Many comments on FB and LinkedIn on my piece on Multichoice (DStv, GOTv) and my position that Nigeria should not use Courts to determine the price of an imported product. I have written on this many times: “MultiChoice (DStv, GOtv) was not built with debt. But HiTv and TStv went through life via debts. In the media business, in Nigeria, that is very risky. It is nearly impossible to grow faster than your bank interest rate.” 

Indeed, controlling prices from the Court, while popular, will never improve our market systems. We have enough evidence that  the rascality of the court has cooled investments in the electricity sector. They want you to invest $millions and be paid nothing. So, the implication is that no investor wants to invest because the smart court has priced electricity before it is produced.

Check potable water also; some rates have not changed for years, making investors run away from the opportunities. Push for changes, people will go to court to block them. In one state, the last water rate was updated in 1997!

Bringing that mindset to TV and shows may not be helpful unless everyone is ready to watch the Ajonkwu festival of Ovim Abia State. That may not be bad except that the show is free! But until we do that, bashing Multichoice without going after the root cause of empowering local companies will not help the outcome, court or no court.

It is a popular thing to kick Multichoice. But that does not make it the right move. Indeed, I have never read of where the activists have gone to court to block increased prices of milk, bread, noodles, yam, etc. These are the essentials we should put our energy into, and fight prices.

As I noted here, the only way to deal with Multichoice is to increase competition, not via the court. The opportunity remains. Yes, while many  hail the Court for going after Multichoice, I want to throw it back to Nigerian governments: you need to build an ecosystem where great digital companies can thrive.

HiTV failed. TStv is struggling. DStv is winning territories. If you look at these companies, you will notice a clear catalytic difference: funding mechanisms. DStv was built by the largest purse in Africa, the unlimited Naspers of South Africa, which has so much money that it could buy all the publicly traded stocks in Nigeria with just 30% of the Group’s market cap. This is a company that battles Facebook and comes out as a winner. MultiChoice, though separated and traded differently now, connects to that heritage of wealth. At any point, Naspers has more cash on its balance sheet than …. (let me not make people feel bad).

Building A MultiChoice (DStv, GOtv) Challenger in Nigeria; HiTv, TStv Weakest Factors

Update: Telecom operators are planning to increase rates to manage the higher costs of delivering services in Nigeria. This goes back to the root cause of most recent price changes: cost of production is rising and companies are adjusting prices accordingly. Possibly, someone will go to court to stop them as was done in the case of DStv!

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) also says it is considering varying tariffs to some ‘unfriendly telecommunications states’ in order to accommodate their demands. ALTON is an association of major telecoms operators, including MTN, Glo and Airtel. The Chairman of ALTON, Gbenga Adebayo, told journalists on Thursday in Lagos that the high cost of energy and security of telecom workers was hampering its operations.

Poor Multichoice -you are going to pay in Euro and still collect the same rate in Naira despite the deteriorating Nigerian currency: “The Competition and Consumer Protection (CCP) Tribunal sitting in Abuja, ruling in the favor of the plaintiffs, restrained Multichoice Nigeria Limited from increasing its tariffs and cost of products and services scheduled to begin on April 1.”

I wish Nigeria would fight these pricing battles with a smarter option, and that means increasing supply. Controlling prices from the Court, while popular, will never improve markets. We have enough evidence that  the rascality of the court has cooled investments in the electricity sector. Check potable water also; some rates have not changed for years, making investors run away from the opportunities.

Bringing that mindset to TV and shows may not be helpful unless everyone is ready to watch the Ajonkwu festival of Ovim. That may not be bad except that the show is free!

Here is one thing to consider: “The cost of English Premier League broadcast rights has risen almost 8% to 9.2 billion pounds ($12 billion) for the next three seasons.” This means that the costs of these products are rising 8% (keeping forex constant) and by the time you add the currency impact, there is no way MultiChoice can stay in business without increasing rates, for an imported product in Nigeria.

Of course, this is not to support MultiChoice. But I find it offensive when the Court and government punish companies despite clear evidence that adjustment on prices is necessary. Who has not increased prices in Nigeria on imported products?

Court Stops Multichoice (DStv, GOtv) from Implementing Tariff Hike

Comment on LinkedIn Feed

Comment 1: Yes it’s a luxury but now laced as “essential” need of most homes. You haven’t mentioned(based your argument) that this increment would lead to pay rise for her employees or other stakeholders(commission for sales agents -offline and API) in this new increment stopped by the court; multichoice would be the only one smiling if the increment is successfully implemented – even the past increment hasn’t trickled down to these partners (I would like to know if I am in the dark here). Taxes are still same for them for now, only cost of production is the issue here which many firms (always) count raising pay for employees and commission as secondary in their books. Or these stakeholders don’t feel the bite of the evonimical crunch?

