Naira depreciation, rising taxes cause of DSTV, GOTV prices’ hike – MultiChoice tells Tribunal

MultiChoice Nigeria has attributed the depreciation of the naira, rising taxes, and other economic factors to the recent price hikes for its DSTV and GOTV subscription.

   The pay TV service provider legal team disclosed this in its counter affidavits before the Competition and Consumer Protection Tribunal following a case alleging it unjustly increased subscription fees without one-month notice to customers.

    A legal dispute had ensued, leading to a three-man panel of the Tribunal led by Thomas Okosu, which fined MultiChoice and mandated it to give a free one-month subscription to customers due to non-compliance with interim orders.

   Dissatisfied with Tribunal’s decision, MultiChoice Nigeria appealed the ruling, citing increased operational costs and economic challenges, and maintained that they duly notified customers and regulatory authorities before the price increase.

   MultiChoice maintained that its DSTV and GOTV price hikes are a consequence of the fallen value of the naira and ever-increasing taxes in Nigeria, among other factors.

   In a counter affidavits dated July 12, 2024, and filed before the court, MultiChoice appeal against the Okosu panel’s ruling, arguing that the members of the tribunal erred in law in its ruling.

   The tribunal, had, while ruling on pay TV service provider ’s preliminary objection, fined it N150 million and ordered one month of free subscription for flouting its interim orders restraining DSTV and GOTV price hikes.

   However, MultiChoice lawyer, Moyosore J. Onigbanjo (SAN), had filed a preliminary objection urging the court to decline jurisdiction on the suit filed by Festus Onifade and strike it out because such a price dispute case had been decided before in favour of his client.

   He added that the Federal Government removed the subsidy on petroleum products, which caused an astronomical increase in the cost of logistics and transportation for businesses in Nigeria. To mitigate the weakening exchange rate, MultiChoice was constrained to increase its subscription prices, but to the least affordable extent possible.

    Onigbanjo insisted that MultiChoice duly notified its esteemed customers and regulatory authorities before the increment was effected. “Contrary to paragraphs 6 to 9 of the affidavit in Support of the Originating Summons, the price increment did not create any apprehension in the Claimant as it is an inexorable consequence of the fallen value of Naira,” he said.

    “The 1st Defendant pays for the right to broadcast each content and of the operational inputs in dollars. Multichoice implemented a 14% adjustment of its subscription prices on 01 November 2023. The adjustment was necessitated by escalating input costs, rising expenses of technical upgrades, ever-increasing tax/levies, inflation and exchange rate fluctuations, including the ongoing increases in the company’s operational and ancillary costs,” he added.

   The former Lagos State Attorney-General and Commissioner for Justice, further submitted that recently, the Nigerian Electricity Regulatory Commission (NERC) announced a 230 percent increase in electricity tariffs for band A customers, which consist mostly of companies.

    He noted that most of MultiChoice’s offices and transmission infrastructures are in the Band A Class. Consequently, the cost of maintaining a constant power supply to their vast transmission network has vastly increased.

    The silk further maintained that MultiChoice was one of the few companies to have endured economic hardships without having to lay off employees or reduce their monthly salaries. He added that it was not the best time to lay off employees, especially given the record-high unemployment rate in the country and the rising poverty rate.

   The SAN averred that reducing investment portfolios and service quality is not an option MultiChoice is willing to consider, as this would greatly affect the creative industry and the Nigerian economy as a whole. He added that such a move would create a ripple effect on the economy, adversely impacting new investments, employment opportunities, and the development of new creative projects.

   He stated that the defendant has already filed a notice of appeal dated June 7, 2024 and an application for a stay of execution of the orders of the Tribunal made on June 7, 2024, along with a prayer that all further proceedings before the Tribunal should be stayed pending the determination of the appeal.

   Onifade on his part, argued that the issue he placed before the court is whether MultiChoice Nigeria gave adequate notice in respect of the May 1, 2024, TV subscription price increase, and not about price regulation or increase.

    He queried why the Tribunal would permit MultiChoice  to “bring this barrage of application,” and argued that the first objective of the Tribunal is to protect the interest of consumers, adding that the actions and inactions of the tribunal which tend to indulge any party that is on the wrong side of the law will be construed to be shielding those parties.

    The tribunal chairman,  Okosu, however retrained Onifade from proceeding with such line of argument, saying: “I won’t let you sit down and indict this tribunal. I am telling you the truth. As you have a right, the other party have a right too. I think you should proceed on a different route.”

   Onifade applied for time to respond to the counter-affidavits. The legal team of the FCCPC also asked for time to respond. The tribunal subsequently adjourned to July 29, for a hearing.

   Recall that Multichoice in a digital message to subscribers via its social media platforms, announced the new price adjustments on DStv and GOtv packages on Wednesday, April 24, 2024.

The message read, “On Wednesday, 1 May 2024 we will adjust our prices across all our packages on DStv and GOtv. We understand the impact this change may have on you – our valued customer, but the rise in the cost of business operations, has led us to make this difficult decision. It remains our mission to provide the best entertainment and viewing experience to you and we are committed to continue to deliver high-quality content and unparalleled service.”