The Nigerian Communications Commission (NCC) has officially begun a comprehensive review of pricing frameworks for Unstructured Supplementary Service Data (USSD) and Application-to-Person (A2P) SMS services.
The Nigerian Communications Commission (NCC) has launched a comprehensive review of the pricing frameworks for Unstructured Supplementary Service Data (USSD) and Application-to-Person (A2P) SMS services. It aims to align the nation’s telecommunications tariff structures with the rapid expansion of digital financial services and emerging market realities.
The reassessment was unveiled at the Industry Stakeholder Consultative Forum on the Determination of Mobile Termination Rates in Nigeria, held in Lagos which also encompasses Mobile Termination Rates (MTR), International Termination Rates (ITR), retail pricing structures, and wholesale interconnection arrangements.
Speaking at the forum, Omotayo Muhammed, Director of Competition and Tariff at the NCC, stated that legacy pricing structures no longer accurately reflect the modern telecom ecosystem. She noted that high-volume operations like USSD channels, Mobile Virtual Network Operator (MVNO) integrations, and enterprise A2P messaging are not adequately covered by existing tariff regimes and now require formal regulatory treatment.
Furthermore, network cost structures are being reshaped by newer developments such as the ongoing rollout of 5G networks, the introduction of MVNOs, shifting consumer habits, and the rise of Over-The-Top (OTT) platforms making old interconnection rules obsolete.
USSD continues to serve as the core foundational channel for mobile financial transactions, making it highly strategic for banking the unbanked and underserved populations across rural and low-income areas while A2P SMS Channels has evolved into a vital communication channel for commercial banks, fintech startups, digital platforms, and government agencies. These entities rely heavily on A2P rails to deliver critical transaction alerts, authentication messages, one-time passwords (OTPs), and automated customer updates.
According to the study presented on the forum “USSD pricing floors and cap support Mobile financial services and are important to unbanked and underserved populations.”
NCC will reassess the existing USSD pricing floors and cap to determine their value under current market condition. The commission emphasized that USSD continues to play an important role in Nigeria’s digital market by ensuring mobile financial services and supporting financial nationwide inclusion drive.
The telecom regulator pointed out that current pricing models have remained largely unchanged since the last major regulatory determination in 2018. Over the past eight years, the scale and complexity of the digital services running on top of telecom networks have changed dramatically.
According Muhammed, the rapid adoption of 5G, Artificial Intelligence (AI), the Internet of Things (IoT), and the entry of Mobile Virtual Network Operators (MVNOs) have dramatically changed telecom network usage and infrastructure costs.
The regulator also stated that the exercise is part of a wider telecom reassessment that includes Mobile Termination Rates (MTR), International Termination Rates (ITR), retail price controls, and wholesale interconnection arrangements for MVNOs.
The NCC stated that the study relies heavily on industry data and jurisdictional benchmarking. The ultimate goal is to build an evidence-based, cost-reflective pricing model that protects consumers while encouraging long-term infrastructure investment and healthy competition across Nigeria’s digital economy.
