MultiChoice Nigeria Loses 243,000 Subscribers in Six Months Amid Inflation, Legal Battles

MultiChoice Nigeria, the subsidiary of African pay-TV giant MultiChoice Group, reported a significant loss of 243,000 subscribers across its DStv and GOtv services between April and September 2024. The company attributes the decline to the rising cost of living, fueled by steep inflation in essential commodities such as food, electricity, and fuel.

According to MultiChoice’s financial results for the fiscal year ending September 30, 2024, Nigeria and Zambia suffered the most notable subscriber attrition within its Rest of Africa (RoA) markets, which collectively saw a decrease of 566,000 subscribers in the six-month period. Across all markets, MultiChoice’s active linear subscriber base shrank by 1.8 million year-on-year, now standing at 14.9 million active users.

The company highlights the severe inflationary pressures in Nigeria, where inflation has held above 30% over the past year, as well as extreme power shortages in Zambia as primary contributors to its challenges. Zambia alone saw 298,000 subscribers leave, while Nigeria accounted for the 243,000 drop.

In addition to subscriber losses, MultiChoice Nigeria faced financial setbacks due to the depreciation of the naira, which negatively affected the company’s U.S. dollar-denominated obligations. The company disclosed that its cash holdings in Nigeria dwindled to USD 11 million by the end of the reporting period, down from USD 39 million at the end of the previous fiscal year. This decrease partly stemmed from the naira’s depreciation and a USD 21 million write-off associated with funds held in Heritage Bank, which recently lost its operating license.

MultiChoice Group CEO Calvo Mawela acknowledged the tough climate, describing these as “the most challenging operating conditions” the company has faced in nearly four decades. He noted that Africa’s recent currency volatility, especially pronounced over the past 18 months, has reduced group profits by around R7 billion, necessitating significant operational adjustments to remain viable in strained economic conditions.

Despite these pressures, MultiChoice has sought to adapt by restructuring and reducing costs. Mawela also expressed confidence that the company would resolve its “technical insolvency” caused by non-cash accounting losses by November 2024 and affirmed the company’s liquidity remains strong, with over ZAR10 billion in available funds.

However, MultiChoice’s difficulties extend beyond financial and operational hurdles. In April, a tribunal barred MultiChoice from raising its DStv and GOtv subscription fees—a decision the company defied in May with a price hike, leading to a N150 million fine and an order to offer a free month of service to subscribers in Nigeria. MultiChoice has since announced its intention to appeal the ruling.