When will my people learn? If I had a dollar for every time someone said, “At least Mugabe did not allow retailers to raise prices willy-nilly,” I would be a millionaire, in USD terms. They think it was a good idea to control prices, forgetting that that was responsible for empty shelves.
When you force a supplier to sell at a price that does not make business sense, they will do it for as long as they think they can convince you to reconsider. When they realise you’re not going to budge, they just simply withdraw their products from the market.
Case in point:
Multichoice (DStv) withdraws from Malawi
MultiChoice has exited Malawi after a dispute with the country’s communications regulator over price hikes.
The company announced that it won’t be accepting new customers or reconnections and that it will only continue to serve customers with active subscriptions until 10 September.
MultiChoice had increased its prices in Malawi, but the regulator, the Malawi Communications Regulatory Authority (MACRA), obtained an injunction against MultiChoice Malawi to prevent the implementation of new DStv tariffs. MACRA said that the price hikes were excessive and would have a negative impact on consumers.
MultiChoice Malawi argued that it could not revert to old prices in order to comply with the injunction, since the prices are set by Multichoice Africa Holdings.
MultiChoice said that it had no choice but to exit Malawi after MACRA’s decision. The company said that it was “disappointed” with the regulator’s decision and that it had “exhausted all avenues” to resolve the matter.
It’s not over though because I don’t think Multichoice will leave Malawi. I think it’s a power move to show the Malawian regulators who is holding whose neck. It might be working because Members of Parliament are scrambling to get Multichoice, MACRA and the Ministry of Information to the table and talk it out.
We can draw a lot of lessons from this story. I’ll touch on two.
Price controls = bad, Monopoly = bad
See, we all understand that controlling prices leads to either inferior products and services or no products and services at all. The likes of Econet argue that low tariffs as dictated by the regulator play a major role in the shoddy service they have been providing lately.
The other major lesson is that when one organisation controls the lion’s share of a market, it can hold even the government at ransom. They know that their departure will leave a vacuum that is not easily filled and also that they contribute so much to the fiscus that the govt has to cave at some point.
The Malawian govt now has to consider the job losses that will come from this. If Multichoice pulls out of Malawi, some people will lose their livelihoods.
That includes Multichoice employees and decoder resellers, ana mkoma Bruce who offer realigning services, and many more. There’s also lost revenue for the financial services providers that allow for DStv payments.
The government itself stands to lose out on the sweet tax dollars Multichoice was contributing.
Then the biggest thing to consider is that it would make it very inconvenient for the MPs and higher-ranking government officials to pay for their DStv. That will probably be the biggest factor in pushing the government to work to resolve the issue and grovel at Multichoice’s feet in the least embarrassing way possible.
The monopoly question
Multichoice has a large market share in the pay-TV market in Malawi, while Netflix and other streaming services have yet to make significant inroads due to limited internet access in the country.
The power of a monopoly like MultiChoice means that the government is powerless to protect its citizens from profiteering companies. I’m not saying DStv was looking to charge too much in Malawi but if they were, the government and the citizens would have to button down and take it.
We shall see what happens in Malawi. It looks like that saga is going to be more interesting than any show on DStv, ironically.
The question remains though, “Is multichoice fleeing price controls or is it flexing its monopoly powers to scare the Malawian govt into submission?” It’s a bit of both in my opinion but tell us what you think in the comments section below.
Also read:
DStv partners Peacock to take on Netflix, does that even move you?
Load-shedding and financially struggling users are negatively affecting DStv, even in SA
18 comments
Simple, revenue generated in Malawi is not worth the fight. Viewer numbers must be extremely low in that country. Subscribers must be scrambling to register and pay outside of Malawi!
Looking at DStv’s full year reports from 2021-2023 Malawi was only mentioned in this year’s report & it was in negative light (court issue, power outages & cyclone freddy). Might not be a big market for them
that’s a drop in the ocean, Malawi’s market is not worth the fight what thr hell. this should be a lesson to our Zimbabwean economy we have bullies in all sectors of the economy.
Africa will always be Africa we aint goin nowhere.
They overcharge in other African countries but give south Africa low pricess
They are treated as foreign entities in those countries, not to mention the economies are vastly different. If you want to pay the exact same as SA, give them comparable operating conditions. If that’s not possible, take the extra charge or let them go.
DStv is becoming a problem in Africa.In Zimbabwe you cannot pay using local RTGS. It is strictly forex or someone from outside has to foot the bill.
Now in another territory the company is disrespecting Malawian laws and has threatened to disconnect Malawians.
Across the continent, following Russia’s attack on Ukraine the Russian-English television Russia Today was taken off-air. New stories are coming up now and again.
