At the beginning of this month South Africans were met with news that their DStv monthly subscription fee would be hiked from 1 April (see tables). This led to a social media storm with many saying they would cancel their subscription. Today Naspers' MultiChoice Africa, which offers video entertainment services in Africa outside South Africa, announced that there will be no price increase for subscribers to its DStv service (direct-to-home satellite television service) in the majority of its African markets.
Naspers CEO, Bob Van Dijk explained to CNBC Africa what was behind the changes in the video below.
In a statement the media giant said “most African markets have suffered as a result of commodity and oil price weakness, and because of the significant devaluation of local currencies. Many of MultiChoice Africa’s costs are incurred in dollars, which forced it to pass through price increases in 2015. Nevertheless, MultiChoice Africa continues to suffer adverse impacts from the economic environment.
“Since subscribers are still under severe financial pressure, MultiChoice Africa has decided not to increase subscription prices for DStv in most of its markets in 2016”.
The statement quoted Imtiaz Patel CEO of Naspers’s Video entertainment segment saying “We believe MultiChoice Africa is correctly responding to prevailing market conditions. Barring any further external economic shocks, we do not anticipate a price increase in 2016."
“As a group, we believe in the longer term potential of our markets in Africa. We will therefore provide the necessary financial support to MultiChoice Africa. We are in a position to do this because most of the Naspers group business (65% of revenue) is outside Africa, where times are better and our businesses are in good shape.” said Van Dijk.