DStv can’t rule out 2nd price hike over weakening rand


Cape Town – MultiChoice can't rule out a second price hike for DStv subscribers in South Africa in 2015 due to the weakening rand.

DStv subscribers in Uganda and Kenya are fuming since MultiChoice announced another dramatic price increase for the satellite pay-TV operator's customers in these African countries.

When news leaked in mid-August that MultiChoice in Uganda will increase prices again this year, the pay-TV operator denied it and said it’s only a "discussion document" – only to announce on Wednesday a dramatic increase of 25%. Since the beginning of the year Uganda's currency has already fell by 32% against the dollar.

MultiChoice Uganda's general manager Charles Hamya says the country's weak economy, especially the falling Uganda shilling is to blame for the DStv price increase and that MultiChoice absorbed losses for several months but can't anymore.

"The revisions are necessary in order to cater for the continuous depreciation of the Shilling against the dollar which has negatively impacted our business – whose input costs such as programming, infrastructure and satellite fees are mainly dollar-based," said Hamya.

"We held off passing on the cost of the depreciation by absorbing the losses for several months, however, this is not a sustainable business strategy; we find ourselves with no alternative but to revise our price rates upwards," said Hamya.

In Kenya news of yet another price hike since the one that happened on 1 April, swiftly led to uproar under DStv subscribers, where the depreciation of the Kenyan shilling against the American dollar is also blamed for the new increase of around 15% from October.

Subscribers across Africa are also fuming after MultiChoice moved the English Premier League (EPL) from a lower SuperSport channel two months ago to a more expensive DStv package.

MultiChoice in Kenya told DStv subscribers that "for months MultiChoice has held off passing through this price increase to DStv subscribers and has absorbed the foreign exchange losses."

"However, it is no longer possible to avoid a price adjustment on DStv subscriptions. The increase is necessitated by foreign exchange rate changes – similar to other imported services where costs are originated in US dollars."

The increase in Uganda and Kenya – and the reason – is a big warning sign for South Africa.

Hope situation will stabilise

In response to a media enquiry and asking if DStv subscriptions will increase again in 2015 or whether MultiChoice can rule out more than one price hike per year, MultiChoice in South Africa tells Channel24 that it can't rule out a second price increase this year and is hoping that the environment regarding the rand's depreciation against the dollar "will stabilise".

At the end of August the South African rand hit an all-time low against the dollar – mostly over growing concern of the world's number two economy: China.

"We review our prices based on a variety of factors including currency movements and constantly monitor the situation," says MultiChoice. "We hope the environment will stabilise and there will be no need to review the subscription prices".