Page 198 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

The Bangladeshi MNOs have been lobbying for a change in the USSD charging model, which could result in
large increases in USSD charges for SPs and customers if implemented. Even so, there are complaints from
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SPs and banks that wholesale USSD prices are too high.
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This issue is especially championed by banks competing with bKash, whose current individual negotiating
power is small given their high fragmentation. bKash, however, given its large market share, has a much
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better bargaining position and is more likely to secure more competitive rates to USSD access, which in effect
reinforces bKash’s dominance. Although the Bangladesh Bank initially identified the issue via complaints from
the financial institutions it regulates, it is currently engaging the BTRC and other stakeholders through a dispute
resolution mechanism. In this context, the BTRC is attempting to do a cost-based analysis of MNOs USSD
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channels to determine a price point for USSD access to DFS services. 123
India

As noted above, the telecommunications regulator, TRAI, slashed USSD access prices by two thirds to INR. 0.50
per USSD session in November 2016 after complaints about the service ensuing form a public consultation on
pricing. A similar November 2013 initiative by TRAI who had prescribed a ceiling tariff of INR.1.50 per USSD
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session. However this did not lead to the desired result, as both the number of transactions and transaction
completion rate were below TRAI’s expectations.
Peru

The telecommunications regulator in Peru, Osiptel, issued standards to ensure fair and equal access of
electronic money issuers to telecommunications services in 2014, including non-discriminatory pricing for
access to USSD. While these regulations were set by Osiptel, the central bank played a significant role in
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creating the regulatory framework around pricing for access. 126
Uganda

A study on the wholesale USSD market as part of a broader Market Power Assessment by UCC found evidence
of dominance by the MNOs with a potential to abuse. A review of alleged price excessiveness is underway.
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Zimbabwe
MNO Econet Wireless, through its EcoCash mobile money service subsidiary, was probed by the Competition
and Tariff Commission in 2015 as to whether it contravened the competition law in dealing with banks. It had
connected banks to its USSD platform for VAS, but charged the banks a higher fee for DFS transactions than
what it had charged non-banks connected to EcoCash as well as its subsidiary, Steward Bank.
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119 The Association of Mobile Telecom Operators of Bangladesh recently submitted its proposal to the Bangladesh Telecommuni-
cation Regulatory Commission to increase USSD fees. Daily Star (2016) Telcos Propose To Hike Charge For Mobile Wallet Users,
available at https:// goo. gl/ TSrPLP
120 Hanouch & Chen (2015) ibid
121 ADB (2016) Digital Payment Systems, Mobile Money Services and Agent Banking: Bangladesh, Nepal and Sri Lanka, available at
https:// goo. gl/ usuONK
122 ADB (2016) ibid; Bangladesh Bank oral communication to the TIC WG.
123 CGAP apparently submitted a report to BB on USSD access. See Business News (2015) CGAP To Submit Report On USSD Charging
Mechanism For DFS, available at https:// goo. gl/ Y5e725
124 TRAI (2016d) The Telecommunication Tariff (Sixty First Amendment) Order, 2016 No. – 1 Of 2016, available at https:// goo. gl/
7kHo45. These moves coincided with a sudden demonetization program in November 2016 by the government of India aimed
at ridding the country of high value cash notes thought to be used for money laundering. DFS access surged in the wake of the
demonetization announcement.
125 Mas, I (2014) Shifting Branchless Banking Regulation from Enabling to Fostering Competition, available at https:// goo. gl/ 1Fb48a
126 CGAP (2014) ibid
127 See Cartesian (2015) Mobile Platform Access for USSD-based Applications (MPA-USSD), available at https:// goo. gl/ 8RrIq4
128 TechnoMag (2015) Econet Awaits Judgment From Competition and Tariffs Commission, available at https:// goo. gl/ pivUkH

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