Home Latest Insights | News Nigeria Is Not Fair On Blocking Multichoice (DStv, GOtv) Rate Hike

Nigeria Is Not Fair On Blocking Multichoice (DStv, GOtv) Rate Hike

Nigeria Is Not Fair On Blocking Multichoice (DStv, GOtv) Rate Hike

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!

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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.


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1 THOUGHT ON Nigeria Is Not Fair On Blocking Multichoice (DStv, GOtv) Rate Hike

  1. The elites just see Multichoice as punching bag, so in their warped thinking, it made sense to ask a firm whose input components aren’t 100% locally sourced, with no special forex rate handed to them, to keep rates same. It’s how we also thought It’s wise to use the courts to fight energy companies from increasing tariff, yet everyday we yammer ‘fix power, and Nigeria will rise.’ Sorry, with our poor mentality in business matters, nobody is capable of fixing power, certainly not when you expect the funds to come from foreign investors. How do you pour in billions of dollars with no clear pathway to profitability even after three decades? We never learn.

    Again, who’s fighting in courts to keep prices of bread, milk, rice and yam the same? They are the essentials, yet we don’t seem to know how to win in courts where it truly matters, but the very business that is capital intensive, operating in the same volatile environment, is where we flex muscles, just to see if it could collapse.

    When we shout ‘enabling environment’, it begins with allowing businesses to operate based on dictates of free market, especially on luxury items, anything to the contrary means that we do not want investors to come here. Bring a competitor? We cannot.

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