South African pay TV operator Multichoice Group has announced that its Nigerian arm, Multichoice Nigeria, lost 243,000 subscribers across its DStv and GOtv services in the six months from April to September this year.
The group disclosed this in its interim financial results for the six months ended September 30, 2024, published on Tuesday.
According to the company, the high cost of food, electricity and fuel in Nigeria, coupled with high inflation of over 30%, has led many customers to abandon their decoders.
Although actual figures were not disclosed at the time, Multichoice declared a loss of 18% of its Nigerian subscribers in its financial report for the financial year ended March 2024.
The company added that pressure on the subscriber base of its remaining African operations continued from the previous year, resulting in a loss of 566,000 subscribers across its operations in the six months under review.
Big losses in Nigeria and Zambia
Multichoice said two markets, Zambia and Nigeria, accounted for the lion’s share of the losses, noting that the number of subscribers fell in the last six months compared to 803,000 in the previous six months.
“In the Rest of Africa business, the rate of decline slowed to 566,000 subscribers in the first half of FY25, with a decline of 803,000 subscribers in the second half of FY24.
“Of this decline, 298,000 are associated with Zambia and 243,000 are associated with Nigeria, with the remaining markets on the continent reflecting only a small decline of 25,000.” The company stated in its financial results:
While Nigeria’s losses were due to inflation, the company attributed Zambia’s losses to power outages caused by a drought that could last up to 23 hours a day.
The most demanding operating conditions
Commenting on the company’s results, MultiChoice Group CEO Calvo Mawela said the company was facing the most difficult operating conditions in nearly 40 years.
- To drive profitability, he said the group had been actively focusing on ‘right-sizing’ the business to match current economic realities and industry changes.
- According to him, operating across Africa normally exposes the group to exchange rate fluctuations, but unusual currency weakness over the past 18 months has reduced the group’s profits by nearly R7 billion.
“Combined with the impact of the weak macro environment on consumer disposable income and subscriber growth, the group needed to fundamentally adjust its cost base, and this is exactly what it has done.
“We are making good progress in resolving the technical insolvency issues arising from non-cash accounting entries at the end of last fiscal year.
“We expect to return our net capital position to positive by the end of November this year, supported by various developments and initiatives. The Group’s liquidity position remains strong, with total available funds of over ZAR10 billion.” he said
Streaming Service Challenge
Mawela also said the group was adapting to global pay TV challenges as streaming services, the rise of social media and changing consumer preferences impacted its traditional broadcast business.
- According to him, Showmax, which has reported a 50% year-on-year increase in its paid customer base, has strategically positioned its business to actively participate in the streaming revolution as it gains momentum across Africa.
- He said the group had increased its investment in the business by ZAR1.6 billion over the interim period to create sufficient capacity and drive growth.
What you need to know
Amid rising inflation, Multichoice Nigeria has hiked the prices of its DStv and GOtv bouquets three times in 12 months, twice last year and once this year.
- The first was in April 2023, and the next in November of the same year. The third increment was announced in April this year and went into effect on May 1.
- Ahead of the implementation of the new prices on May 1, the Abuja-based Competition and Consumer Protection Tribunal (CCPT) issued an injunction blocking the implementation of the new prices based on a lawsuit filed by the company’s Nigerian customers.
- But Multichoice ignored the court order and implemented the new prices. This led the tribunal to impose a fine of N150 million on Multichoice for challenging the jurisdiction of the court.
The ruling by three members of the panel led by Thomas Okosu last June ordered Multichoice to provide Nigerians with one month of free subscriptions to DSTV and GOTV.
