THE USSD PRICING CONTROVERSY 

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Minister of Communications, Dr. Isa Ali Pantami

MONDAY EDITORIAL

The Minister of Communications’ interference on the pricing regime is unnecessary

Minister of Communications and Digital Economy, Dr. Isa Ali Pantami, last month, ordered the immediate suspension of plans by telecommunications companies in Nigeria to begin a regime of directly charging for the use of the Unstructured Supplementary Service Data (USSD) for financial transactions as against undisclosed, hidden charges by the banks on the USSD for mobile-based financial transactions. The directive followed the announcement by MTN Nigeria, the country’s largest telecoms company, about plans to commence a pricing regime of directly charging N4.00 per 20 seconds session of the USSD access fees on its network, beginning from Monday, 21st October 2019.

The announcement by MTN was in line with the Nigerian Communications Commission’s (NCC) regulations to always place a public notice for any new price regime to be introduced for consumers in the sector. The NCC, the independent telecoms regulatory authority in the country, has since complied with the minister’s directive by placing a public notice in national dailies, directing the telcos to suspend the plan. Reports, however, show that more than 90% of already banked customers now depend on the USSD to carry out a number of banking transactions by simply using a combination of codes and hashtag on their mobile phones, which has helped deepen financial inclusion in the country. Physical transactions done in bank branches across the country account for only 10% of the total financial transactions in the last three years, according to the apex bank.

Yet as the controversy raged on, the Association of licensed Telecoms Operators of Nigeria (ALTON) has variously maintained that the decision to charge by the telcos was in line with a determination on USSD pricing issued by the NCC, dated July 23, 2019 and not an arbitrary decision. Now the snag is that Pantami who apparently took the decision to suspend the USSD charged at a weekend had even gone ahead to foreclose any possibility of review of his decision. That is a problem.

 While Pantami’s passion to protect the Nigerian consumer is appreciated, we must not also turn a blind eye to the way and manner he interfered with the regulatory functions of the agency under his supervision. If the new USSD charges are as a result of determination, it must be respected as a case of secondary legislation, which Pantami lacks the power to suspend or cancel. The Nigerian Communications Act (2003) solely empowers the NCC “with the exclusive competence to determine, pronounce upon, administer, monitor and enforce compliance with competition laws and regulations, whether of a general or specific nature, as it relates to the Nigerian communications market”.

No doubt, the sections 4, 90 and 92 of the act entrust the NCC “with the protection and promotion of the interests of consumers against unfair practices including but not limited to; matters relating to tariffs and charges, the availability and quality of communications services, equipment and facilities, and the promotion of fair competition in the communications industry and protection of communications services and facilities providers from the misuse of market power or anticompetitive and unfair practices by other service or facilities providers”.

All said, we are of the view that the minister is setting a dangerous precedent by delving into a regulatory issue, which is clearly outside his supervisory role. However, the NCC should not been seen to be caught in the dereliction of constitutional mandate, especially in a free market economy. Without its regulatory independence, Nigeria risks a clear danger rolling back the years to pre-liberation era, when over 100 million Nigerians boast of less 500,000 lines of telephony.

Despite the fact that the sector currently boasts of 179m lines, Nigerians are still complaining of quality of telecom services they subscribe to. In other words, there’s still a lot to be done by the commission.