MTN Nigeria has clawed back $21 million of the $49 million owed by Nigerian banks for Unstructured Supplementary Service Data (USSD) services, marking a partial victory in a protracted battle between telecom operators and financial institutions.
However, $28 million remains outstanding, leaving the issue unresolved as the telecom giant pushes for full repayment.
The recovery follows a landmark intervention by Nigeria’s Central Bank (CBN) and the Nigerian Communications Commission (NCC) in December 2024. The regulators ordered banks to pay 85% of the $164 million total debt owed to telecom operators by December 31, 2024, and to settle 85% of new invoices within a month. Banks were also required to agree on a structured repayment plan by January 2, 2025, with non-compliance risking penalties such as fines and service restrictions.
Despite the regulatory push, MTN Nigeria confirmed that the $28 million still unpaid has been classified as receivables, with hopes of recovery in 2025. The telecom industry has long criticized banks for delayed payments, citing disputes over revenue-sharing agreements and billing accuracy. The USSD debt crisis, which has simmered for years, stems from banks’ reluctance to pay transaction fees and disagreements over how revenue should be distributed.
Regulatory efforts to resolve the issue, including a 2021 NCC directive allowing direct deductions from customer accounts, have yet to fully bridge the gap. While some banks have begun repayments, it remains unclear whether any have missed the December 31 deadline or if the CBN and NCC will impose penalties. Telecom operators, including MTN, are urging stricter enforcement, warning that inconsistent payments threaten their financial sustainability and ability to invest in infrastructure.
The partial debt recovery provided a modest boost to MTN Nigeria’s 2024 earnings, contributing 3.1% to its service revenue, which rose to $2.17 billion from $1.58 billion in 2023. However, the company’s overall financial performance remained under pressure, with an after-tax loss of $263 million—nearly triple the $90 million loss recorded in 2023. The losses were driven by a combination of factors, including the naira’s sharp devaluation, rising tower lease costs, and foreign currency obligations exacerbated by exchange rate volatility.
Looking ahead, MTN Nigeria remains cautiously optimistic. A recent tariff hike, approved by regulators to help telecom operators offset rising costs, is expected to drive a 40% revenue increase in 2025. This, coupled with ongoing efforts to recover outstanding USSD debts, could help stabilize the company’s finances.
As the USSD repayment saga continues, industry stakeholders are closely watching the CBN and NCC to ensure banks meet their obligations. For MTN Nigeria and other telecom operators, the resolution of this long-standing dispute is critical to maintaining financial health and funding future growth in a sector that remains vital to Nigeria’s digital economy.
