MultiChoice announced new prices for its DStv services in South Africa recently, which will result in increases for many subscribers. The new prices will kick off on 1 April 2016, subscribers will see fees going up by 8% or more.
MultiChoice usually increase prices in line with the inflation rate, but this price hike according to MultiChoice, is as a result of the dramatic weakening of the rand in 2015 – with the currency losing 29% of its value since April 2015.
“[Foreign currency] is a huge amount of our costs,” said MultiChoice COO Mark Rayner.
The biggest component of this is content, but its technology suppliers and satellite leases are also priced in US dollars.
Overall, foreign currency makes up the majority of DStv’s cost base, said Rayner, which means it is affected a lot by rand strength.
Will DSTV increase prices in Nigeria?
There is a possibility that Nigeria may be affected by this price hike as the Naira has been depreciating against the dollar due to scarcity, amid the tightening control of the Central Bank.
Other South African countries have been feeling the effect of the currency crisis, as Truworths exited Nigeria last month because of the government’s import restriction policy, while Clover Industries, a food and beverages company also said it will stop investing in Nigeria because of the currency crisis.