Ghana’s communication regulator, the National Communications Authority (NCA), has ordered the local shutdown of MultiChoice – Africa’s largest pay-TV operator — in 30 days from now, on Sept. 8, due to the streamer’s refusal to cut its subscription rate by 30%.
Like other countries in West Africa, Ghana has been up in arms about the steep increase in subscription charges for local pay-TV services which is partly caused by rampant inflation rates and weak currency across the continent.
Over the past two years, MultiChoice has drastically raised fees for its traditional satellite pay-TV business in several African countries, such as Nigeria and Kenya, as well as Zambia, Ghana, Uganda and Namibia, among others.
In Ghana, the pay-TV group increased the subscription fees by 15% in April with little notice, prompting the communications minister, Samuel George, to give MultiChoice an ultimatum to lower its rate by 30% by Aug. 7.
MultiChoice didn’t oblige and instead offered to maintain rates at existing levels, which wasn’t a good enough resolution for the local regulator. The latter told MultiChoice in Ghana that it has 30 days to “present its views, or provide remedial action, and submit a written statement of its objections to the suspension of the authorization”.
If the pay-TV group loses its license in Ghana, there is a risk that more African governments and regulators could follow Ghana’s example and start to retaliate against MultiChoice. If so, Canal+’s African takeover, when it goes through in October, could be worth less than what it’s paying for.
MultiChoice told sources it fears “dire consequences” if its Ghana operations must suddenly shutter a month from now. It will cause the loss of jobs of staff, installers, agents and retailers, said MultiChoise Ghana’s managing director Alex Okyere. The executive said it was “regrettable that Ghana’s minister took the stance to demand a 30% price cut notwithstanding our ongoing endevours to engage with him candidly and in good faith on this important matter.”
Okyere argued that MultiChoice has tried to “keep subscription fees as low as possible, despite the extremely challenging competitive and macro-economic environment in which we operate.” As such, it’s “not tenable to reduce fees in the manner proposed by the minister,” he said.
Canal+, meanwhile, declined to comment on the issue since it’s not yet the owner of MultiChoice.
The French pay-TV company has just obtained anti-trust approval for its takeover of MultiChoice. Some regulatory approvals still await in South Africa and are all expected to be cleared by Oct. 8. The region has the most evolved legislation on the continent in limiting foreign ownership and shareholding of local media licenses and companies.
In his investors’ presentation call on its latest half-year results, CEO Maxime Saada said Canal+ will make swift changes to MultiChoice’s operations to bolster the pay-TV television business.
“We will not wait for the beginning of next year to change a number of things,” Saada said. “We intend to provide benefits to consumers across all African geographies as soon as the end of the year, if we close when we expect to close. And we will launch a synergy plan as soon as we take control,” he continued.
Saada noted that “by the beginning of next year if everything goes to plan, we will already have launched some plans to generate some synergy.”
A looming question will be the way forward and plans with the money-guzzling joint streamer venture Showmax of MultiChoice and NBCUniversal.
Canal+ already runs Viaplay and has its own streamer Canal+ and is the second largest shareholder at 37.2% of the VIU video streaming service already available in South Africa.
