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Subscribers protest Multichoice’s ‘outrageous profit’

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Tribunal slams N150m fine on Multichoice, orders free one-month subscriptions

By AYOOLA OLAOLUWA

Nigerian subscribers of South African-based pay cable TV operator, MultiChoice Group, have slammed the company for living off the blood, sweat and tears of hapless customers, just as the company posted another trading profit largely driven by its Nigerian business.

The subscribers who spoke to Business Hallmark in separate interviews in Lagos, wondered how the company could exponentially grow its profit while its Nigerian customers grapple with rampaging inflation, fuel shortages and frequent electricity blackouts.

MultiChoice Group, in its full-year 2022 results obtained by our correspondent, raked in the sum of $697.8 million (about N292 billion) in the year ended March 31, 2022.

According to the report, Nigeria led the Rest of Africa (RoA) in the percentage of subscription revenue and year-on-year subscription growth.
For instance, Nigeria ranked first with year-on-year subscription growth of 11% and 43% of total subscription revenue in the period under review, compared to Kenya’s drop of 4% in year-on-year subscription growth and a 9% growth in subscription revenue; Zambia’s 3% drop in year-on-year subscription growth and 7% growth in subscription revenues and Angola’s year-on-year subscription growth of 1% and 5% of subscription revenue.

In real monetary terms, the company generated a subscription revenue of ZAR 7.1 billion ($475.5 million) from Nigeria alone, representing a 5% increase year on year, while Zambia recorded subscription revenues of ZAR6.8 billion during the same period.
When converted at the official rate of N412.9, MultiChoice generated N196.3 billion revenue from Nigeria.

Meanwhile, the declared revenue is just subscription revenue, and excludes revenue from hardware sales, advertising revenue and other revenues.

As part of its tax obligations, Multichoice kept aside ZAR600 million in relation to its court dispute and tax audit with the Federal Inland Revenue Service (FIRS).

According to the company, the growth was on the back of the popularity local contents such as the Big Brother Naija and Nigerian Idol had on the performance of the RoA operations.
Also, the revenue growth was aided by SuperPicks, a free-to-play predictor game (Multichoice’s first product synergy with KingMakers) launched in Nigeria in August 2021. SuperPicks already has half a million users, the company disclosed.

Not done yet, MultiChoice also projected higher PayTV penetration for its Nigerian business which it currently put at 35%, compared to South Africa’s 53% and North America at 61%.
“Reduced losses in the Rest of Africa (RoA), a rebound in advertising revenues, and a continued focus on cost containment enabled us to absorb the R1.1billion ($74.5 million) impact of a normalization in content costs as live sport returned and we resumed our local content production post the COVID-19 lockdowns.

“As a platform of choice, our group will look to further expand our entertainment ecosystem by identifying growth opportunities that leverage our scale and local capabilities”, declared Calvo Mawela, CEO of MultiChoice Group.

While the company pointed to some of its popular programmes like the Big Brother Naija as drivers of improved income, BH checks revealed that the company had effected at least two price increment in the last seven months.
For instance, in September 2021, the company implemented new rates for its offerings in Nigeria. About seven months after in April 2022, the company yet again announced new rates for its offerings, a move that sparked anger among its customers.

On April 1, 2022, subscribers started paying more for all Multichoice’s bouquets and premium package on DSTV. For instance, the premium package which used to cost N18,400, now goes for N21,000.

In the same vein, Compact Plus which cost N12,400 before the increment is now N14,250, while Compact now cost N9,000 instead of the former N7,900.

Also, Confam now cost N5,300, up from N4,615, while Yanga subscribers now pay N2,950 instead of the former subscription fee of N2,565.

Dstv package

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Package Old Price:  New Price
Xtraview N2300  N2,900
Business N2,669
Padi N1850   N2,150
Yanga N2,565   N2,950
Confam N4,615   N5,300
Compact N7,900   N9,000
Compact Plus N12,400   N14,250
Premium. N18,400   N21,000

The price increase also affected customers of the firm who are on the Gotv platform. The new rates are: Gotv Max N4,150 from N3,600; Jolli N2,800, up from N2,460; Jinja N1,900 from N1,640 and Lite N900 from N800.

