Multichoice’s DSTV next in line for the ‘buldozer’s’ wrath

Multichoice’s DSTV might be in trouble in Uganda where the president takes no prisoners in dealing with erring corporates

If there is anything Tanzania’s President John Magufuli is known for, it is ‘bulldozing’ corrupt public officials and ensuring foreign companies play by the rules. When executives of Anheuser-Busch InBev, the world’s largest brewer, met him in earlier in the year to discuss a planned $100 million investment in the East African country, Magufuli welcomed them but reminded them to pay their taxes. He wasn’t lightening the mood, he meant it.

Since Magufuli took office in 2015, the Tanzanian government has tightened regulations on foreign companies. Gold miner Acacia is already losing $1-million a day in revenue due to the government’s ban on the export of its gold concentrate. An audit ordered by President in 2017 had indicated that Acacia was mining gold illegally in the country. Dangote Cement was in 2016 asked to pay a fine of TZS 15 million ($6,857) for flouting environmental regulations. Multichoice may be the next foreign company to feel the blades of the bulldozer as reports say Tanzania’s Communications Regulatory Authority (TCRA) may suspend the company’s licence.

The regulator on Tuesday accused the South African company, owned by multinational internet and media group Naspers, of showing free-to-air (FTA) stations on its pay TV services, in contravention of its conditions of licence.

“In exercising its powers, the authority hereby notifies the general public that it intends to suspend all the licences issued to MultiChoice Tanzania Ltd for failure to comply with the authority’s orders and failure to adhere to the licence conditions including failure to exclude free-to-air television channels from among its subscription channels,” a statement by TCRA said.

The regulator had also said it planned to suspend Simbanet Tanzania Limited, which trades as Zuku, and had on July 27 announced it would suspend Star Media Tanzania Limited, providers of StarTimes.

The Public Relations Manager of MultiChoice Tanzania Johnson Mshana told Tanzania’s Daily News that the TCRA notice was premature “since the carriage of FTA services by pay TV operators is currently before the Fair Competition Tribunal”.

Africans are tired of Multichoice
Tanzanians are happy about the government’s move, with many Africans wishing their countries also had a ban on Multichoice for whatever reason. Africans are tired of Multichoice’s monopoly. Without a fierce competition on the continent, the company has reviewed prices at will and customers have complained of poor services. The planned ban on Multichoice has made many Africans wish Magafuli was their president.

Although changing consumer behaviour over the past half-decade has increased demand for better subscription pricing, knowing it still offers the best content in the African pay TV market, Multichoice seem not to consider consumer outcry in making its business decisions. While some subscribers call for subscription prices to be slashed, others ask to pay only for what they use. People almost never watch television shows when they are broadcast anymore. The television consumer, like every other consumer, according to 5 African Consumer Trends for 2016, is tending towards on-demand service. But for lack of a better option, Africans have continued to subscribe to DSTV.

Africans’ love for football have also kept them stuck with Multichoice; its pay TV service DSTV holds broadcast rights to most of the world’s best leagues. But Kwese Sport is working to break Multichoice’s monopoly; the sports company owned by Stive Masiyiwa’s Econet Limited currently holds the English Premier League’s package of free-to-air broadcasting rights. The company which aired the 2018 FIFA World Cup has also entered into a four-year deal with the Union of European Football Associations (UEFA) to broadcast the UEFA EURO 2020, as well as qualifiers for the tournament, in all Sub-Saharan African countries, excluding South Africa.

Africans will be hoping Kwese gains more grounds and save them from the monopoly they love to hate.

However, as far as MultiChoice is concerned, its business model for now is perfect. The company had in recent times insisted that its model does not accommodate pay-as-you-watch. “Anywhere in the world, pay per view is materially more expensive for the person who wants to watch only that piece of content, than binding all the content together and spreading over the time market. It is just a mathematical calculation; it is not that complicated,” Tim Jacobs, chief executive officer of Multichoice had said in a 2015 interview.