• Monday, June 17, 2024
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MultiChoice ordered to offer Nigerians one-month free DStv subscriptions by tribunal

MultiChoice Nigeria’s revenue plunges 30% despite price hikes

The Competition and Consumer Protection Tribunal has ordered MultiChoice to provide Nigerians with one-month free DStv and GOtv subscriptions. Additionally, the Pay TV operator has been fined N150 million for challenging the jurisdiction of a court sitting in Abuja, which has restrained it from increasing its subscription prices.

This verdict was delivered by a three-member panel led by Thomas Okosu on Friday.

In April, a court barred MultiChoice from implementing a price increase for its services pending the hearing and determination of a motion filed by Barrister Festus Onifade.

Onifade’s suit, marked CCPT/OP/2/2024, was brought against Multi-Choice Nigeria Ltd and the Federal Competition and Consumer Protection Commission (FCCPC). The suit sought two orders: an interim injunction stopping MultiChoice from raising prices until the motion on notice was heard and determined and an order restraining the Pay-TV operator from taking any actions that could negatively affect the rights of the claimant and other consumers pending the hearing and determination of the suit.

Read also: MultiChoice to accept buyout offer from Canal+

MultiChoice announced in April its third price hike in almost a year, which would have raised subscription prices by an average of 25 percent. The company attributed the latest increase to rising operational expenses in the country.

In response to Onifade’s suit, Multichoice’s lawyer, Moyosore Onibanjo (SAN), filed a preliminary objection urging the court to decline jurisdiction and strike out the suit, urging that such price dispute cases had previously been decided in MultiChoice’s favour.

Onibanjo contended that the power to regulate prices was vested in the president of Nigeria, the tribunal was not the appropriate venue for regulating prices and services.

However, the tribunal panel, chaired by Justice Okosu, held that Section 39(2) of the FCCPC Act grants the tribunal jurisdiction over all commercial activities aimed at making a profit within the federation,

“The jurisdiction of this tribunal extends to all business activities within Nigeria,” Okosu said.

“I have come to the conclusion that this tribunal has the jurisdiction to preside over consumer rights as in the instant case and I resolve this issue against Multichoice… The first defendant is hereby mandated to pay N150 million penalty. Multichoice is hereby ordered to give Nigerians one month free subscription,” the judge declared.

The tribunal noted that Onifade (the claimant)’s suit was not contesting Multichoice’s price hike but rather the illegality of providing customers only eight days’ notice. The court has scheduled the hearing of the substantive suit for July 3.

In May, the legal team of the FCCPC declined to oppose Multichoice Nigeria’s preliminary objection.

Read also: Nigeria’s internet usage hits record high on rising 5G subscriptions

While a third tariff increase for DStv and GOtv packages in less than a year is a bitter pill to swallow for many Nigerians amid a raging cost-of-living crisis, a BusinessDay analysis attributes the company’s challenges to operational costs and steep currency depreciation.

The combined effects of inflation, devaluation, and high energy costs are squeezing many businesses and weakening Nigerians’ purchasing power. Over the past year, many companies have increased their prices due to the naira’s devaluation.

For example, Nigerian Breweries Plc raised prices twice between February and March 2024 because of rising production costs. Similarly, Guinness Nigeria Plc and International Breweries Plc announced an upward increase in the prices of their beer, malt, and other products in March. Netflix also recently reviewed its prices in the country to “respond to local market changes.”