Multichoice Group, the African Pay-TV operator, has cited Nigeria’s challenging economic conditions as a key factor in an 18% decline in active DStv subscribers. This revelation was made in the company’s financial results for the fiscal year ending March 31, 2024, where it reported an overall 9% decline in its subscriber base.
The decline in Nigeria significantly impacted the Rest of Africa segment, reducing active subscribers by 13% to 8.1 million from 9.3 million in 2023. Multichoice noted that economic pressures compelled mass-market customers in countries like Nigeria to prioritize essential needs over entertainment, contributing to the subscriber downturn.
“The group’s 9% decrease in active subscribers was primarily driven by a 13% decline in the Rest of Africa business, as countries such as Nigeria faced economic hardships,” the company stated. Conversely, its South African operations showed more resilience, with a 5% decline.
Economic Challenges and Strategic Adjustments
Multichoice attributed Nigeria’s subscriber decline to economic factors despite implementing three price increases over the past year. Factors cited include the removal of fuel subsidies, sharp currency depreciation, soaring inflation surpassing 30%, and significant middle—and upper-class emigration. These issues collectively reduced Nigeria’s contribution to the Rest of Africa’s revenues, declining from 44% to 35%.
To mitigate these challenges, Multichoice shifted its focus in the Rest of Africa region from subscriber growth to safeguarding profitability and cash flows. The company implemented cost-saving measures such as reducing decoder subsidies by 46% year-over-year and slashing selling, general, and administrative costs by ZAR500 million. These initiatives contributed to a 48% year-on-year increase in trading profit to ZAR1.3 billion.
Subscriber Dynamics Across Markets
The subscriber decline was not limited to Nigeria, as Multichoice reported a 5% drop in active subscribers in its home market of South Africa. The company attributed this decline to frequent power outages experienced throughout the year, which deterred potential subscribers without backup power solutions.
Despite challenges, Multichoice noted some stability in its Premium Bouquet subscriber base due to targeted retention efforts. However, the mid-market Compact tier faced significant declines, influenced by macroeconomic pressures, load-shedding impacts, and reduced decoder subsidies.
Recent Pricing Adjustments and Legal Issues
Amid rising inflation, Multichoice raised prices for its DStv and GOtv bouquets greatly in the past year, most recently in April 2024. This move faced legal opposition, resulting in a N150 million fine from the Competition and Consumer Protection Tribunal for defying a court order to delay implementation. Multichoice has expressed intentions to appeal this decision.
