African Pay-TV operator, Multichoice Group, has blamed Nigeria’s harsh economic condition as active DStv subscribers in the country declined by 18%.
The company stated this in its financial result for the year ended March 31, 2024. It said the decline in Nigeria affected its overall subscriber database leading to a 9% decline for the year.
While the total subscription figure for Nigeria is not stated as it is lumped with other operating units outside South Africa tagged as ‘Rest of Africa’ (RoA), Multichoice reported that the 18% decline in Nigeria brought the RoA’s total active subscribers down by 13% to 8.1 million from 9.3 million in 2023.
“The group’s 9 per cent decline in active subscribers was mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline,” the company stated.
Blaming the decline in Nigeria on the economy despite implementing price increments three times in the last year, the company said:
“The Nigerian economy and consumers faced persistent challenges through FY24. The removal of fuel subsidies, sharp currency depreciation with the official naira halving in value, inflation climbing to over 30 per cent, and higher emigration of the middle and upper class drove an 18% YoY decline in active subscribers.”
It added that this also reduced Nigeria’s contribution to the Rest of Africa revenues from 44% to 35 per cent. It noted, however, that Ghana saw a similar subscriber trend given an inflation rate that is still above 20%
Multichoice further stated that due to the challenging market dynamics, the short-term focus of its RoA (Nigeria, Angola, Kenya, Ghana, and Zimbabwe) business was shifted from subscriber growth to safeguard profitability and cash flows.
“Several cost-saving initiatives were implemented, including scaling back significantly on decoder subsidies (-46% YoY or ZAR1.3 billion), and reducing selling, general, and administrative (SG&A) costs by ZAR500 million. These interventions enabled the Rest of Africa business to increase trading profit by 48% YoY to ZAR1.3 billion,” it said.
Showing that the decline was across its operations, Multichoice reported active subscribers in its home country, South Africa also declined by 5%.
The total subscriber base in the country stood at 7.6 million.
The company blamed the decline on the power outages experienced on 275 days of the year, which it said further discouraged potential subscribers without backup power.
“Although the Premium bouquet is trending toward a stable base given the targeted retention efforts, the premium customer tier (which includes the Premium and Compact Plus bouquets) declined by 8%. The mid-market Compact base, which is most exposed to the macroeconomic challenges, was down 9%, while the mass-market tier was 2% lower due to pressure in the Family base, the impact of load shedding, and reduced decoder subsidies,” it said.
Amid the rising inflation, Multichoice had increased its DStv and GOtv bouquet prices three times in the last one year.
The first was in April 2023, then another in November the same year. The third increment was announced in April this year and took effect on May 1.
Ahead of the implementation of the new prices on May 1, a Competition and Consumer Protection Tribunal (CCPT) sitting in Abuja issued an order restraining from implementing the new prices based on a case filed by a Nigerian customer of the company.
However, Multichoice ignored the court order and implemented the new prices. This prompted the Tribunal to slam a fine of N150 million on Multichoice for challenging the jurisdiction of the court.
The verdict delivered by three of the panel led by Thomas Okosu on Friday also ordered Multichoice to give Nigerians a one-month free subscription on DSTV and GOTV.
Multichoice has yet to respond to the verdict as of the time of filing this report. Multichoice has vowed to appeal the judgement.
