made this clarification during a radio programme, where he addressed the growing concerns of consumers who have described the billing as “unfair” and the data expiration as a “scam”, emphasizing that every USSD request utilizes network resources, regardless of the transaction's outcome.

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He explained that when customers make repeated attempts due to failed transactions, telecom operators still provide connectivity for each attempt, thereby incurring operational costs, and 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.

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Adebayo noted that each time a USSD code is dialed, the telco provides the access, and if the bank does not complete the transaction, it does not negate the fact that the network has already been used, and that data bundles are sold within defined validity periods and are not designed for indefinite use.

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He clarified that subscribers can retain unused data through rollover options, provided they renew their subscriptions before the expiration of the current bundle, and that they have the benefit of extending it without losing unused portions by just resubscribing.

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Adebayo also shed light on the concept of toll-free lines, noting that such services are not entirely free but are funded by the receiving organisation, and that economic realities have made many organisations reluctant to sustain such costs, contributing to the limited availability of toll-free services in Nigeria.

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He acknowledged consumer frustrations, but stressed the need for greater public understanding of how telecom services operate, particularly the cost implications of maintaining network infrastructure, and pointed out that regulatory penalties imposed on operators for service lapses do not address fundamental challenges such as power shortages and infrastructure vandalism.

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Adebayo emphasized that 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, as the clarification comes amid rising public scrutiny of telecom billing practices.

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Many subscribers have been calling for more transparency and consumer-friendly policies in Nigeria’s telecommunications sector, prompting the need for such clarifications from industry stakeholders like ALTON.