Dhaka, Bangladesh (BBN)– CGAP (Consultative Group to Assist the Poor) is set to submit a study report on pricing model for mobile phone operator’s USSD channel to the central bank on Tuesday.
“The CGAP, a World Bank nominated research organization, will present their study on pricing model for mobile phone operator’s USSD channel, an essential tool for accessing mobile financial services through low cost handsets at a meeting, to be held at the central bank headquarters in Dhaka today,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.

Unstructured Supplementary Service Data (USSD) is a protocol used by GSM cellular telephones to communicate with the service provider’s computers. It is a session-based protocol.

The central bank of Bangladesh earlier appointed the CGAP, a global advocacy platform to promote financial inclusion, to conduct a cost model study on USSD after a high-powered committee failed to reach a consensus for fixing a uniform pricing model for USSD charge.

Currently, most of the MFS (Mobile Financial Service) providers in Bangladesh provide their mobile banking services over USSD and share a part of their revenues with the mobile phone operators.
“The level of revenue sharing is depending on the agreements between the telcos and MFS providers,” the central banker explained. “It’s an unhealthy competition.”

Industry people said the MFS operators are already sharing around 80 per cent of its revenue with the agents and distributors as commission and 7.0 per cent or more with the MNOs (Mobile Network Operators) while none of them reaches break-even level.

“Amid this situation, any USSD price fixing move without careful consideration may slowdown the growth of the sector which will ultimately affect the ongoing financial inclusion drives of the BB as well as the government,” an expert noted.

Currently, Grameenphone, Banglalink, Robi, Airtel, Citycell and Teletalk are operating in Bangladesh.