Multichoice Group, the South African pay-TV operator, announced that its Nigerian division, Multichoice Nigeria, experienced a loss of 243,000 subscribers across its DStv and GOtv services during the six-month period from April to September 2024.
Gatekeepers News reports that this information was included in the company’s Interim Financial Results for the period ending September 30, 2024, released earlier this week.
The decline in subscribers has been attributed to Nigeria’s high inflation rate, which exceeds 30%. This economic pressure, largely due to the rising costs of food, electricity, and fuel, has led many customers to discontinue their services.
Previously, Multichoice reported an 18% reduction in its Nigerian subscriber base in its financial outcomes for the year ending March 2024. Additionally, the company indicated that similar pressures affected its subscriber numbers in the Rest of Africa Operations, where a total of 566,000 subscribers were lost over the same six-month timeframe.
Although the recent loss of subscribers marks a decrease from the 803,000 who left during the previous six months, Multichoice highlighted that Nigeria and Zambia were significant contributors to this decline in subscriber numbers.
“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.
In his comments on the company’s results, 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 ZAR10bn 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% 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.
