NCC defends USSD charges, says telecom rates not based arbitrary figures

The Nigerian Communications Commission (NCC) has debunked speculations suggesting that telecom service charges—particularly the N6.98 Unstructured Supplementary Service Data (USSD) fee—are arbitrarily fixed, insisting that all rates are determined through a comprehensive cost-based regulatory process.

Dr. Aminu Maida, Executive Vice-Chairman and Chief Executive Officer (EVC/CEO) of the Commission, made this known during an interactive session with industry journalists in Abuja on Thursday, June 19, 2025.

Represented by Mrs. Nnenna Ukoha, the Acting Director of Public Affairs at the NCC, Maida clarified that telecom charges are not random figures but are the outcome of rigorous studies grounded in economic and operational realities.

His comments come in response to growing public concern over the recent directive by the NCC mandating telecom operators to deduct the N6.98 USSD charge directly from consumers’ airtime, instead of their bank accounts.

The move followed the Commission’s order to Nigerian Deposit Money Banks (DMBs) to cease direct deductions from customers’ bank accounts for USSD-related services.

Speaking at the forum, Mrs. Ukoha, on behalf of Dr. Maida, explained that the Commission typically undertakes a “comprehensive cost study” before approving any service-related charges.

This process, she said, considers key components such as infrastructure costs, network maintenance, and human capital expenditures borne by Mobile Network Operators (MNOs).

“Rates are not simply pulled out of thin air,” Maida emphasized. “We analyse how much it costs to provide a service—whether it’s voice calls, data, or USSD—before any rate is approved.”

According to the Commission, the current N6.98 USSD fee is based on these operational costs and is in line with international regulatory best practices that advocate cost-oriented pricing for telecom services.

READ ALSO: NCC: Nigerian telecom sector on recovery path, Expects significant investment surge

Maida reaffirmed the NCC’s role as both a regulator and consumer advocate, explaining that while ordinary subscribers may not be directly involved in pricing negotiations, their interests remain central to the Commission’s mandate.

“We scrutinise every proposed rate from operators and demand detailed cost breakdowns. If an operator wants to increase call or service rates, they must justify it before we even consider approval,” he said.

He noted that the highly technical nature of telecom economics often precludes everyday consumers from directly participating in rate-setting discussions. Nonetheless, the Commission ensures the public is not exploited by enforcing cost-reflective rates that also allow service providers to remain viable.

“In a liberalised market like Nigeria’s telecom sector, the goal is to strike a fair balance between protecting consumers from exploitative pricing and allowing operators to sustain investment and quality service delivery,” Maida said.

The NCC’s decision to shift the N6.98 USSD fee deduction to airtime balances followed ongoing disputes between telecom operators and deposit money banks over unpaid service fees, which previously threatened the availability of USSD services for mobile banking.

The resolution was part of the Commission’s broader efforts to ensure seamless digital financial services across Nigeria.

Industry insiders say the change is expected to improve transparency and reduce billing disputes, as airtime deductions are more visible and immediate to consumers.

Reacting to the NCC’s explanation, telecom industry analyst and ICT consultant, Mr. Femi Arowolo, described the Commission’s approach as “technically sound and fair.”

“A cost-based model is the globally accepted standard,” Arowolo said. “It gives the regulator room to ensure that rates reflect real market conditions without compromising service sustainability or consumer rights.”

However, he noted that better public education is still needed. “Many Nigerians assume these rates are simply imposed without justification. NCC needs to communicate its processes more proactively.”

As telecom services continue to expand and diversify, especially in financial services and digital connectivity, the NCC says it remains committed to ensuring that pricing reflects the actual cost of service delivery while safeguarding the interests of millions of Nigerian consumers.

“We will soon conclude a new cost study for USSD and other services,” Dr. Maida concluded. “Once completed, a new determination will be issued, and Nigerians can rest assured that it will be fair, transparent, and based on solid economic foundations.”