Multichoice Nigeria Limited has asked the Federal High Court in Abuja to refuse an application seeking to compel it to meter its GOtv and DStv decoders to read customers’ subscriptions only per view or during viewing.
Multichoice is challenging the suit filed by Maduabuchi O. Idam, Esq., in suit number: FHC/ABJ/CS/563/2024, which also seeks an order compelling it to roll over unused subscriptions upon expiration for Idam and other Nigerian customers, allowing them to maximize their investment in its products.
Also joined in the suit are the Federal Competition and Consumer Protection Commission, the National Broadcasting Commission, the Attorney General of the Federation, and the Minister for Justice.
Customer’s Contention
Nairametrics reports that Multichoice has faced accusations of exploiting Nigerian customers.
Over the years, the Pay-TV provider has been scrutinized by lawmakers and consumer protection tribunals over its pricing practices.
In this latest suit, Idam alleges that GOtv subscriptions, for instance, are not metered and do not account for viewing time; instead, customers are disconnected from service upon the expiration of their subscription, regardless of usage.
He maintains that Multichoice arbitrarily increases the prices of GOtv and DStv packages “at their whims and caprices” without providing adequate reasons for such increases, a practice he claims has persisted for years.
Idam states that apart from the alleged arbitrary price hikes that took effect in May 2024, Multichoice does not allow customers to roll over unused subscriptions, preventing them from fully utilizing their purchased services.
He contends that Nigerian customers are not transparently informed about the applicable billing rates for their subscriptions, insisting that the court should deem such trade practices oppressive and exploitative “against me and other customers in Nigeria” and a contravention of the Federal Competition and Consumer Protection Act, 2018.
Idam argues that if the court does not compel Multichoice to meter subscriptions for pay-per-view and roll over unused subscriptions, customers will remain perpetually vulnerable to the company’s practices.
Multichoice Objects
Gozie Onumonu, Head of Regulatory Affairs and Government Relations at Multichoice, counters the applicant’s claims in court documents reviewed by Nairametrics.
He asserts that Multichoice and the GOtv license holder provide clear billing information, as receipts show the payment date, bouquet period, amount, and validity of subscriptions.
Onumonu drew the court’s attention to prior clarifications from Multichoice and other pay-TV operators during meetings with the NBC regarding the feasibility of the Pay-As-You-Go (PAYG) model, stating that it is not commercially or technically viable in satellite broadcasting due to current technological limitations.
“PAYG has been investigated several times by the National Assembly. In the 8th Assembly, the House Committee on Information, National Orientation, Ethics and Values, led by Hon. Olusegun Odebunmi, found that allegations of exorbitant Pay-TV subscription charges against Multichoice and the GOtv license holder were unsubstantiated and that the PAYG model is not technically or commercially feasible in the broadcast industry.”
The issue of PAYG was also part of the FCCPC’s investigation into consumer rights violations in 2015, he submitted.
Moreover, he argued that Nigerian customers often confuse Pay-Per-View (PPV) with the PAYG model offered by mobile telecommunications companies.
He explained that the PAYG model in telecommunications is a metered service where consumers are billed only for the services they consume, unlike fixed periods.
He said Telecommunications companies can offer PAYG services because they operate a two-way communication system that allows them to determine when a consumer is connected, what services are consumed, and for how long.
In contrast, he said satellite broadcasters like Multichoice and the GOtv license holder cannot offer pay-TV services in the same manner, as satellite broadcasting is linear and lacks a return path from the consumer’s home to the transmitting satellite; thus, decoders cannot transmit information.
Onumonu outlined three reasons for the current subscription rates:
1. Exchange Rate Fluctuations: Multichoice noted that inflation in Nigeria has steadily increased, adversely affecting the economic environment and the cost of doing business, undermining its ability to maintain subscription prices annually. “As of our last price increase, the headline inflation rate was 28.20%, and it is currently 33.20%. This rise in inflation has significantly increased local and foreign input costs.”
2. Programming/Content Costs: Onumonu explained that the cost of programming and content has escalated dramatically over the past ten to fifteen years, both in Africa and internationally.
3. Electricity Tariff Hikes: “Recently, the Nigerian Electricity Regulatory Commission announced a 230% increase in electricity tariffs for Band A customers, which includes many companies. Most of Multichoice’s and the GOtv license holder’s offices and transmission infrastructures fall within this band, resulting in vastly increased costs for maintaining a constant power supply essential for uninterrupted service delivery.”
Despite these challenges, Onumonu asserted that Multichoice is the largest investor in Nigeria’s television and audiovisual industry, committing substantial resources to promote the creation and distribution of local content.
“Over the years, Multichoice has contributed a total value of $514 million to developing local creative talent by sourcing and producing content for DStv, GOtv, M-Net, SuperSport, and Africa Magic, as well as investing in local production infrastructure, including state-of-the-art studios in Ilupeju, Lagos.”
He asked the court to reject the application in the interest of justice and for the general good of Nigerian subscribers.
Nairametrics has gathered that the court has scheduled December 5, 2024, for a hearing on this legal dispute.
What You Should Know
The hearing follows the Nigerian Competition and Consumer Protection Tribunal’s decision on July 12, 2024, granting a request from lawyer Festus Onifade to withdraw his case against Multichoice Nigeria concerning a price hike of GOtv and DStv subscriptions.
Initially, the tribunal fined Multichoice 150 million naira and mandated a one-month free subscription for violating interim orders, but Multichoice appealed and filed for a stay of proceedings.
The tribunal rescheduled the case to November, but Onifade chose to withdraw the suit, which the tribunal approved without awarding costs.
Multichoice announced new price adjustments for DStv and GOtv packages on Wednesday, April 24, 2024. An email to subscribers stated, “On Wednesday, May 1, 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 continuing to deliver high-quality content and unparalleled service.”
