South African pay-TV giant MultiChoice has recorded a subscriber loss in Nigeria, reporting that it lost 243,000 customers between April and September 2024.
The decline was revealed in the company’s interim financial report released on Tuesday, as inflation in Nigeria exceeds 30%. Rising prices of essentials such as food, fuel and electricity have put a strain on household finances, leading many customers to cancel their DStv and GOtv subscriptions.
MultiChoice Group CEO Calvo Mawela described these conditions as some of the most challenging he has seen in almost four decades. Inflation in Nigeria has been an ongoing issue for the company, contributing to a sharp decline in its subscriber base and necessitating price adjustments to its services.
In the past 12 months, MultiChoice Nigeria has increased subscription prices three times to address operational costs and currency fluctuations. The most recent increase was in May 2024.
The company’s African operations have been hit by similar economic challenges. MultiChoice reported a decline of 566,000 subscribers across the continent in the first half of the financial year. Zambia and Nigeria were the hardest hit, accounting for more than 95% of the overall decline. In Zambia, widespread power outages due to drought led to the loss of 298,000 customers.
This continued decline follows a decline of 803,000 subscribers reported in the second half of the previous financial year, highlighting the impact that regional economic pressures continue to have on the company. Competition from global streaming services exacerbates MultiChoice’s challenges as consumers increasingly move to on-demand content.
In response, the company has been investing heavily in its streaming service Showmax, spending an additional R1.6 billion in the last quarter. Showmax has reported a 50% year-on-year increase in its user base, making it a good building block in MultiChoice’s strategy to compete in the growing African streaming market.
Despite the setbacks, MultiChoice’s Mawela said the company expects to return to a positive net worth position by November 2024, with available funds exceeding R10 billion, due in part to cost-cutting measures and favourable liquidity. This expected recovery comes after a period of technical bankruptcy, mainly due to currency devaluations in several African markets, which reduced group profits by around R7 billion over the past 18 months.
As a result of regulatory setbacks, Nigeria’s MultiChoice has faced several challenges this year related to recent price hikes. The Abuja-based Competition and Consumer Protection Tribunal fined the company 150 million naira for breaching a preliminary injunction on the new pricing structure. The court’s ruling also gives DStv and GOtv customers in Nigeria a one-month free subscription, an order aimed at compensating subscribers affected by the price hikes.
