African pay-TV operator, MultiChoice Group, said its Nigerian subsidiary lost 243,000 subscribers across its DStv and GOtv services between April and September this year.
According to its financial result for the year ended September 30, 2024, published yesterday, MultiChoice said the high cost of food, electricity and petrol forced many of its customers to abandon their decoders.
It said Nigeria and Zambia recorded the largest share of subscriber loss, adding that the pressure on its subscriber base in the Rest of Africa (RoA) operations continued from the previous year leading to a loss of 566,000 subscribers across the operations during the six months under review.
The pay-Tv service provider also lost five per cent of its customers in its country home of South Africa.
“The group’s linear subscriber base declined by 11 per cent or 1.8million subscribers YoY (year-on-year) to 14.9million active subscribers at 30 September 2024.
“The loss in the RoA has been primarily due to the significant consumer pressure in Nigeria, where inflation has remained above 30per cent for the majority of the last 12 months and, more recently, due to extreme power disruptions in Zambia.
“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,”MultiChoice said.
The company said the continued naira depreciation against the dollar has resulted in further losses on non-quasi-equity loans.
The group held $11million in cash in Nigeria at period-end, down from $39million at end FY24, a consequence of consistent focus on remitting cash, the impact of translating the balance at the weaker naira and the write-off of the $21million receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated.
Commenting on the company’s results, its Group Chief Executive Officer (CEO), Calvo Mawela, said the company has been facing its most challenging operating conditions for almost 40 years.
To generate returns, Mawela said the company has been “proactive in its focus to right-size the business for the current economic realities and industry changes”.
He said 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 ZAR10bn in total available funds,” Mawela said.
On May 1, MultiChoice implemented an increase in subscription prices for DStv and GOtv packages — despite the tribunal ruling against it on April 25.
The company has faced legal issues in Nigeria’s court.
