Multichoice Adapts to Economic Pressures as Nigerian DStv Subscribers Decline

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Multichoice Group, the leading African pay-TV operator, has cited economic difficulties in Nigeria as the primary reason for an 18% drop in its DStv subscribers in the country.

This decline significantly impacted the company’s overall subscriber base, leading to a 9% decrease across its operating regions. The detailed figures for Nigeria were aggregated under the ‘Rest of Africa’ category, which saw a 13% reduction in active subscribers from 9.3 million in 2023 to 8.1 million.

The company’s financial report for the year ending March 31, 2024, highlighted several economic challenges faced by Nigerian consumers. These included the removal of fuel subsidies, sharp currency depreciation, inflation exceeding 30%, and increased emigration among the middle and upper classes.

These factors led to a prioritisation of basic necessities over entertainment, reducing Nigeria’s contribution to the Rest of Africa revenues from 44% to 35%.

In response to these economic pressures, Multichoice has shifted its strategic focus from subscriber growth to maintaining profitability and cash flow.

The company implemented several cost-saving measures, such as reducing decoder subsidies by 46% year-on-year (ZAR1.3 billion) and cutting selling, general, and administrative costs by ZAR500 million. These initiatives enabled the Rest of Africa business to increase its trading profit by 48% year-on-year to ZAR1.3 billion.

The branding implications of Multichoice’s strategy underscore its agility in adapting to adverse economic conditions. The company’s ability to pivot and implement cost-saving measures while maintaining a strong market presence demonstrates a robust approach to safeguarding its brand value and financial health.

This adaptability is crucial for sustaining the brand in the volatile African market.

However, Multichoice faced legal challenges with its recent price hike. A Competition and Consumer Protection Tribunal in Abuja issued an order restraining the company from implementing the new subscription prices, which Multichoice ignored, resulting in a N150 million fine and an order to provide one-month free subscriptions to Nigerian customers.

This situation highlights the complexities and regulatory hurdles the company faces in maintaining its market position.

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