Multichoice Group, Africa’s leading pay-TV operator, has reported an 18% decrease in its DStv subscriber base in Nigeria, attributing the decline to ongoing economic difficulties in the country. This drop has had a substantial impact on the company’s overall subscriber numbers, resulting in a 9% decrease across its operating regions.
According to the company’s financial report for the year ending March 31, 2024, Nigeria’s economic troubles have played a major role in the subscriber decline. Key issues include the removal of fuel subsidies, sharp currency depreciation, inflation exceeding 30%, and a notable rise in emigration among the middle and upper classes. These factors have led to a shift in consumer spending priorities, favouring necessities over entertainment.
The economic downturn has significantly affected the Rest of Africa region, where active subscribers fell from 9.3 million in 2023 to 8.1 million—a reduction of 13%. Nigeria’s contribution to the Rest of Africa’s revenue has decreased from 44% to 35%.
In response to these economic pressures, Multichoice has pivoted its strategy from focusing on subscriber growth to emphasising profitability and cash flow. The company has introduced several cost-saving measures, including a 46% reduction in decoder subsidies (equivalent to ZAR1.3 billion) and a ZAR500 million cut in selling, general, and administrative expenses. These actions have allowed the Rest of Africa business to boost its trading profit by 48% year-on-year to ZAR1.3 billion.
Multichoice’s ability to adapt to economic challenges while maintaining a strong market presence underscores its resilience and strategic agility. However, the company has faced legal issues related to recent price hikes. The Competition and Consumer Protection Tribunal in Abuja issued an order restraining Multichoice from implementing the new subscription prices. The company’s non-compliance with this order led to a N150 million fine and a directive to provide one month of free subscriptions to Nigerian customers.
The current situation highlights the complexities and regulatory challenges Multichoice faces in maintaining its market position amidst economic turbulence. The company’s strategic response and branding decisions will be crucial in navigating these obstacles and sustaining its presence in the volatile African market.