Despite the hues and cries, MultiChoice has continued to ride roughshod on Nigerians as it increases its charges without recourse to official clearance. BENJAMIN UMUTEME in this report seeks the way out of the unending rip-off.
When last month, pay TV outfit MultiChoice released a statement that it would increase its charges, many Nigerians cried out. For many, the company was being inconsiderate considering the economic state of many Nigerians which has been occasioned by the coronavirus pandemic.
MultiChoice Nigeria was launched in 1993, and started operations with only 30 employees, but since then, the company has grown to a team of more than 1, 000 employees while indirectly supporting thousands more jobs.
Today, more than 70 per cent of Nigerians enjoy content in their mother tongues while interacting with MultiChoice Nigeria through multiple touch-points including sales agents, installers, ‘sabi men’ and retailers.
With over 6.7 million subscribers, mainly in South Africa and Nigeria, analysts are of the view that the cable TV provider is a monopolistic market due to its dominant size, a charge it has vehemently denied. HiTv which was established to rival it closed shop about a decade ago.
Tariff hike
When the first index case of the coronavirus was reported in Nigeria leading up to the lockdown of the economy, it expectedly crippled many business concerns. While many Nigerians were still smarting from the harsh effects of the lockdown, the country’s leading cable TV told Nigerians that they should from June, this year, be prepared to pay more for the use of its services.
MultiChoice explained that the increase in fees was in line with the federal government legislation which increased Value Added Tax (VAT) in January 2020, with implementation effective February 1, 2020.
It stated that, “In order to provide some relief for customers, MultiChoice Nigeria has absorbed the cost of increase in VAT for the past four months, keeping its products and services at the old 5% VAT, however this is no longer possible and the mandated 7.5% VAT will be applied accordingly.”
The federal government in February began the implementation of its VAT increase policy of 7.5 per cent from 5 per cent. The firm, while acknowledging increased economic pressure Nigerians have had to grapple with, stated that it remained committed to providing its customers with value for their money while giving them access to the best available content.
Effective from this month, Premium subscribers on DStv started paying N16, 200 as against N15, 800. This is an addition of N400. Compact Plus subscribers now pay N10, 925 as against N10, 650.
Similarly, Compact bouquet tariff was adjusted from N6, 800 to N6, 975. Subscribers on Confam bouquet now pay N4, 615 against N4, 500, while Yanga subscribers have started paying N2, 565 as against N2, 500. Subscribers on Max on GOtv now pay N3, 280 from N3, 200, while Jolli and Jinja subscribers pay N2, 460 and N16, 640, respectively.
Litany of tariff hikes
In May 2017, Nigerians woke up to the announcement by the popular cable TV of price increase. Gotv Lite which was then its cheapest bouquet increased by 12.5 per cent from N400 to N450, while the DSTV Premium package increased to N14,700 from N13,980, indicating a 5.15 per cent. The increase according to the company was due to both the rapid spike in inflation and foreign exchange rates.
Though many say the reasons were valid, it was not peculiar to the company alone. Over the years, the company has continued to increase tariffs arbitrarily without recourse to the government. Between 2009 and 2017, tariffs have been increased eight times, averaging a change in their tariff every two years.
The first increase was in September 2009 which coincided with the introduction of a low cost bouquet DStv Access at N1, 500 and an increase in the prices of DStv Compact and Premium.
In April 2011, prices went up again. DStv Premium went from N9,500 to N10,300 as well as other bouquets except for Access which was left unchanged at N1,500.
August 2012 saw a 10% increase in all its bouquets. DStv Premium was increased from N10, 000 to N11, 000. Access was left unchanged at N1, 500. The increase was attributed to the rise in inflation and operational costs.
August 2015, witnessed a 20% increase in all its bouquets. DStv went from N11, 650 to N13, 980. DStv Access subscribers now had to pay N1, 800 as against the previous rate of N1500.
A careful look at the increase shows DStv Premium has increased by 55% in eight years from N9, 000 in 2009 to N13, 980 in 2017.
DStv Access has gone up by 26% from its inception in 2009. The current increase may thus lead to more consumers switching to cheaper packages or competitors.
Reps, Nigerians kick
The latest increase by the company took many people by surprise, especially with the Covid-19- induced economic stress. The country’s lower lawmaking body, the House of Representatives, rising from a motion sponsored by one of its members, Mr. Chinedu Ogah, directed the company to suspend the recent 15 per cent increment in all their cable packages.
In effect, the House mandated its Committee on Implementation of Pay As You Go tariff (PAYG) plan by broadcast service providers to probe into the issue and report back for further legislative action. Ogah, while moving the motion, expressed concerns over the sudden increment of subscriptions knowing the challenges faced by Nigerians as a result of the coronavirus pandemic.
The lawmaker accused MultiChoice of charging exorbitant rates despite not rendering a “per as you go” services in line with global best practices.
