DStv will be seeing further price hikes in 2024 as Multichoice tries to keep a healthy balance sheet amidst loadshedding and inflationary challenges, says CFO Tim Jacobs.
Multichoice has announced that it is planning to roll out further price hikes for DStv across all of its African subsidiaries in 2024. According to CFO Tim Jacobs, the anticipated increase is due to mounting financial challenges as the company tries to maintain a healthy balance sheet.
“For many years, especially in South Africa, we have priced our products at less than half of inflation. We’ve been concerned and watching the consumer’s wallet. The chances are that we’re going to be looking at inflationary price increases, across all the African markets we operate in.”
The company’s financial results for the six months ended 30 September 2023 revealed that it saw a one percent decline in overall revenue.
Multichoice also reported a loss of about R911 million, despite the 4.3 percent hike in subscription rates put in place for DStv packages that came into effect earlier this year. Tim explains that while other markets appear to be responding to the increase, the South African subsidiary appears to be struggling still.
The South African business alone saw a three percent decline in revenue.
Tim believes this is a result of loadshedding. “We are actually at the point now, with loadhsedding and our revenue number coming under so much pressure, that we have to be a little bit more disciplined about recovering some of our costs,” he said.
Tim explained that “inflation-level price increases for DStv are necessary to ensure sustainable growth and the continued delivery of high-quality content” in an interview with Daily Investor.
He concluded that Multichoice would like to continue delivering great content to its customers, because that’s actually why they’re buying its products, but in order to do that the financial returns need to be enough for the business to continue operating.