2 weeks Ago By Guardian Nigeria
Firm blames inflation for subscription slump Pay-TV operator, Multichoice Group, has lost about 243,000 subscribers across its DStv and GOtv services in Nigeria within six months from April to September, 2024. The South Africa firm, which disclosed this in its Interim Financial Results for the six months ended September 30, 2024, released yesterday, blamed the high inflation in Nigeria, which forced many subscribers to jettison subscription for other more life saving factors including food, electricity among others. Earlier, Multichoice had reported the loss of 18 per cent of its Nigerian subscribers in its financial report for the year ended March 2024.
The company added that the pressure on its subscriber base in Rest of Africa Operations continued from the previous year leading to a loss of 566,000 subscribers across the operations in the six months under review. While noting that the subscribers lost in the last six months was a decline compared with the 803,000 lost in the previous six months, Multichoice revealed that two markets, Zambia and Nigeria accounted for the lion’s share of the loss. According to the firm, “With the Rest of Africa business having seen a decline of 803k subscribers in 2H FY24, this rate of decline slowed to 566k in 1H FY25.
“Of this decline, 298k related to Zambia and 243k related to Nigeria, with remaining markets on the continent reflecting only a minor decline of 25k,” the company stated in its financial results. “While inflation is blamed for the loss in Nigeria, the company attributed the loss in Zambia to drought-driven power outages of up to 23 hours a day.” Reacting to the development, MultiChoice Group CEO, Calvo Mawela, said the company is facing its most challenging operating conditions in almost 40 years.
To generate returns, he said the Group has been proactive in its focus to “right-size” the business for the current economic realities and industry changes. According to him, while operating across Africa typically subjects the group to currency moves, abnormal currency weakness over the past 18 months has reduced the group’s profits by close to R7 billion. “Combined with the impact of a weak macro environment on consumers’ disposable income and therefore on subscriber growth, it required the Group to fundamentally adjust its cost base – which is exactly what has been done.
“We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year. “We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives. The Group’s liquidity position remains strong, with over ZAR 10 billion in total available funds,” he said.
Mawela said the Group is also adjusting to global pay-TV challenges as streaming services, the rise of social media, and changing consumer preferences impact the traditional broadcast business. According to him, Showmax, which reported 50 per cent growth YoY in its paying customer base, strategically positions the business to actively participate in the streaming revolution as it gains momentum across Africa. To create sufficient capacity and drive growth, he said the group stepped up its investment in this business by an incremental ZAR1.
6 billion during the interim period..
