Multichoice, which operates under the brands DStv, GOtv, and Showmax, has been providing satellite and digital terrestrial television services in Malawi since 1996. It has over 100,000 subscribers in the country, according to its latest annual report. However, the company has been at loggerheads with the Malawi Communications Regulatory Authority since January 2023, when MACRA fined Multichoice 10 million Kwacha for raising prices in July 2022 without obtaining prior approval. MACRA also demanded a refund to all DStv subscribers, citing consumer protection laws.
Multichoice challenged the verdict in court, arguing that it was not bound by MACRA’s tariff regulations, as it was only a supplier and not a licensee of broadcasting services in Malawi. It also claimed that the prices were set by its parent company, Multichoice Africa Holdings, based in Dubai and that it could not revert to the previous tariffs without affecting its operations in Malawi and other countries.
Last month, MACRA obtained an injunction from the High Court of Malawi, barring Multichoice from implementing new DStv tariffs that were scheduled to take effect in August. The court granted temporary relief to allow a reevaluation of the tariff structure until August 7. However, Multichoice said that it could not comply with the court order and decided to exit the Malawian market instead. In a statement to its customers, Multichoice said that it would not accept new subscriptions or reconnections and that it would only continue to serve existing customers until September 10 or until their subscriptions expire. Multichoice Africa confirmed the decision, saying that it was disappointed with MACRA’s actions and that it had exhausted all avenues to resolve the matter amicably.
This isn’t Multichoice’s first battle
The case of Multichoice and MACRA is not unique to Malawi. Multichoice currently operates in 50 African countries and has faced similar disputes with regulators and governments over issues like pricing, licensing, taxation, and content regulation. In Kenya, Multichoice has been embroiled in a long-running legal battle with the Communications Authority of Kenya over the licensing of its free-to-air channels. The battle started in 2014, when the body revoked Multichoice’s license for airing free-to-air channels such as KTN, NTV, and Citizen TV on its platform without their consent. Multichoice appealed the decision in court and obtained several injunctions to continue airing the channels. However, in 2020, the Supreme Court upheld CAK’s decision and ordered Multichoice to stop broadcasting the channels or pay royalties to the content owners.
In 2016, Nigeria found Multichoice guilty of several allegations lodged by subscribers including a grossly unfair, unjust, and one-sided, Service Level Agreement and the Terms and Conditions of Subscription, and violations of consumer rights. Last year, the company was accused again of exploiting its dominant position in Nigeria and charging exorbitant fees for its services. The Federal Competition and Consumer Protection Commission ordered Multichoice to suspend its planned price increase and refund customers who had paid the new rates. The body also launched an investigation into MultiChoice’s alleged anti-competitive practices. Much like Nigeria and Malawi many African countries are experiencing high inflation rates. These inflationary conditions have caused businesses operating on the continent to increase the price of their services, it has also significantly weakened consumer spending power.
However, an exit decision goes beyond regulatory disagreements. Other factors, such as the size and potential of the market, the level and nature of competition, and then the degree and impact of regulatory intervention would also have to be considered. For example, countries like Nigeria, Kenya and South Africa that are bigger economies, present big markets for the Multichoice. According to its annual report, MultiChoice had 20.1 million subscribers in Africa as of March 2020, with Nigeria accounting for 43% of its revenue from the rest of Africa (excluding South Africa). For these countries, Multichoice contributes to their economies through taxes, creating jobs, supporting small businesses, and skills development. In past disputes, MultiChoice has been able to resolve some of them amicably and continue its operations in these countries. For instance, in June 2020, MultiChoice Kenya agreed to pay a fine of 500 million Kenyan shillings to the CAK and remove the restrictive clauses from its contracts with content providers, after the CAK found that the company had abused its dominant position in the pay-TV market. Nevertheless, MultiChoice’s exit from Malawi serves as a wake-up call for both the company and its regulators in other African countries. It may prompt the rethinking of strategies and approaches to ensure a fair, competitive, and sustainable pay-TV industry that benefits all stakeholders. Besides, the exit from Malawi presents an opportunity for competitors to set their sights on the south African country.