Gotv package

Old price   New price

Max N3,600   N4,150
Jolli N2,460   N2,800
Jinja N1,640   N1,900
Lite N800   N900

The firm had blamed rising costs of inflation and business operations for the new increase that took effect from April 1, 2022.

“The price adjustments will enable us serve our customers better, offering them MORE CHOICE and GREAT VALUE all the time.

“We remain committed to making the best content from around the world accessible at varying price points to cater to the needs of individuals and families across the country”, Multichoice had said.

Meanwhile, many Nigerians who spoke with our correspondent on the just released financial report of Multichoice, threatened to boycott the services of the company if it continued to toe the line of constantly reviewing its prices upward.

“What do you expect to hear from them? Was is not September 2021 they effected a tariff hike, just seven months before that of April this year.
“Definitely, the added profit (increment) will lift the company’s growth profile. And we are not talking of the Aprils increment. By the time that is factored into the next report, the company will be smiling to the banks.

“This is callous and heartless on the part of Multichoice. It is like dancing naked on a dead man’s grave without having any remorse,” said Bello Ogundipe, a Lagos-based subscriber.

Another user, Segun Olutoye, said: “They keep saying the nation’s business environment is hostile and not conducive for doing business. Yet they have refused to close shop. Every year, they kept declaring profit.

“I don’t think the Federal Government or the agency protecting customer affairs exists anymore in Nigeria. How can you increase tariff exorbitantly within months only to declare mouthwatering profits few months after?,” demanded Olutoye.

In his own contribution, Toyin Odugbesan, a civil servant based in Sagamu, Ogun State, said: “DStv is using bribe as a means to kill other competitors in the industry, so they can have a monopoly market. It’s like they want to go back to where they came from.

“Some people in government raised the issue of the costly price for DStv bouquet, now no one is talking. They can declare gigantic profits as they want, but we need #dstvpayperview,” Odugbesan stated.

Another respondent, Tosin Onayiga, a journalist with a newspaper out-fit based in Lagos, lamented the incessant price increase by MultiChoice.

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“Despite the bad state of the economy, these people (Multichoice) are busy increasing tariffs and declaring huge profits. How do we explain that?

“We don’t even know who to call to come to our aid. The consumer protection council, even the Federal Government had compromised”, Onayiga lamented.

The Civil rights advocacy group, Human Rights Writers Association of Nigeria (HURIWA), in its own submission, asked the National Assembly to clamp down on the monopoly of the South African digital satellite television giant.

The National Coordinator of HURIWA, Emmanuel Onwubiko, condemned April’s increase in the prices of the company’s DStv and GOtv packages in Nigeria.

The group urged the Federal Government to compel MultiChoice to charge Nigerians per view or wield its big stick on the company for compliance failure.

“It is no longer news that Multichoice has consistently exploited billions of dollars from Nigerians in the last three decades since its operations in Nigeria in 1993.

“The South African company has also used unfair competitive strategies to force indigenous Nigerian competitors to close shop. The case of cable television firm, Telecomm Satellite TV, is still fresh in mind.

“The Chief Executive Officer/Managing Director, TStv Africa, Bright Echefu, had said that the company which announced the commencement of its operations on November 1, 2017, faced severe battle from other operators in the industry. The company is nowhere to be found now because of Multichoice unfair tactics.

“Why is it that only DStv currently broadcasts major football competitions in Nigeria, especially the English Premier League? Why hasn’t the Federal Government ended the monopoly enjoyed by MultiChoice despite the many rhetoric’s of the government to protect indigenous Nigerian businesses?

“It is worrisome that though the government said it had amended Nigeria’s broadcasting code to prevent DStv and others from monopolizing their channels and contents, the ugly trend still persists.

“Even StarTimes, the cable arm of the Nigerian Television Authority, has been stifled due to Multichoice aggressive monopoly which the government and lawmakers tolerate.
“This must stop. Nigerians are entitled to jobs and should be allowed to flourish in their own country”, Onwubiko said.

 

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