Nigeria’s pioneer pay TV company squares up to the federal government over pricing.
South African Pay TV company, Multichoice (which runs DSTV), is not only increasing subscription rates across bouquets this summer, the company also intends to reduce its workforce in order to stay in business in Nigeria.
All of which has left the federal government of Nigeria fuming and exasperated.
“They said they are committed to keeping their business in Nigeria but are affected by currency devaluation and inflation rate.
“They said their fears are that they may lay off Nigerians in their employment if they have to remain in business,” Armstrong Idachaba, who is the Director-General of the National Broadcasting Commission (NBC), told the Independent newspaper.
“They gave examples of other companies that are folding up because of economic challenges.
“At the end of the day, we told them that no matter the excuse they have, we are not going to tolerate any loss of jobs. We frown heavily at any attempt to lay off Nigerians because of these excuses.
“Secondly, we are not tolerating any unnecessary price hike. We asked them how they intend to do the increase and they said they want to start with the premium and then move gradually to the other packages,” Idachaba added.
New DSTV prices
Oil rich Nigeria has devalued its currency twice in recent times, and the Naira has grown increasingly weak, no thanks to a slump in the price of crude oil in the global market and the coronavirus pandemic.
The federal government has also increased Value Added Tax (VAT) from 5% to 7.5%; and inflation now stands at 12.82%, according to latest data from the National Bureau of Statistics (NBS).
DSTV has announced a price increase–its second such increase in three months– to reflect current economic realities in Nigeria, it says, even though the House of Representatives has ordered the company not to effect a new price regime.
In text messages to subscribers this week, MultiChoice said DSTV Premium would move from N16, 200 to N18,400; Compact Plus from N10,925 to N12,400; Compact from N6,975 to N7,900; and GOtv Max users will now pay N3,600 instead of N3,280.
Chief Executive Officer of Multichoice Nigeria, John Ugbe, said the decision to increase prices was reached after a careful evaluation of the market and a review of the company’s business operations.
He said the company reviewed its prices due to inflation, increased content and operating costs, so it can continue to stay in business and deliver quality entertainment to customers.
“To arrive at the decision to adjust prices, we took into account many factors, including the impact on the customer, current inflation which stands at 12.82 percent, the highest in 27 months, content costs and efficiencies within the company,” Ugbe said.
Consumer protection commission kicks
The Federal Competition and Consumer Protection Commission (FCCPC) has also announced that it is investigating Multichoice for abuse of market powers and unfair practices.
“Upon credible information, public announcements by operators and consumer perception analytics, the FCCPC has opened an investigation into the conduct of dominant pay-TV service providers,” the statement from the FCCPC signed by its Director General, Babatunde Irukera, reads.
“Over the past 24 months, the FCCPC has conducted an investigation, pursued legal action in court, secured an injunction pre-empting price increase, entered specific orders regarding a provider, engaged in periodic surveillance and monitoring and more recently inquired into a purported tax increase by at least one provider.
“This investigation is in order to address the commission’s concerns and publicly expressed consumer dissatisfaction with pay-TV services.
“The scope of the inquiry includes, but is not limited to questions about unfair dealings, unreasonable and manifestly unjust contract terms, abuse of market powers, colourable pricing practices and other otherwise obnoxious or illegal conduct.
“Operators are invited to familiarise themselves with the Federal Competition and Consumer Protection Act (FCCPA) and statutory clarifications of their obligations to the FCCPC under S. 104 in addition to, and or irrespective of any obligations to other regulators.
“The commission will continue to pursue initiatives and efforts that promote and ensure fairness to all.”
Multichoice has run a near monopoly in poverty stricken Nigeria, since it pioneered digital satellite broadcasting operations in Africa’s biggest market in 1993.