South African pay-TV giant MultiChoice has seen a drop in Nigerian subscribers, reporting a loss of 243,000 customers from April to September 2024.
This decline, revealed in the company’s interim financial report released on Tuesday, follows Nigeria’s skyrocketing inflation rate, which has surpassed 30%.
Increasing costs of essential goods, such as food, fuel, and electricity, have stressed household budgets, leading many customers to discontinue their DStv and GOtv subscriptions.
MultiChoice Group’s CEO, Calvo Mawela, described these conditions as some of the most challenging in nearly four decades. Nigeria’s inflation has been a persistent issue for the company, contributing to the sharp decline in its subscriber base and prompting price adjustments for its services.
Within the past 12 months, MultiChoice Nigeria raised its subscription prices on three occasions to keep up with operational expenses and currency fluctuations, with the latest increase in May 2024.
The company’s operations in Africa have been hit by similar economic challenges. Across the continent, MultiChoice reported a loss of 566,000 subscribers within the first half of the financial year.
Zambia and Nigeria were among the most affected, accounting for over 95% of the overall decline, with Zambia experiencing a loss of 298,000 customers amid extensive power outages attributed to drought.
This continuous drop follows a reported decline of 803,000 subscribers in the second half of the previous financial year, pointing to the sustained impact of regional economic pressures on the company.
The competition from global streaming services has compounded MultiChoice’s challenges, as consumers increasingly shift towards on-demand content.
In response, the company is investing heavily in Showmax, its streaming service, allocating an additional ZAR1.6 billion in the recent quarter.
Showmax has reported a 50% growth in its user base year-over-year, becoming a good component in MultiChoice’s strategy to compete in the growing African streaming market.
Despite the setbacks, MultiChoice’s Mawela noted that the company expects to return to a positive net equity position by November 2024, partly due to cost-cutting measures and favourable liquidity, with over ZAR10 billion in available funds.
This expected turnaround follows a period of technical insolvency, largely due to currency depreciation in several African markets, which has eroded the group’s profits by nearly R7 billion over the past 18 months.
In a regulatory setback, MultiChoice faced some issues in Nigeria this year over its latest price hike, with the Abuja-based Competition and Consumer Protection Tribunal issuing a fine of N150 million for ignoring a restraining order on the new pricing structure.
The Tribunal’s ruling also mandated a one-month free subscription for Nigerian DStv and GOtv customers, a directive aimed at compensating subscribers affected by the price increase.
