Nigerian telcos' revenues are under pressure as people switch to digital calls

Yesterday, the telecommunications company, MTN Nigeria announced ten alternative channels for its customers to buy airtime for their mobile devices after commercial banks disallowed MTN subscribers to use their channels. All banks in Nigeria, except Zenith Bank, have taken MTN off their platform.

Customers can now recharge airtime through fintech solutions platforms such as Flutterwave, Jumia Pay, OPay, Kuda, Carbon and BillsnPay.

How it started

The disagreement began after MTN reduced the percentage it remits to the banks for each amount of airtime from 4.5% to 2.5%. In response to this sudden development, the banks removed the telecom firm from their platforms on Friday, following a feud over the sharing of fees by both sides.

On Friday, the Nigerian government announced that it has made attempts to resolve this issue, stating that talks to resolve the dispute have “reached an advanced stage.” 

“On the fallout between @MTNNG and some banks on USSD services today, I engaged with both regulators, the Governor of @cenbank and EVC @NgComCommission. We have reached an advanced stage of resolving the issues, for the services to be restored to our citizens. Many thanks,” the Minister of Communication and Digital Economy, Isa Pantami, announced on Twitter.

This feud is happening just two weeks after, the government resolved an earlier USSD issue between Banks and telecoms resulting in Nigerians who use Unstructured Supplementary Service Data (USSD) having to pay a ₦6.98 fee per transaction. 

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MTN is the largest telecommunication operator in the country, with about 77 million subscribers, making up about 45% of the total telecommunication market share in Nigeria. This recent feud with Nigerian banks left millions of MTN subscribers stranded and frustrated as they are unable to recharge airtime through USSD and bank apps amid the Easter celebrations.


Update: On Sunday, April 4th MTN Nigeria reverted commercial banks’ commission to 4.5% after Nigerian banking and communication regulators intervened in its dispute with Nigerian Banks. This move by MTN corroborates the statement made on Friday, by the Nigerian government that talks to resolve the dispute have “reached an advanced stage.” 

A statement signed by MTN Chief Executive Officer, Karl Toriola, and addressed to the Chairman of Body of Banks’ CEOs, Herbert Wigwe on Saturday said:

“In an attempt to resolve the current USSD recharge impasse, given the intervention from our regulators, we hereby agree that the banks revert to the status quo of 4.5% commission.”
“However, the banks and MTN Communications Nigeria Plc shall sit to agree on various options that will result in the reduction in the costs on 6th of April 2021.”

The meeting between MTN and commercial banks on Tuesday ended in a deadlock, it was adjourned to the next day – Wednesday.

*Story updated with MTN’s decision to commercial banks’ commission to 4.5% dispute

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