Thoughts on the Multichoice Cable Tv Price Increases
Money Palaver
By George Eze Emeghara.
Multichoice Nigeria Ltd has been in the news. The company is behind the DStv and GO tv brands which are the dominant cable television brands in the country.
A few weeks ago the company announced that it would be adjusting the prices at which it offers their products and services upwards with effect from April 1, 2022.
Several companies doing business in these difficult times had done the same thing so it was not unusual.
Many of their subscribers did not think so and protested against the proposed increases.
Some went to court, and the Senate, the highest legislative body in the land, debated and ruled on the matter.
At about the same time that Multichoice announced the proposed increase, the government also announced the withdrawal of the subsidy on electricity tarriffs.
This meant that Nigerians would pay more for electricity.
This disclosure did not generate anywhere near the uproar the announcement Multichoice did.
The Senate ruled that Multichoice could not raise their tarriffs.
It even asked them to reduce the current cost of their services in view of the “economic situation in the country.”
In addition, the Senate ordered the company to introduce Pay As You Go and Pay Per View services immediately.
Shortly after this, a Competition and Consumer Protection (CCP) tribunal sitting in Abuja ruled that the company could not increase its prices following a suit filed by a legal practitioner on behalf of himself and people he described as “a coalition of Nigerian consumers of Multichoice products and services. “
The response of members of the public to the proposed increase has been surprising. Obviously Multichoice and its services have become very important to many Nigerians.
However probably due to the central role the company’s services now play in their lives, the subscribers who are fighting the tarriff increase appear to have forgotten a few things.
Cable TV is not a public utility. It is not an essential service. It is not mandatory that people must watch Cable TV. There are alternatives including state and privately owned TV stations which they can watch for free.
The company providing the service is a private company set up to make profit for its shareholders and it is within its rights to raise prices as it sees fit to cover its costs.
It is amazing that the companies that produce every day consumer items such as beer, cement, flour, noodles, and virtually every other item have raised their prices to reflect the realities of the times without the Senate or any court interfering with their decision to do so.
Those who want to compel Multichoice not to raise their tarriffs are barking up the wrong tree. They should not blame Multichoice. Rather, they should blame are those who manage the rate at which the naira exchanges for the dollar.
The DSTv subscription rate is about 50 Dollars a month. It has been in that range for a long time.
In 1998 when the dollar exchanged for about 80 naira to the dollar, the monthly DSTv subscription rate was a little under 4000 naira
As the naira continued to slide the amount was adjusted to reflect the downward slide.
Today, with the official rate of exchange at almost 500 naira to the dollar, the monthly subscription rate has climbed to about 20,000 naira which is less than 50 dollars.
Since most of their expenses are in dollars, it is important that their charges keep pace with the exchange rate
This fact, more than anything else, must have informed their decision to raise their tarriffs.
The same situation applies to their GoTV package which was introduced to capture those who could no longer afford the regular DStv package owing to rising subscription rates brought on by a perpetually downward sliding exchange rate.
The protesting subscribers also demanded the introduction of Pay Per View and Pay As You Go services.
Apparently, they don’t appreciate the fact that Pay Per View could turn out to be more expensive than the present arrangement on the long run.
They can ask their friends who live in countries where Pay Per View is in use.
Many of them now prefer to watch programs on their computers instead of on their televisions.
It is much cheaper to do so thanks to their fast and cheap broadband internet connection.
With Pay per view any program or event one wants to watch would have to be paid for upfront.
At present, some times as many as four soccer matches are shown at once on the Premium bouquet and a viewer can roam from channel to channel as he tries to keep up with all the matches.
With Pay Per View, the viewer is restricted to just the channel he have paid for. If a viewer wants to have the privilege of hopping from one program to the other, they have to pay to view all the four matches. That might come to a tidy sum.
Those subscribers clamouring for Pay As You Go say they don’t get their money’s worth due to the frequent blackouts and the long hours they spend away from their television sets.
They want to pay for only the time they spend watching their TV sets. They’re say that’s how it is done abroad.
Again, what they are asking for may not be necessarily cheaper than what they have now.
The rates for Pay As You Go packages are usually higher than those for Contract or Post Paid. This can be borne out by the rates the phone companies charge those of them on Pay As You Go and Post paid packages.
For those who say they are not always at home or there is no power to watch the programs, Multichoice should not be held liable for the poor power supply situation or their gruelling work schedule of which gives them little time to watch the service they subscribed to.
The objective here is not to hold brief for Multichoice or to justify their tarriff increase. Rather, it is to explain the issues more clearly so the protesting subscribers can be more careful about what they wish for, in order not to worsen their situation They could be “jumping from frying pan into fire” as our people would say, if their wishes are granted.
The purpose here is also to discourage the government and its agencies from interfering and attempting to dictate or fix prices for privately owned companies.
This is especially so at this time when the government should be doing all it can to encourage foreign investors and attract investments.
No one would want to invest in a country where the government interferes or seeks to control the price at which they sell their goods or services.
What is happening to Multichoice sends the wrong signals.