Stressing that since the beginning of the pandemic MultiChoice has not rendered any form of humanitarian assistance to the country, Ogah said the increase in tariff “will subject the people to more hardships.”
For Dara Ernal, a resident of Jikwoyi, the action by MultiChoice has shown that it does not care about Nigerians. “Even if they must increase tariffs, it shouldn’t have been at this difficult period,” he said.
In the same vein, another resident of Jikwoyi, Sire Gift, said the action by the cable pay TV has shown that “a brand that cares for the masses should either reduce tariffs or let tariffs be, but should never increase them in this hard time.”
Commenting on the price increase on twitter, a MultiChoice customer with the handle, @ayo_olah wrote: ‘So, from 1st of June we will be paying high tariffs on Gotv/Dstv! This is inhuman for them to do this in this difficult period #WeRejectDstvIncrease’ For another twitter user with the handle @MasterEedris lamented saying, ‘When we thought DSTV will have sense and reduce their prices, next thing boom they want to increase price at this difficult time #WeRejectDstvIncrease’
Clamour for Pay Per View
Over the years, many Nigerians have been clamouring for the company to introduce the Pay Per View as is obtained globally. The clamour for a Pay Per View style is due to the fact that the majority of Nigerians have poor electricity supply, so to them, prepaid or monthly subscription plan is not fully utilised.
For many to enjoy their subscription, they are forced to spend extra money on alternative sources of power supply. Statistics say over $14 million is spent on generators and fuels annually by Nigerians.
A MultiChoice customer, who as not to be named in print, told this reporter that Pay Per View “will limit the cost of subscription, which means subscribers can only be charged for content watched.” He was, however, quick to say that it would take a big push by the government to get the company to adopt the Pay Per View for its customers in Nigeria.
“I wonder why the government is finding it difficult to compel MultiChoice to adopt the Pay Per View option for its customers in Nigeria. That was the same thing that happened in the telecoms sector until Glo mobile came along and demystified their lies. The National Assembly should make a law forcing them to switch to Pay Per View for the good of Nigerians,” the visibly angry said.
Also, consumers under the aegis of the Coalition of Nigeria Consumers have also expressed concerns over the announcement by Multichoice to increase its subscription price from June 1.
This was contained in a petition sent to the director-general of the Federal Competition and Consumer Protection Commission (FCCPC) through the F. S Onifade & Associates titled “powers of the commission to regulate price: abuse of power of dominance in markets and impending price hike by multichoice/dstv in Nigeria.”
Managing Partner at the F.S. Onifade & Associates Festus Onifade said the petition was anchored on “Power of Abuse of Dominance” as provided for in new law FCCPC Act 2018 signed into law by President Muhammadu Buhari in February, 2019, which is prohibited under Section 72 of the FCCP Act.
The Act empowers the FCCC to fix and regulate prices of goods and services where such infractions have been brought to the notice of the Commission.
According to the petition, the increment plans by the company, citing the increase in VAT rate as the reason, makes it the third time in a period of five years despite court injunctions against similar increment which was not obeyed.
It, therefore, called on the Commission to under law and new identity save the Nigerian consumer from another oppressive private monopoly, noting that out of about 14.56 million subscribers on across Africa, Nigeria alone has 40% of this numbers as at 2019 making her the largest and leading satellite TV service provider in Nigeria.
“You will recall that MutilChoice Nigeria Limited had recently announced that it would be increasing its rates for DStv and GOtv subscribers from 1st June, 2020, citing the increase in VAT rate as the reason for this imminent price increment.
“Our client also noted with grave concerns that apart from the pattern of (content recycling) of repetitive films and programmes; many local TV Channels which ought to be free are paid for by Nigerian consumers as opposed to the practice of enjoying free local TV Channels in other parts of the world.
“Worst still is that with a monthly premium subscription rate of about N16, 000 our client and Nigerian consumers are greatly surcharged. This is because with an average of 720 hours per month, an average view is about six hours per day. If usage is converted to hourly basis this same amount will give a consumer four months value. Hence, we advocate ‘pay as you use.”
Experts differ
In his reaction, Akonte Ekine, CEO of Absolute PR, said MultiChoice is doing the normal thing by adjusting to the VAT increase. According to him, if subscribers are angry about the company’s decision, especially this time, they should ask government to return VAT to 5 per cent.
Another subscriber who simply identified himself as James said the DStv VAT increase “at this time of Covid-19 will put more pressure on subscribers who are managing to sustain themselves.”
A marketing practitioner, John Ajayi, said DStv, as a consumer centric company, should have waited on the implementation of the VAT to allow the economic pressures from Covid-19 to ease.
He suggested that since the company has delayed the implementation since February, it could have waited a little bit and capitalise on the gesture to re-enforce its bond with subscribers.
“Further delay in the implementation of the VAT on its services would indicate that the pay TV Company is sympathising with Nigerians, especially this time Covid-19 is ravaging the world.”
