PayTV company, MultiChoice, has decided to reduce its subscription fees in some of its key markets across Africa. The company intends to cut subscription rates of DSTV and GOtv in selected countries but Nigerian subscribers will not be among the beneficiaries.
Subscription prices are expected to remain the same in Nigeria, as MultiChoice’s plan is for the countries in the East Africa region. The countries on the list include Uganda, Kenya, Tanzania and Mozambique.
MultiChoice increased subscription rate in Nigeria last year. The move provoked subscribers who protested the price hike on social media but the complaints weren’t enough to force MultiChoice to revoke the price change. The Federal Government later intervened on behalf of Nigerian subscribers, and the case remains in court.
In an interview, the Group Executive Head – Corporate Affairs for MultiChoice Africa, Reatile Tekateka, explained the reasons why the price reduction will only affect the subscribers in the selected countries. According to him, the impact of local dynamics on cost structures determines subscription price.
“Not all markets where MultiChoice Africa operates will have the same price changes as each country has different cost structures influenced by local dynamics such as inflation, content costs, foreign exchange rates, local taxes and overheads required for each business.
“These are taken into account when setting prices for DStv and GOtv packages. We’ve done a lot of research into what pay-TV costs in other parts of the world and we believe that our DStv and GOtv services offer good value for money in the countries in which we operate,” Tekateka told TVwithThinus.
The price cut will be effective from September this year. According to the report, the reductions are:
• Uganda: DStv monthly subscription fees in Uganda will be cut by about 30% for some packages. Note that the price of DStv Premium, DStv Compact Plus, DStv Compact and DStv Family are all being reduced as well.
• Kenya: The biggest cut is expected to be in Kenya where subscription price reduction will be between 5% to almost 37%. It was reported that DStv Premium in Kenya will see a monthly price reduction of 5% on the most expensive monthly package, while DStv Compact Plus will decrease by 13.46%, DStv Compact will go down by 21% and DStv Family will see a whopping 36.84% decrease. DStv Access will fall by 5%.
• Mozambique: DStv Portuguese packages that include DStv Bue, DStv Grande+, DStv Grande and DStv Facil will be reduced as well, while subscription fees for DStv Business as well as GOtv Plus and GOtv Lite will increase.
Why the company is reducing prices: MultiChoice is reducing its prices in the countries because Startimes reduced its subscription rate in Kenya five months ago. This is MultiChoice’s way of responding to the competitive price Startimes offered pay-TV subscribers.
Why Nigeria is not among: Apart from the fact that Nigeria is not a member of the East African region, the difficulty companies experience in the process of doing business in the country has been a huge challenge. This is the reason the prices of goods and services are mostly higher in Nigeria compared to other countries.
The cost of doing business is also a problem for multinational companies in Nigeria as they need basic amenities to run their businesses effectively. These amenities are, however, provided by governments in other countries. This is the reason MultiChoice is able to operate a pay-as-you-view package in some countries.
Though Nigeria is the third-largest pay-tv penetration market above Kenya, Uganda and Mozambique which will be enjoying the price cut, MultiChoice is still ignoring the call by Nigerian subscribers for price reduction and the operation pay-per-view services.
Also, Nigeria’s Return on Assets (RoA) is on the rise, and the country is well above other countries (apart from South Africa) in Africa on MultiChoice’s subscription revenue by country. This is according to MultiChoice Financial Year 2019 report and as shown in the images below.
So, as long as the Nigerian government doesn’t create ease of doing business, curb the hostility companies are experiencing in the market, companies like MultiChoice will continue to share or transfer their extra-cost of operation burden to Nigerian consumers while lifting that of other countries.
Note: According to the MultiChoice FY 2019 report, Nigeria has the highest price increase across Premium: Premium and Compact Plus bouquets, and Mid-market: Compact and Commercial bouquets – they rise 7% and 8% respectively.
US Capitol complex temporarily shut down
The US Capitol complex was shut down temporarily on Monday as a precautionary measure after a small fire broke out nearby.
The US Capitol complex was shut down temporarily for about an hour on Monday as a precautionary measure after a small fire broke out nearby, highlighting the security concerns that are being raised days before the inauguration of President-elect Joe Biden.
The security concerns and the lockdown follows the January 6 attack on the US Capital by supporters of the outgoing US President, Donald Trump, after his encouragement and inciting comments, calling the Presidential election a fraud without any proof of evidence.
Some of them even called for the death of the US Vice President, Mike Pence for presiding over the certification of Joe Biden’s November election victory.
