MultiChoice, the company that owns DStv, is getting ready for potential price hikes in South Africa and the broader African market due to financial challenges.
The company is facing difficulties in maintaining a healthy balance sheet.
In an interview with Daily Investor, Tim Jacobs, MultiChoice’s CFO, emphasized the need for inflation-level price increases for DStv.
He stated that these increases are crucial for ensuring sustainable growth and the ongoing delivery of high-quality content.
Jacobs mentioned that for many years, especially in South Africa, they priced their products at less than half of inflation, keeping a close eye on consumers’ wallets.
“For many years, especially in South Africa, we have priced our products at less than half of inflation. We’ve been concerned and watching the consumer’s wallet,” Jacobs said.
However, the pay-TV provider is now under increased pressure, as reflected in its recent financial results.
For the six months ending on September 30, 2023, MultiChoice reported a 1% drop in revenue to R28.33-billion, with its South African revenue falling by 3%.
The company also experienced a significant loss of R911-million, a substantial decline from the R55-million profit reported during the same period last year.
This financial strain comes despite a 4.3% subscription fee increase for DStv packages in South Africa earlier this year.
According to Jacobs, the company is at a point where it needs to be more disciplined about recovering costs, especially with factors like load shedding and decreasing revenue numbers putting pressure on DStv.
Jacobs explained, “We are actually to the point now, with load shedding and our revenue number coming under so much pressure, that we have to be a little bit more disciplined about recovering some of our costs.
“The chances are that we’re going to be looking at inflationary price increases, both in the South African market and the rest of Africa.”
Despite the challenges, Jacobs reassured that the company’s focus is on ensuring they can continue delivering great content to their customers, as that’s the primary reason customers choose their products.