End-User Billing Framework in Nigeria: A Game-Changer for Telcos and Subscribers
By DAYO ADESULU
Introduction to the End-User Billing Framework in Nigeria
The End-User Billing framework in Nigeria marks a significant shift in the way Unstructured Supplementary Service Data (USSD) services are monetized. Designed jointly by the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN), this model places control directly into the hands of mobile network operators like MTN, Airtel, 9mobile, and Glo.
Under this new system, telecom providers can now deduct N6.98 per session from subscribers’ airtime, bypassing banks that previously acted as intermediaries. It’s a long-anticipated change meant to eliminate disputes, ensure timely payments, and ultimately enhance service quality for end-users.
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Historical Context of USSD Billing in Nigeria
Before the End-User Billing framework in Nigeria, model USSD transactions involved a convoluted relationship between telecoms and banks. Telecom operators delivered the USSD service—used for checking balances, transferring funds, and bill payments—while banks collected service fees from users.
However, by the end of 2024, telcos had provided over ₦200 billion worth of USSD services for which they claimed they had not been adequately compensated. This misalignment prompted years of disputes and threats of service disruption, pushing the NCC and CBN to act.
The Role of the Nigerian Communications Commission (NCC)
The NCC played a central role in advocating for the End-User Billing framework in Nigeria system. As Nigeria’s telecom regulator, it recognized that a transparent revenue model was essential for sector sustainability. In collaboration with the CBN, it introduced policies that ensured service providers would not continue to operate at a loss.
By enforcing a user-centric model, the NCC has brought regulatory clarity to a long-murky area of Nigeria’s digital finance ecosystem.
CBN’s Intervention and Joint Circular with NCC
A joint circular issued on December 20, 2024, laid out the roadmap for implementation. It required commercial banks and telcos to meet several financial and operational standards before transitioning to the new model. One of the most notable directives was a debt repayment plan for banks.
The plan mandates:
- 60% of historical debts to be paid by 2 January 2025,
- Full settlement by 2 July 2025, and
- 85% of all new bills to be cleared by 31 December 2025.
Key Features of the End-User Billing Model
- Subscriber Consent: Users must explicitly opt in before being charged.
- Flat Rate Fee: Charges remain at N6.98 per session, valid for up to 120 seconds.
- Direct Deduction: Payment is made straight from airtime, not through banks.
These changes make the process more transparent and easier for users to monitor and control.
How the New Model Empowers Telecom Operators
For telcos, the benefits are twofold:
- Improved Cash Flow: Funds now go directly into their revenue streams.
- Operational Efficiency: Eliminating middlemen reduces administrative overhead and delays.
According to Gbenga Adebayo, Chairman of ALTON, the framework marks a “significant milestone” in building a sustainable ecosystem.
Impact on Commercial Banks in Nigeria
Banks, on the other hand, lose a lucrative control point in USSD billing. Their role is now limited to ensuring backend interoperability and compliance with payment timelines. Those that fail to adapt may risk strained relationships with telcos or regulatory penalties.
What This Means for Mobile Subscribers
For the average Nigerian subscriber, the shift introduces:
- Greater Transparency in how charges are applied.
- Assurance of Consent, avoiding unauthorized deductions.
- Improved Service Delivery, as telcos now have more resources.
It’s also expected to curb customer complaints and build trust in digital services.
Reactions from Industry Stakeholders
Adeolu Ogunbanjo, President of NATCOMS, described the framework as “long overdue.” He praised the NCC for its leadership and stressed that this model could reduce poor service quality by giving telcos financial autonomy.
Settlement of Historical Debt: Phased Approach
The structured repayment model ensures banks don’t suffer overnight shocks. The phased approach also provides telcos with a degree of predictability and regulatory assurance that funds will eventually be recouped.
Technical Readiness and Implementation Challenges
While telcos were largely ready, many banks struggled with backend integration and compliance. Challenges included:
- Building systems for error reporting,
- Enabling real-time deductions, and
- Aligning with subscriber consent protocols.
Role of USSD in Financial Inclusion in Nigeria
USSD is especially crucial in a country where smartphone penetration and internet access remain uneven. Millions of Nigerians in rural or low-income areas rely on USSD for mobile banking, bill payments, and social welfare programs.
Remaining Issues and Compliance Gaps
Despite the rollout, some banks are still behind in their obligations. There’s risk of:
- Temporary service disruptions,
- Customer confusion, and
- Regulatory penalties.
Ongoing supervision by NCC and CBN remains vital.
Expected Benefits of End-User Billing
- Restored Trust: Clear user consent and visible deductions.
- Sector Growth: With better cash flow, telcos can reinvest in infrastructure.
- Operational Clarity: Defined responsibilities for all parties involved.
Comparison with Other African Telecom Markets
Countries like Kenya and Ghana have successfully transitioned to models that give telcos more billing control. The End-User Billing framework in Nigeria framework follows this trend, aiming for the same levels of transparency and efficiency.
What Subscribers Should Know About the Transition
- USSD Codes Remain Active: No need to change your habits.
- Check Airtime Balance Before Transactions: Charges now apply directly.
- Contact Telcos for USSD Issues: Banks only handle transaction errors.
Frequently Asked Questions (FAQs)
1. What is the End-User Billing framework in Nigeria?
The End-User Billing framework in Nigeria is a system that allows telcos to deduct USSD service charges directly from subscribers’ airtime, bypassing banks.
2. How much does each USSD session cost?
Each session costs N6.98 and lasts up to 120 seconds.
3. Do I need to opt-in before being charged?
Yes, you will receive a prompt and must approve the deduction.
4. Will my USSD codes change?
No. All existing USSD codes remain functional.
5. What happens if a USSD transaction fails?
Contact your bank for refund issues, and your telco for service disruptions.
6. Why was this change introduced?
To improve transparency, resolve disputes between banks and telcos, and enhance service quality.
Conclusion: A Transparent, Subscriber-Centric Future
The End-User Billing framework in Nigeria is more than just a billing reform—it’s a critical evolution of the telecom sector’s relationship with digital finance. By putting control back into the hands of telcos and ensuring clear consent from subscribers, the framework promises better services, fairer billing, and a more inclusive digital economy for all Nigerians. #End-UserBillingframeworkinNigeria
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