While making the disclosure in a statement, the Capitol Police said that the lockdown has been lifted and the nearby fire contained.
The Acting Chief of the Capitol Police had said that the complex which comprises of the Capitol, its grounds and several buildings were shut down as a precautionary measure.
The US Secret Service in a tweet post on its official Twitter handle said, “Out of an abundance of caution the U.S. Capitol complex was temporarily shutdown. There is no threat to the public.’’
The city’s fire department in its tweet post said that firefighters put out a fire outside near the Capitol complex.
The fire department said, “There were no injuries. This accounts for smoke that many have seen.”
What you should know
- President-elect, Joe Biden is expected to be sworn in at the US Capitol on Wednesday amid an unprecedented cordon of security, with strict physical distancing measures in place due to threats of violent attacks in Washington and the rising cases of coronavirus infections.
- Donald Trump, who is just fresh from a historic second impeachment from the congress had said he would not attend, although his deputy, Vice President Mike Pence, had given an indication that he would attend.
Kinyungu Ventures Research calls for changes to cut-and-paste VC strategy in Africa
The Paper recommends investment structures and approaches tailored to African operating conditions.
East African venture advisory firm, Kinyungu Ventures has published a white paper Chasing Outliers: Why Context Matters for Early Stage Investing in Africa that has found that there continues to be a wide misalignment between traditional venture capital models and the African market. The team behind the report is now calling for a broadening of approaches to institutional investment on the continent. Speaking with 100 Pan-African founders, investors, and LPs across 15 African countries, the research suggests investors should prioritize investing structures and practices that reflect the realities of operating in Africa. This includes adopting more flexible investing structures with longer time horizons.
According to the paper, there are multiple mismatches between key characteristics of Silicon Valley VC and African markets, which influence how startups and funds maneuver as well as what results they expect and produce. Findings show that African markets are large, but also fragmented, and its consumers have limited purchasing power. Furthermore, consumers on the continent are difficult to acquire and retain, yet the sheer size of the African market also presents a real opportunity for profit once the environment is clearly understood. The paper’s key recommendations for funds include:
- Adopting more focused investment strategies, such as investing in b2b companies or cross-subsidizing a portfolio with less risky, steady return assets.
- Considering non-unicorn investing models geared at more resilient companies, with returns distributed more widely across the portfolio
- Using flexible structures such as debt or PCVs to accommodate market-level changes, where feasible
- Allowing a longer time horizon for returns, understanding that growth could be slow and difficult to achieve for many companies
Kinyungu Ventures catalyzes resilient businesses for local intergenerational prosperity. The East African-centric investor focuses on entrepreneurship in East Africa, startups, seed funding, debt financing, impact investing and angel investing.
Speaking on the launch of the white paper, Tony Chen, Managing Director of Kinyungu Ventures and co-publisher of the report says, “Capital in Africa is scarce and pursuing a “growth at all costs” strategy where capital pools are shallow presents huge risks for companies. We’ve also found that many great businesses don’t fit the typical VC profile, but have tremendous unfulfilled potential”.
Tayo Akinyemi, lead researcher and writer of the report added: “In our conversations with numerous investors and founders, it is clear that nuances in variables such as consumer behavior, cultural norms, and business practices impact startups significantly and being on the ground is crucial for success. While African markets aren’t always able to provide the outsized returns that Silicon Valley typically looks for in high-growth companies, a more focused strategy here could unlock real gems, as has been proven by some of the startup successes the continent has seen over the years.”
Neimeth Pharmaceuticals to raise N5 billion in additional equity
The Board of Neimeth is set to raise N5 billion additional equity upon the approval by shareholders of the company at the AGM.
The disclosure is part of the resolutions reached at the Board of Directors meeting of 15th January 2021. At the end of the meeting, it was resolved that the company would raise additional equity to the tune of N5 billion.
In line with this development, a board resolution proposing to raise equity will be presented at the Annual General Meeting of the Company scheduled to hold on 9th March 2021.
What you should know
- The Board of the Company is yet to disclose if the additional equity would be a rights issue or a private placement, as the details of the additional N5 billion equity set to be raised are yet to be finalized.
- The fund will help the company’s management to execute key strategies that will reposition the company as a leader in the healthcare industry, with the hope to deliver better returns on investment to shareholders.
- The additional equity financing will also increase Neimeth’s outstanding shares, which will dilute earnings and impact the Company’s stock value for existing shareholders.
- The move has the potential to trigger a sell-off of the company shares on the Nigerian Stock Exchange.