Multichoice, the subscription management arm of leading satellite pay television, DStv, capitalises on its near monopoly of the Nigerian market to arbitrarily increase subscription charges
When DStv won the broadcast rights of the English Premier League, EPL, for Nigeria last year, it was, indeed, a turning point for the satellite television owners, Multichoice. For instance, Richard Ibilola, an architect and football enthusiast, wasted no time in acquiring a DStv decoder to satisfy his appetite for watching the beautiful game. To further encourage new subscribers to come on board, Multichoice recently embarked on promotional sales, which saw it reducing the cost of acquiring its decoder to N9,000 from N29,000 with free installation.
With more subscribers in its net, Multichoice recently announced a six per cent increase in its monthly subscription rate, much to the chagrin of most of the subscribers, who view this as exploitative. Under the new rate, effective from April 1, subscribers to the High Definition, HD, Premium will now pay N12,400 up from N11,300. Subscribers to Premium Bouquet will pay N10,300 as against the previous N9,500. Subscribers on DStv Compact will pay N4,800 as against the previous N4,500, while Compact Plus subscribers will pay N7,000 from a previous N6,800. Those on DStv Family will pay a monthly fee of N2,800, up from N2,500. However, there is no increase in the N1,500 price of DStv Access bouquet.
“It is the shylock tendencies in them that they are now exhibiting,” an obviously livid Ibilola said. For him, until the monopoly of Multichoice is broken, Nigerians will continue to experience unnecessary increment in the cost of the service they render. In similar vein, Yinka Oshunkoya, a resident of Olodi Apapa, described the actions of the operator as “insensitivity” to the economic reality of Nigerians. At the moment, he is considering dumping his decoder in protest.
But Segun Fayose, head, corporate communications, Multichoice Nigeria, insists that the firm has never been a monopoly. Rather, it has only been going the extra mile to satisfy its customers and delivering premium quality service.
For him, the slight increase is not commensurate with what the service offers. For instance, Fayose recalls that the company moved from its previous W4 satellite to W7 to ensure better transmission, and has also added more than 20 new channels to its service. In terms of corporate social responsibility, CSR, Multichoice, he explained, has completed resort projects in 191 schools across 21 states. “When a rival company increased its rate from N3,500 to N6,000 when it had the EPL, nobody grumbled; that is over 80 per cent increase; we have only increased ours by six per cent; so our customers should bear with us,” he appealed.
A comparison in the subscription rate with some other African countries revealed that rates remain lower in Nigeria. In Kenya, for instance, the DStv offer includes 35 channels, a satellite dish, a decoder, a smart card and a cable and the customer is required to pay a six-month access subscription fee in advance, bringing the total minimum entry to about Sh10,000 or N18,354. DStv in that country has four content packages: Premium — Sh6,350 or N11,665 per month; Compact Plus — Sh4,000 or N7,346; Compact — Sh2,350 or N4,315 and Family, which costs Sh1,700 or N3,122 per month. In South Africa, DStv Premium goes for Rs 559 or N12,397, while Compact goes for Rs 246 or N5,456.
But Oshunkoya condemned in strong terms this comparison. “Have you put the per capital income of Nigerians into consideration? Besides, how are we even sure that the reasons for increasing the fees is true?” he queried.
Joseph Hundah, managing director, Multichoice, while giving reasons for the increase, explained that Nigeria’s inflation in the last two to three years, has been hovering above ten per cent. His company, he said, had in the last six years increased its subscription rate only twice. “We really have not been increasing our prices along the rate of inflation despite the fact that costs have been increasing at inflationary rate. Over and above that we also have the cost of acquisition of content and rights, which obviously pushes up the price of providing content. But the biggest contributor to the price increase is inflation, more than anything else; yet, the increase is still significantly lower than inflation,” Hundah noted.
However, the increase is not restricted to Nigeria alone. Hundah explained that some other countries are increasing more than the others based on the different cost levels they have, which is also tied to the rate of inflation in such areas. In South Africa, for instance, there will also be an increase in rates from April 1. “In Nigeria, Premium is growing by eight per cent, Compact is growing by about three per cent, Family by 12 per cent, Compact Plus by six per cent,” the Multichoice boss said, adding that the difference is because each bouquet has different kinds of content, and depending on how those contents are increasing in costs, which also affects the price increase.
Joseph Muagba, an engineer, agreed with Fayose. For him, even without the EPL, programmes on DStv are highly educative and entertaining and as such, its content cannot be compared to what other pay televisions offers. “If only for this, then I think the rate is still fair enough,” Muagba submitted.