WHEN MultiChoice, Africa’s leading entertainment platform, announced price adjustment on its DStv and GOtv packages on April 24, all hell broke loose. That has become a tradition. John Ugbe, the Chief Executive Officer, CEO, informed Nigerian clients that on Wednesday, May 1, 2024 the company will adjust prices across all packages. The 25 per cent price hike meant that the DStv premium package, for instance, which hitherto cost N29,500 monthly will now dig a deeper hole in the pockets of customers at N37,000.
Ugbe, not unmindful of the impact of the adjustment explained the inevitability and made a pledge: “We understand the impact this change may have on you – our valued customer, but the rise in the cost of business operations, has led us to make this difficult decision. It remains our mission to provide the best entertainment and viewing experience to you and we are committed to continue delivering high-quality content and unparalleled service.”
But some people were not impressed. Apparently, lying in wait for the price adjustment, they bounced on the company with such ferocity that has left many dispassionate observers wondering if there is more than meets the eyes. Not only have they called for the boycott of the company, a court case has been instituted.
MultiChoice has always been singled out for excoriation where other companies are given a free pass. In the past, there were calls on the Senate, House of Representatives, National Broadcasting Commission and the Federal Competition and Consumer Protection Commission, FCCPC, to regulate prices charged by MultiChoice. Last year, the National Association of Nigerian Students, NANS, threatened to picket the company over price adjustments.
This time, hardly had the announcement been made than the boycott campaign started. On April 29, one Festus Onifade, upped the ante when he went to the Competition and Consumer Protection Tribunal, CCPT, sitting in Abuja to seek a restraining order against MultiChoice, a plea that was promptly granted as the three-member tribunal, presided over by Saratu Shafii, with Thomas Okosun and Dr. Umar Duhu, as members, gave an interim order restraining Multi-Choice Nigeria Limited from increasing its tariffs and cost of products and services pending the hearing and determination of the motion.
Onifade’s contention was that the price adjustment will negatively affect his rights. Interestingly, the same man filed a similar suit at the same CCPT in 2022. His case was dismissed by the tribunal. So, what does he intend to achieve this time? Besides, in 2015, two lawyers – Osasuyi Adebayo and Oluyinka Oyeniji – also approached a federal high court sitting in Lagos to challenge MultiChoice’s right to increase prices. The judge ruled that they were not obliged to use MultiChoice’s services.
But these vicious attacks on the right of a private company to make sound business decisions in a very challenging economic environment calls for interrogation more so when other businesses are not equally harangued.
MultiChoice Nigeria, a joint venture between MultiChoice Africa and Nigerian businessman, Adewunmi Ogunsanya, SAN, is Nigeria’s pioneer pay TV service provider having launched the first digital satellite broadcasting service in 1993.
Why would any right thinking citizen wish that a company which from its humble beginnings of about 30 employees, presently has well over 1,000 employees while indirectly supporting over 20,000 more jobs, goes under? Since inception, MultiChoice Nigeria has directly and indirectly contributed N636.4 billion to the Nigerian economy. In fact, the 2019 Socio-Economic Impact Report from AccentureTM estimated that between 2016 and 2019, the company contributed N363 billion directly to Nigeria’s GDP, created economic value of N57.1 billion through new businesses, paid N39.6 billion in taxes and fees and spent N49.5 billion on content and local production facilities.
Why will anybody be offended that MultiChoice adjusted the prices of its services and products knowing full well how challenging and hostile the business environment has become since the sudden subsidy removal on May 29, 2029? As if that was not bad enough, recently, electricity tariff per kilowatt also went up from N66 to N255, a 300 per cent hike. The Naira has been devalued significantly with the attendant foreign exchange rate volatility.
On March 26, the Central Bank of Nigeria further hiked the Monetary Policy Rate, MPR, also known as interest rate, from 22.75 per cent to 24.75 per cent. That was the second consecutive hike after February’s 400 basis point increase with asphyxiating impact on inflation, which according to the National Bureau of Statistics, NBS, rose to 33.20 per cent in March from 31.70 per cent in February even as food inflation stands at an unprecedented 40.01 per cent.
Expectedly, all businesses in Nigeria, without exception, are reacting accordingly. For three consecutive months – February, March, April – Nigerian Breweries, NB, Plc. upwardly reviewed prices of 45 products attributing the move to “rising input costs and the need to mitigate the impact”. In March, streaming giants, Netflix, announced a review of its prices with effect from April 1. Earlier, International Breweries, bottlers of Hero and Trophy lager brands, citing escalating cost of doing business, increased prices across its product portfolio. Another brewing giant, Guinness Nigeria Plc., also announced a new price regime.
Last year, cab service providers, Uber and Bolt, made significant adjustment in prices in response to the fuel subsidy removal. Airlines have tripled their fares in the last 10 months and still counting. Healthcare is similarly impacted, with prices of medications shooting through the roof. School fees at all levels, including those of Federal Government-owned universities, have gone up. For instance, the University of Ibadan recently raised fees for new students to N230,000 and N412,000, depending on the course of study, from N64,000 and N69,000 paid last year. That was a 453 per cent and 750 per cent hike.
Curiously, no other business concern has been called out like MultiChoice. Why is it a crime for MultiChoice to charge market-reflective rates for its products and services when it is not for others? Why would a National Assembly that does not see anything wrong in government arbitrarily removing petrol subsidy and hiking electricity tariff frown at a private business increasing prices of its products in order to survive?
MultiChoice Nigeria is a private business with the inalienable right, in a free market economy, to determine the prices of its services and government has no power to regulate prices as the former Executive Vice-Chairman of the Federal Competition Consumer and Protection Commission, FCCPC, Dr. Babatunde Irukera, explained in 2022.
Besides, MultiChoice is a lifestyle service provider that does not enjoy a monopoly in the market. Competitors like StarTimes, which just secured the non-exclusive broadcast rights for the Spanish topflight league, LaLiga EA Sports and LaLiga Hypermotion, for the next five seasons; SLTV, with well over 50 HD channels including 10 Sports channels that show live football matches from the Premier League, Champions League, Laliga, Seria A, and UEL, abound.
So, rather than wishing a company that has changed the face of entertainment in Nigeria for over 25 years dead, those not comfortable with its new price regime have viable options. In any case, StarTimes has raised its prices twice in the last one year. It smacks of hypocrisy when those who didn’t raise a whimper then are crying wolf now that MultiChoice, which is not immune from the domestic economic turmoil, does same.
It is a pity that rather than innovating, competitors in the Pay TV industry think they can survive by running MultiChoice out of town. Pressuring the FCCPC to regulate prices or impose a billing model the company is also a no-brainer as Irukera also once explained.
MultiChoice is not the reason why Nigeria’s economy is in dire straits and blaming it for the country’s economic woes is not only unfair but mischievous. Expecting the costs for DStv services to remain unchanged when the cost of doing business in Nigeria is skyrocketing is unrealistic. When seedy campaigns of calumny such as is being waged against MultiChoice are driven by mischievous business rivals, the society is worse for it.
Rather than further stifling an economy that is already on its knees by calling for the boycott of one of the few companies weathering the storm of economic adversity, the wolf criers should learn to pay for what they can afford and leave MultiChoice alone.
•Written By Ikechukwu Amaechi