Is it the problem of monopoly? No. There are so many pay-tvs today to choose from. I blame African governments who are paid by DStv not to bring in serious players in the market who can compete on the same wavelength with DStv.
The problem is on pricing model that DStv uses. If the local kwacha falls in value it natural to realign the prices. If the US$ goes down, but the kwacha remains strong, prices are also raised.
Nope sorry I don’t agree with nearly all of the points you raised.
(1) Even our own government tries to find ways to avoid accepting the Zim $. And then you expect multichoicek(DSTV) do you a favour and accept tissue paper for their services? Remind me again how much it is to get a passport in Zimbabwe?
(2) Disrespecting a countries laws? You joking right? They just said “since we can’t agree lets part ways”
Now is that a threat? Definitely 🤣. But it’s also a letting the government of Malawi know that they should stop smoking whatever it is that makes them think they’re superman nd face reality. And the reality is simple Malawi isn’t a big enough market to matter. It’s the icing but definitely not the cake.
(3) So Russia today was taken off air across the continent. And you surprised, shocked or upset? You do realise that about at least 65% of the content carries is american made (movies, series, documentaries etc etc) nd 20% is european made (EPL, LA. LIGA etc etc). And all those countries have placed sanctions on Russia?So why would multichoice risk all that for the sake of one (1) channel?
(4) Did DSTV pay to avoid competition? I don’t know but I do know that DSTV is the only worthwhile satellite TV provider. Content is king and if you don’t have the shows that people want to watch well it’s better to close down and stop wasting everyone’s time (RIP Kwese TV)
Please don’t talk to me about Netflix and others of that ilk. Because if you really have to drink poison DSTV is the best option for the Malawian government. Why? Because DSTV pays taxes!
The Malawian government knows that collecting taxes from Netflix is a dream that few/no african governments have managed. Let’s forget for a minute that the Malawian internet network is extremely poor nd cost of data is high.
(5) DSTV is a business not a charity.
The aim of running a business is make a profit. Besides who told you that the exchange rate is the only thing to consider when prices are adjusted? What about the cost of all those shows? Have the prices gone up? Or is the owner of the satellite asking for more money to transmit DSTV across the continent?
I don’t know you might not know but only focusing on the exchange rate is definitely wrong.
I could not agree more even if I tried.
Well said
The effects of both price control and monopoly are terrible to the povho. As for multichoice this is a sign that Africa needs to innovate and come up with new ideas. African gvt’s should support upcoming entertainment platforms by Africans through offering incentives. But unfortunately African gvt’s are responsible of killing this upcoming platforms by putting unfriendly laws. Multichoice is boring these days because it can repeat one program for five years everyday and they know no one will do anything to stop it from doing that. If they where operating in America/ Europe they would have long gone down under. Whats the purpose of consumer organizations when they can not advocate for better services on behalf of their members?
Africans are so dull when we talk about entertainment…
DStv is the king of pay TV in Africa! Everyone who dares take them on will surely lose!
Malawians have many other options so it’s great that DSTV left. Their programmes were pretty archaic and not worth the price. The regulatory body has done the country justice. Good bye DSTV and good riddance
I know you don’t believe this. DStv might not be the best deal in entertainment but there aren’t many options for most people in Malawi or Zim or most of Africa.
Those that have Visa mastercards can still make payments online🤔 very soon corner shops agents will facilitate DSTV payment.
No loss
Its not an essential service
Also the prices are different per region in USD terms
It really wouldn’t make sense to charge more in a poorer nation
I think it was ok if someone come clear with the prices that have been put by DSTV in Malawi. Coz people may argue the whole day and remember this is a struggle for every country with poor currency system if you look at the same DSTV in SA people are not complaining why becoz they know that their home currrency is better off than of other countries so for them price hik is more business and after that they dont select who to take the offer especially in poorer countries coz they know that they will lose nothing since they have a bigger bag of subscribers across the whole continent. Monopoly at large.
We need to examine why Multichoice is increasing tariffs. My little understanding is that it is due to inflation, the Malawian Kwacha is losing power and so to keep their profit margins, Multichoice must increase the tariffs in Malawian Kwacha so that they do not lose on exchange rate.
In my view, this is not even an increase, but an inflation induced adjustment, it is even less than what they need to increase to keep up. We Also need to consider that Multichoice is giving a discretional service in Malawi, it is not a Malawian company and is not operation from Malawi, MACRA cannot regulate a discretional service. Who can truly regulate prices for Netflix?
With the above, I would say that Multichoice is not using the monopoly card, however having more service providers is helpful in market prices.