Price hike: FCCPC summons MultiChoice, warns against exploitation

The Federal Competition and Consumer Protection Commission (FCCPC) has summoned DSTV/GOTV cable service providers to its investigative hearing to explain the rationale behind the proposed subscription price increase, set to take effect next month.

A statement by the Director Corporate, Ondaje Ijagwu indicates that the summon followed the cable television providers’ formal notification of the price adjustment, which raised concerns about recurrent unilateral price hikes, potential market dominance abuse, and perceived anti-competitive practices in the pay-TV industry.

The statement explains that the commission would not fail to sanction the cable television providers if they were found wanting to violate fair market principles.

It expresses concern that Nigerian consumers continue to face frequent price increases, amid accusations that the television satellite provider applies different pricing strategies in other markets.

The statement adds that the commission is engaging the sector regulator and other relevant agencies to ensure fair competition and consumer protection within Nigeria’s broadcasting and digital subscription landscape.

The Competition and Consumer Protection Tribunal, about nine months ago, fined Multichoice Nigeria N150 million for disputing the court’s jurisdiction. The court also ordered the company to provide Nigerian subscribers with a one-month free subscription.

The tribunal had previously blocked Multichoice from raising subscription fees.

MultiChoice’s Justification

In previous instances, MultiChoice attributed price adjustments to several economic factors, including Inflation and Currency Devaluation. The company cited a significant rise in inflation and a 68% depreciation of the naira over a specific period, impacting operational costs.

MultiChoice also attributed the increment to increased operational expenses. They said challenges such as escalating energy costs, higher taxes, and increased logistics and transportation expenses due to subsidy removals were contributing factors.

The pay-TV industry in Nigeria faces ongoing debates over pricing models. While consumers advocate for a pay-per-view system, operators like MultiChoice have stated that such models are not feasible due to technological and content acquisition constraints.

As the situation develops, the outcome of the FCCPC’s investigation and MultiChoice’s response will be pivotal in determining the future landscape of pay-TV services and pricing in Nigeria.