On Friday June 7, the Competition and Consumer Protection Tribunal (CCPT) issued a verdict in the ongoing legal battle between Barrister Festus Onifade and Pay-TV operator, MultiChoice Nigeria, owners of DSTV and GOTV.
A three-man panel led by Thomas Okosu ordered the company to provide its Nigerian subscribers with a one-month free subscription while also imposing a N150 million fine for disobeying a previous court order.
Background and MultiChoice’s Arguments
Barrister Onifade had sued MultiChoice after the company announced new package prices on April 24th, slated to take effect on May 1st. Onifade argued that the short notice for the price increase was unfair to Nigerian consumers and sought a court order to block the implementation.
The court ruled in Onifade’s favor on April 29th. However, MultiChoice, through its lawyer Moyosore Onibanjo, challenged the court’s jurisdiction and went ahead with the price hike on May 1st.
MultiChoice reportedly argued that only the president has the authority to regulate prices. The company is appealing the CCPT ruling based on this argument.
Impact of the Fine
The N150 million fine could be a significant financial penalty for MultiChoice. If the company loses the appeal, it would not only have to pay the fine but also implement the one-month free subscription for subscribers.
This could strain customer relations and potentially lead to a significant increase in subscriber churn, a term used in the pay-TV industry to describe the rate at which subscribers cancel their subscriptions.
Subscriber churn can have a negative impact on a company’s revenue and profitability..
MultiChoice — A History of price increment
In three years, MultiChoice has inconsiderately jacked up the prices of its packages four times. In March 2022, it increased the prices of its packages. It came back again in April 2023 to increase the prices by 17 percent. 10 months later, in December 2023, the company introduced another price. And last, it implemented new prices despite the backlash that followed its announcement of its decision to onboard new prices.
‘MultiChoice, Multiple Choices’
Many believe MultiChoice’s frequent price increases are a direct result of its monopoly in the Nigerian pay-TV market. Subscribers argue that if a strong competitor existed, MultiChoice wouldn’t resort to annual price hikes that cause frustration.
They point to the Nigerian telecommunication industry, where the emergence of Glo forced MTN to lower prices and end its dominance in the market. This example highlights how competition can benefit consumers by driving down prices.
Several satellite television providers have emerged hoping to challenge MultiChoice’s dominance and force price reductions, mirroring what Glo did to MTN in the telecom industry. However, some of these competitors, like HiTV founded by legal practitioner Toyin Subair, haven’t been able to sustain themselves. While others remain operational, they haven’t managed to attract a subscriber base comparable to MultiChoice’s loyal following.
Expert Opinions & Possible Outcomes
Legal experts believe the outcome of these ongoing legal battle hinges on the CCPT’s jurisdiction. If the court upholds its authority, MultiChoice may be forced to comply with its rulings. Economic analysts suggest that increased competition in the pay-TV market could benefit consumers in the long run by driving down prices and improving service quality.
The legal battle is likely to be protracted. If MultiChoice wins its appeal on jurisdiction, it would be a setback for consumer protection efforts. However, if the CCPT’s authority is upheld, it could set a precedent for regulating pay-TV prices in Nigeria.
