The severe economic conditions in Nigeria have been attributed by African pay-TV operator Multichoice Group, as the number of active DSTv subscribers in the nation has dropped by 18%.
This was mentioned in the business’s financial report for the year that ended on March 31, 2024. It said that the downturn in Nigeria had an impact on its entire subscriber base, resulting in a 9% annual reduction.
Nigeria’s total subscription number is not disclosed because it is combined with other South African operating units that are classified as “Rest of Africa” (RoA). However, according to Multichoice, the 18% decline in Nigeria caused the RoA’s total active subscriber count to drop by 13% to 8.1 million from 9.3 million in 2023.
According to the company, “The group’s 9% 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.”
Tough Economy
Despite enacting pricing increases three times in the past year, the company blamed Nigeria’s fall on the state of the economy.
It stated “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%, and higher emigration of the middle and upper class drove an 18% YoY decline in active subscribers.”
Furthermore, it stated that as a result, Nigeria’s revenue share for the rest of Africa decreased from 44% to 35%. However, given that Ghana’s inflation rate is still higher than 20%, it was noted that the country saw a similar subscriber trend.
To the digital news platform, Multichoice went on to say that its RoA (Redemption, Africa, Ghana, Kenya, and Zimbabwe) business has to refocus its short-term priorities from subscriber development to cash flow protection and profitability due to the difficult market conditions.
Continuing, “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 stated.
South Africa’s declining subscriber base Multichoice reported a 5% reduction in active customers in its home country of South Africa, indicating that the decline was present throughout its activities. There were 7.6 million subscribers in the nation as a whole.
The business attributed the decrease to the 275 days of annual power disruptions, which it claimed further deterred prospective customers without backup power.
It disclosed that “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.”
What You Should Know
Multichoice has raised the cost of its DStv and GOtv bundles three times in the past year due to growing inflation. April 2023 saw the first, while November of the same year saw the second. This year’s third increment went into effect on May 1 after it was announced in April.
Based on a complaint brought by a firm client from Nigeria, the Competition and Consumer Protection Tribunal (CCPT) in Abuja issued an order prohibiting from implementing the new rates ahead of their May 1 implementation.
Multichoice, however, disregarded the court’s ruling and went forward with the revised rates. As a result, the Tribunal fined Multichoice N150 million for contesting the court’s jurisdiction. Nigerians should receive a complimentary one-month membership to DSTV and GOTV from Multichoice, according to the ruling rendered by three members of the panel, chaired by Thomas Okosu, on Friday.
Adding, at the time this report was filed, Multichoice had not yet responded to the ruling. Multichoice has promised to file an appeal of the ruling.
