South African Pay-TV giant MultiChoice Group claimed that despite planning to increase prices just once in 2023, worsening macroeconomic conditions in the Rest of Africa markets including Nigeria, Kenya and Malawi forced its hand.
Two price increases in 2023 proved unpopular with its customers. In Nigeria, a tribunal claimed MultiChoice did not give customers adequate notice before increasing prices while in Malawi, the company temporarily shut down its operations after the regulator barred it from increasing prices.
However, Calvo Mawela, the company CEO, said currency devaluation in those markets forced its hands and made price increases inevitable. Despite raising subscription fees, the revenue contribution of major markets like Ghana and Nigeria declined significantly from 44% to 35%.
Despite these struggles, the pay-TV company will not deprioritise cable in favour of other business segments like streaming or fintech.
“Pay TV remains the mainstay of our operations, we must safeguard the business,” said Mawela.
With $217 million in losses for FY24, MultiChoice will focus on cutting costs for the next year. In the last year, it saved over R1 billion in costs by reducing subsidies on decoders and renegotiating content pricing.
“The group will further accelerate its cost-saving programme [with a target of ZAR2.0bn for FY25] and reduce capital outlays, prioritise customer retention, leverage popular sports renewals, develop its local content pipeline further and leverage promising traction in its new platforms and services,” the company said in a statement.
It will hope those initiatives will move it towards profitability. “This is not a wishlist,” said Tim Jacobs, the company’s Group CFO on an earnings call.
“We have a multi-year cost reduction program. This combined with ongoing retention initiatives will help us maintain profitability in the Rest of Africa.”