My Response: I am not sure you are responding to this post. I am not discussing employee wages. I am discussing cost of an imported product. More so, I am yet to read where Multichoice workers are demonstrating on low wages. Multichoice has the largest agency network in Nigeria. It is possible because it has the best compensation model. I am an academic and I do not have those sentiments: every imported product in Nigeria has increased price, it is unfair to expect Multichoice NOT to adjust prices. I understand that my position will not be popular but I will make the same case if it is Ovia, Dangote, Ayo or Ekekwe.

Another person on Comment 1: luxury is rarely essential. I’m not aware of a situation where luxury is classified as essential, without the loss of the premium that luxury attracts.

The faceoff between the Nigerian government, consumers and Multichoice Nigeria over hike in subscription tariffs, has continued to deepen. Nigerian consumers, backed by lawmakers, have been asking for a stable subscription price or pay-per-view billing.

Against this backdrop, the South African satellite TV provider, who is parent to DStv and Gotv, popular cable TV service providers in Nigeria, has been on and off the court and the chambers of Nigeria’s National Assembly.

The situation took a new turn after some Nigerians filed a fresh complaint following Multichoice’s recent move to once again increase tariff.

The Competition and Consumer Protection (CCP) Tribunal sitting in Abuja, ruling in the favor of the plaintiffs, restrained Multichoice Nigeria Limited from increasing its tariffs and cost of products and services scheduled to begin on April 1.

The three-member tribunal, presided over by Thomas Okosun, gave the order following an ex-parte motion moved by Festus Onifade, a legal practitioner, on behalf of himself and the Coalition of Nigeria Consumers.

Other members of the tribunal include Sola Salako Ajulo and Ibrahim EL-Yakubu.

The News Agency of Nigeria (NAN) reports that in the suit marked: CCPT/OP/1/2022, Multi-Choice Nigeria Limited and Federal Competition and Consumer Protection Commission (FCCPC) are 1st and 2nd respondents respectively.

The motion ex-parte filed by the applicants on March 29 was brought pursuant to Section 39 (1) & (2) of FCCPC Act 2018; Order 26, Rule 5 (2), (3) & 26 Rule 6 (1) & (2) Federal High Court (Civil Procedure) Rules 2019 and Section 47(a), (b), (c),(d), of Federal Competition and Consumer Protection Act 2018.

The applicants had prayed for “an order of interim injunction restraining the 1st defendants/respondents, either by itself, agents, representatives, officers or privies, howsoever described, from carrying out the impending increase in tariffs and cost of its products and services intended to take effect from 1st April, 2022, until the hearing and determination of the motion on notice already filed before this tribunal.

“An order of the Honourable Tribunal mandating the 1st defendant/respondents to maintain status quo pending the hearing and determination of the motion on notice.

“And for such further order or other orders as this Honourable Tribunal may deem fit to make in the circumstance.”

In the ruling, the tribunal ordered Multichoice Nigeria Limited to stop the planned hike in tariffs and cost of its products and services pending the hearing and determination of the motion.

“The 1st defendant/respondent is hereby restrained, either by itself, agents, representatives, officers or privies, howsoever described, from carrying out the impending increase in tariffs and cost of its products and services intended to take effect from 1st April, 2022 until the hearing and determination of the motion on notice already filed before this Honourable Tribunal.

“The 1st defendant/respondent is hereby mandated to maintain status quo pending the hearing and determination of the motion on notice,” the tribunal ruled.

The matter was adjourned until April 11 for the hearing and determination of the motion on notice.

“All parties in this suit are to appear before this Honourable Tribunal on the 11th day of April, 2022,” it ruled.

How long would this continue?

Multichoice services have been the most opposed in Nigeria when it comes to tariff increase, apart from petroleum products. While other companies have without confrontation, been increasing the cost of their products and services.

In 2020 when Multichoice attempted to increase tariff, it drew a national uproar that forced the Nigerian National Assembly to intervene, asking the South African company to suspend its plan or otherwise, provide pay-per-view billing for Nigerian consumers. Since then, every other company operating in Nigeria has nearly doubled the price of their products and services without opposition, even Nigerian-based companies.

Earlier this month, the Nigerian government quietly removed electricity tariff, and petroleum pump price has repeatedly been increased in recent times. The price of Dangote Cement is said to be higher in Nigeria than other countries across Africa where the product is available.

Inflation is at 16.87% as of January 2022, according to the Nigeria Bureau of Statistics (NBS), pumping the cost of everything in Nigeria. Experts are baffled that despite this reality, Nigerian consumers still want Multichoice’s bouquets tariffs stagnant, even though compared to other African countries where the cable network is operational, Nigeria still has the cheapest rates.

Experts said that the Nigerian government’s actions amount to forcing price control on a foreign company and it would likely spook investors – and for a country looking for foreign direct investments, it’s an own goal.