Nigeria’s consumer protection agency, the Federal Competition and Consumer Protection Commission (FCCPC) is conducting investigations over the possible contravention of consumer rights by major PayTV providers in the country. PayTV operators currently under investigation include DStv’s Multichoice and Startimes Tv.
“This investigation is in order to address the Commission’s concerns and publicly expressed consumer dissatisfaction with PayTV services. The scope of the inquiry includes, but is not limited to questions about unfair dealings, unreasonable and manifestly unjust contract terms, abuse of market power, colourable pricing practices and other otherwise obnoxious or illegal conduct,” the commission disclosed.
FCCPC’s probe comes in the wake of increased tariffs and price hikes by dominant PayTV operators. Multichoice had recently informed subscribers of upward price adjustments for its DStv and GOtv packages effective September 1.
The announcement caused an outrage among several Nigerians who berated the timing of such a decision by the company. Before this, Startimes had also increased prices for its various bouquets by an average of 22% in August.
Challenging Market Conditions for Pay TV Operators in Nigeria Led To Price Hikes
PayTV service providers including Multichoice and Startimes have bemoaned the unfavourable business conditions they are currently faced with in Nigeria.
Multichoice Nigeria has already mentioned that the 5.0 to 7.5% increase in Value Added Tax (VAT) and naira devaluation caused by the crash in global oil prices due to COVID-19, has made things difficult for the company.
The owners of DStv and GOtv also cited the high inflation rate in the country, with data from the National Bureau of Statistics (NBS) showing that Nigeria’s inflation rate increased year-on-year in June 2020 by 12.56%, the highest in almost three years.
Going by the figures from Multichoice operations, Nigeria only contributes 10.89% to the Group’s revenue. All of these factors reportedly played a part in the company’s decision to increase its subscription fees.
DStv and GOtv’s biggest competitor, Startimes, has similarly blamed the VAT increase and inimical foreign exchange rate situation of the Nigerian Naira, as reasons behind the price hikes of its subscription packages.
Our business is not exempted from the effect of the naira depreciation affecting all companies in the country. All of our foreign content is bought in dollars, and to serve our subscribers continually with the best content, our subscription prices has to be reviewed upwards.Viki Liu, Startimes Brand and Marketing Manager
Another factor to consider is the decision of the National Broadcasting Commission (NBC) to ban exclusive contents in its revised NBC code. The code controversially passes content exclusivity such as DStv’s EPL rights, as illegal. This prompted a reaction from IrokoTV CEO, Jason Njoku who stated that the NBC code will destroy PayTV in Nigeria.
Nigeria Pays Less for DSTV Subscription than Ghana, Kenya and South Africa
After DStv Nigeria announced the latest increase in subscription packages, many Nigerians complained about the high costs with some even demanding that the company should be sanctioned for allegedly extorting Nigerians amid the COVID-19 pandemic situation.
However, data from a Multichoice report on DStv’s website reveal that Nigerians are charged lesser DStv subscription fees than other Africans in Ghana, Kenya and South Africa.
For instance, the DStv Compact package which costs $20.45 (N7900) per month in Nigeria costs $24.23 (GHS 140) in Ghana, $24.01 (2600 KES) in Kenya and $23.74 (R399) in South Africa. This implies that for the DStv Compact package, Nigerians pay 15.6% less than Ghanaians, 14.8% less than Kenyans and 13.8% less than South Africans.
Despite this, Nigerians may still feel overcharged due to Multichoice’s decision to hike DStv tariff prices in the country twice in the space of just three months.
While the decision by Nigeria’s Consumer Protection Commission to investigate Multichoice and Startimes appears to be in the best interests of Nigerian subscribers, its outcome, if negative, may also be the final straw that breaks the back of PayTV operators in Nigeria.
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