WorldStage Newsonline– African Pay-TV operator, Multichoice Group, has posted a pretax loss of 706 million rand ($38 million) for the year ending in March 31, 2024, blaming drop in subscribers in Nigeria, South Africa, and other challenges.
Specifically, Multichoice reported that the 18% decline in Nigeria brought the RoA’s total active subscribers down by 13% to 8.1 million from 9.3 million in 2023 while active subscribers in its home country, South Africa also declined by 5%.
The company operating units outside South Africa tagged as ‘Rest of Africa’ (RoA) with the group’s 9% decline in active subscribers was mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline,” the company stated.
Despite implementing price increments three times in the last year in Nigeria, the company said: “The Nigerian economy and consumers faced persistent challenges through FY24.
“The removal of fuel subsidies, sharp currency depreciation with the official naira halving in value, inflation climbing to over 30%, and higher emigration of the middle and upper class drove an 18% YoY decline in active subscribers.”
It added that this also reduced Nigeria’s contribution to the Rest of Africa revenues from 44% to 35%. It noted, however, that Ghana saw a similar subscriber trend given an inflation rate that is still above 20%
Multichoice further stated that due to the challenging market dynamics, the short-term focus of its RoA (Nigeria, Angola, Kenya, Ghana, and Zimbabwe) business was shifted from subscriber growth to safeguard profitability and cash flows.
“Several cost-saving initiatives were implemented, including scaling back significantly on decoder subsidies (-46% YoY or ZAR1.3 billion), and reducing selling, general, and administrative (SG&A) costs by ZAR500 million. These interventions enabled the Rest of Africa business to increase trading profit by 48% YoY to ZAR1.3 billion,” it said.
Showing that the decline was across its operations, Multichoice reported active subscribers in its home country, South Africa also declined by 5%. The total subscriber base in the country stood at 7.6 million.
The company blamed the decline on the power outages experienced on 275 days of the year, which it said further discouraged potential subscribers without backup power.
“Although the Premium bouquet is trending toward a stable base given the targeted retention efforts, the premium customer tier (which includes the Premium and Compact Plus bouquets) declined by 8%. The mid-market Compact base, which is most exposed to the macroeconomic challenges, was down 9%, while the mass-market tier was 2% lower due to pressure in the Family base, the impact of load shedding, and reduced decoder subsidies,” it said.
