MultiChoice Nigeria Loses 243,000 Subscribers as Living Costs Soar
Pay-TV Giant Reports Major Market Decline as Inflation, Power Costs Drive Customer Exodus
MultiChoice Group has reported a significant decline in its Nigerian operations, losing 243,000 subscribers across its DStv and GOtv services between April and September 2024. The pay-TV company attributes this exodus to escalating costs of living, including rising food prices, electricity tariffs, and fuel costs, which have forced many customers to abandon their subscriptions.
The decline in Nigeria, alongside similar losses in Zambia, contributed to a broader subscriber decline across MultiChoice’s Rest of Africa (RoA) operations, where the company lost 566,000 subscribers during the six-month period. Overall, the group’s linear subscriber base dropped by 11% year-on-year, representing 1.8 million subscribers, bringing the total active subscribers to 14.9 million by September 30, 2024.
Currency Challenges and Financial Impact
The company’s financial challenges have been compounded by the continued depreciation of the naira against the dollar, resulting in significant losses on non-quasi-equity loans. MultiChoice’s Nigerian cash holdings decreased substantially from USD39 million to USD11 million by the end of the period, affected by aggressive cash remittance efforts and the weaker naira exchange rate. The company also wrote off USD21 million in receivables following the liquidation of Heritage Bank.
Calvo Mawela, MultiChoice Group CEO, described the current situation as “the most challenging operating conditions for almost 40 years.” He noted that currency weakness over the past 18 months has reduced the group’s profits by nearly R7 billion, forcing the company to “fundamentally adjust its cost base.”
Despite these challenges, Mawela expressed optimism about addressing the technical insolvency issues, projecting a return to positive net equity by the end of November, supported by various initiatives. The group maintains a strong liquidity position with over ZAR10 billion in total available funds.
The company’s challenges in Nigeria were further complicated by recent regulatory issues. Following a controversial price increase implemented on May 1 for DStv and GOtv packages, despite a tribunal ruling against such action, MultiChoice was fined N150 million and ordered to provide one month of free subscriptions to Nigerian customers.
