MTN Nigeria Communications Plc has reported a N42 billion Unstructured Supplementary Service Data (USSD) service debt against the deposit money banks (DMBs) operating in Nigeria.
The telecommunications giant, which had been in a serious financial mess following the recent macroeconomic reality, revealed this in its 2024 audited financial statements.
The total USSD service debts directed by the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) to banks to pay MTN amount to N74 billion, the report showed.
An analysis of the report shows that only a payment of N32 billion was received as of December 31, 2024, while the balance of N42 billion was recognised as debt in the review year.
“Thanks to our regulators’ intervention, the uncertainty around the outstanding USSD debt recovery has been resolved, enabling us to recognise approximately N74 billion in revenue.
“As of December 2024, approximately 34 per cent had been repaid, and the remaining balance was recognised as receivables, which are expected to be settled in 2025,” MTN Nigeria chief executive officer, Karl Toriola, said in a statement on Friday, February 28.
He hinted that the USSD revenue recognition helped the company to improve its service revenue by 35.9 per cent to N3.3 trillion.
The USSD debt obligation has been a concern to MTN and other telecommunications companies.
The ICIR can report that a USSD is a service that allows users to communicate with a mobile network operator’s computer in which a provider charges a fee for the transaction.
It is one of the tariffs the NCC recently hiked following mounted pressures from the telecommunications companies.
In October last year, Toriola had reacted that MTN would likely shut down its operation if the tariff did not increase.
His lamentation came on the backdrop of the company’s poor financial performance and negative equity balance.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” Toriola said, maintaining at the time that MTN might suspend the USSD banking services due to the N250 billion debt owed by Nigerian banks.
The ICIR has reported in many instances how mobile network operators had raised concerns over the USSD indebtedness by the banks and had sought regulatory approval to halt the support services until the debts were paid.
The operators have also sought for upward adjustment of tariffs to reflect the economic realities which was recently approved by a 50 per cent.
Meanwhile, a cursory look at the 2024 audited account shows that MTN Nigeria posted a loss after tax of N400.44 billion, which widened from N137.02 billion in 2023.
Its financial position shows a negative equity of N458.01 billion, which also widened from N40.84 billion.
A negative equity balance means that MTN Nigeria is in debt and may be unable to pay its creditors as its total liabilities of N4.65 trillion exceeded its total assets of N4.196 trillion as of December 2024.
Given the losses, which it blamed on currency devaluation and its impact on retained earnings, the company said its directors could not recommend a final dividend payment for its shareholders.
“As we navigate the uncertainties ahead, we will remain agile and responsive to emerging market trends and regulatory environments.
“We have made significant progress in our initiative to strengthen our capital position. This includes successfully renegotiating our tower contracts, obtaining approval for tariff adjustments, and making strides in reducing foreign exchange exposure. These will support margin recovery and put us on track to restoring our capital position,” Toriola added.