African pay-TV operator Multichoice Group has attributed the severe economic conditions in Nigeria, 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.
“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 prioritize necessities over entertainment, while the South African business showed more resilience with a 5% decline,” the company said.
Challenging Economic Conditions
Despite enacting price increases three times in the past year, the firm blamed Nigeria’s decline on the economy, saying:
“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.
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.
A number of cost-cutting measures were put into place, including a major reduction in decoder subsidies (-46% YoY or ZAR1.3 billion) and a ZAR500 million drop in marketing, general, and administrative (SG&A) expenses. The business for the rest of Africa was able to boost trading profit by 48% YoY to ZAR1.3 billion thanks to these actions, the statement stated.
Things To Note
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 implementation of 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.
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.
