African Pay-TV operator, Multichoice Group, has attributed an 18% decline in active DStv subscribers in Nigeria to the country’s harsh economic conditions. This decline significantly impacted Multichoice’s overall subscriber database, resulting in a 9% drop for the year ending March 31, 2024.
While specific figures for Nigeria were not disclosed, Multichoice noted that Nigeria’s subscriber decline contributed to a 13% decrease in the ‘Rest of Africa’ (RoA) segment, reducing its total active subscribers from 9.3 million in 2023 to 8.1 million. The RoA segment includes other operating units outside South Africa.
The group stated that its 9% overall decline in active subscribers was primarily driven by the 13% reduction in the Rest of Africa business. This was largely due to customers in countries like Nigeria prioritizing basic necessities over entertainment amidst economic challenges. In contrast, the South African business showed more resilience with only a 5% decline.
Blaming Nigeria’s economic difficulties, Multichoice highlighted that despite three price increases in the past year, the economy and consumers faced persistent challenges. These included the removal of fuel subsidies, sharp currency depreciation, inflation rising above 30%, and increased emigration of the middle and upper classes, leading to an 18% year-on-year decline in active subscribers.
The company reported that Nigeria’s contribution to the Rest of Africa revenues dropped from 44% to 35%. Ghana experienced a similar trend, with inflation rates remaining above 20%. In response to these challenges, Multichoice shifted its focus from subscriber growth to safeguarding profitability and cash flows in its RoA markets, which include Nigeria, Angola, Kenya, Ghana, and Zimbabwe.
To mitigate the impact, Multichoice implemented several cost-saving measures. These included significantly reducing decoder subsidies by 46% year-on-year (saving ZAR1.3 billion) and cutting selling, general, and administrative costs by ZAR500 million. These efforts helped the Rest of Africa business increase trading profit by 48% year-on-year to ZAR1.3 billion.
Multichoice also reported a 5% decline in active subscribers in South Africa, where the total subscriber base stood at 7.6 million. The decline was attributed to frequent power outages, which discouraged potential subscribers without backup power.
The company noted that the Premium bouquet is stabilizing due to targeted retention efforts. However, the premium customer tier, which includes the Premium and Compact Plus bouquets, declined by 8%. The mid-market Compact base, most exposed to macroeconomic challenges, dropped by 9%, while the mass-market tier decreased by 2% due to pressure in the Family base, load shedding, and reduced decoder subsidies.
Amid rising inflation, Multichoice increased its DStv and GOtv bouquet prices three times in the last year: first in April 2023, again in November, and the latest hike in April 2024, effective from May 1. Ahead of this latest increase, a Competition and Consumer Protection Tribunal in Abuja issued an order restraining the company from implementing the new prices, following a case filed by a Nigerian customer.
Despite the court order, Multichoice proceeded with the price hike, resulting in the Tribunal imposing a N150 million fine on the company for challenging the court’s jurisdiction. The Tribunal also ordered Multichoice to provide Nigerians with a one-month free subscription on DStv and GOtv. Multichoice has yet to respond to the verdict but has vowed to appeal the judgment.