PayTV company, MultiChoice, has decided to reduce its subscription fees in some of its key markets across Africa. The company intends to cut subscription rates of DSTV and GOtv in selected countries but Nigerian subscribers will not be among the beneficiaries.
Subscription prices are expected to remain the same in Nigeria, as MultiChoice’s plan is for the countries in the East Africa region. The countries on the list include Uganda, Kenya, Tanzania and Mozambique.
MultiChoice increased subscription rate in Nigeria last year. The move provoked subscribers who protested the price hike on social media but the complaints weren’t enough to force MultiChoice to revoke the price change. The Federal Government later intervened on behalf of Nigerian subscribers, and the case remains in court.
In an interview, the Group Executive Head – Corporate Affairs for MultiChoice Africa, Reatile Tekateka, explained the reasons why the price reduction will only affect the subscribers in the selected countries. According to him, the impact of local dynamics on cost structures determines subscription price.
“Not all markets where MultiChoice Africa operates will have the same price changes as each country has different cost structures influenced by local dynamics such as inflation, content costs, foreign exchange rates, local taxes and overheads required for each business.
“These are taken into account when setting prices for DStv and GOtv packages. We’ve done a lot of research into what pay-TV costs in other parts of the world and we believe that our DStv and GOtv services offer good value for money in the countries in which we operate,” Tekateka told TVwithThinus.
The price cut will be effective from September this year. According to the report, the reductions are:
• Uganda: DStv monthly subscription fees in Uganda will be cut by about 30% for some packages. Note that the price of DStv Premium, DStv Compact Plus, DStv Compact and DStv Family are all being reduced as well.
• Kenya: The biggest cut is expected to be in Kenya where subscription price reduction will be between 5% to almost 37%. It was reported that DStv Premium in Kenya will see a monthly price reduction of 5% on the most expensive monthly package, while DStv Compact Plus will decrease by 13.46%, DStv Compact will go down by 21% and DStv Family will see a whopping 36.84% decrease. DStv Access will fall by 5%.
• Mozambique: DStv Portuguese packages that include DStv Bue, DStv Grande+, DStv Grande and DStv Facil will be reduced as well, while subscription fees for DStv Business as well as GOtv Plus and GOtv Lite will increase.
Why the company is reducing prices: MultiChoice is reducing its prices in the countries because Startimes reduced its subscription rate in Kenya five months ago. This is MultiChoice’s way of responding to the competitive price Startimes offered pay-TV subscribers.
Why Nigeria is not among: Apart from the fact that Nigeria is not a member of the East African region, the difficulty companies experience in the process of doing business in the country has been a huge challenge. This is the reason the prices of goods and services are mostly higher in Nigeria compared to other countries.
The cost of doing business is also a problem for multinational companies in Nigeria as they need basic amenities to run their businesses effectively. These amenities are, however, provided by governments in other countries. This is the reason MultiChoice is able to operate a pay-as-you-view package in some countries.
Though Nigeria is the third-largest pay-tv penetration market above Kenya, Uganda and Mozambique which will be enjoying the price cut, MultiChoice is still ignoring the call by Nigerian subscribers for price reduction and the operation pay-per-view services.
Also, Nigeria’s Return on Assets (RoA) is on the rise, and the country is well above other countries (apart from South Africa) in Africa on MultiChoice’s subscription revenue by country. This is according to MultiChoice Financial Year 2019 report and as shown in the images below.
So, as long as the Nigerian government doesn’t create ease of doing business, curb the hostility companies are experiencing in the market, companies like MultiChoice will continue to share or transfer their extra-cost of operation burden to Nigerian consumers while lifting that of other countries.
Note: According to the MultiChoice FY 2019 report, Nigeria has the highest price increase across Premium: Premium and Compact Plus bouquets, and Mid-market: Compact and Commercial bouquets – they rise 7% and 8% respectively.
(Nairametrics)
