We are engaging with MultiChoice – FG
Hike in VAT responsible for price increase – Multichoice
Nigerian subscribers to the South African pay TV company MultiChoice (DStv) have said they will resist impending price increase by the company.
The subscribers, who have written a petition against the planned tariff increase, said DStv has abused its power of dominance in Nigeria.
Daily Trust reports that MultiChoice Nigeria Limited had recently announced that it will be increasing its rates for DStv and GOtv subscribers from 1st June, 2020, citing the increase in Value Added Tax (VAT) rate as the reason for the price increment.
But the subscribers in the petition against the increase written to the Federal Competition and Consumer Protection Commission (FCCPC) and copied to the National Broadcasting Commission (NBC) and the National Assembly, said the Pay TV company had in the past disobeyed court injunctions stopping it from increasing tariffs in Nigeria.
The petition was written on behalf of the subscribers by Festus Onifade Esq., Managing Partner at FS Onifade & Associates.
It read in part: “Our petition is anchored on ‘POWER OF ABUSE OF DOMINACE’ as provided for in new law Federal Competition and Consumer Protection Act 2018 signed into law by PMB in February 2019.
“The Act empowers the Federal Competition Consumer Protection Commission to fix and regulate prices of goods and services where such infractions have been brought to the notice of the commission.
“In the past, there has been court injunctions against similar increment which was not obeyed. We hope that the commission under law and new identity will have the courage to save the Nigerian consumer from another oppressive private monopoly.”
The coalition of consumers said this is the third time in the last five years DStv would be increasing its tariffs.
“First in 2015, another in 2018 and now 2020. This is in spite of repeated outcries by Nigerians and court injunctions restraining Multichioce from increasing their rate on those previous occasions which were blatantly disobeyed.
“Our client and many other concerned Nigerians are particularly worried at the insensitive nature of Multichoice Nigeria Limited who despite the global economic downturn and the prevailing corona virus crisis seem impervious to the sensitivity of its customers.
“Sir, you may have noticed that the national lockdown and government ‘Sit-at-home’ order has directly increased the patronage of the product and services of the providers – DStv and GOtv, without commensurate increase in contents, particularly in view of the suspension of world major sporting live events and TV drama series ectera; and yet consumers are left with no other option, not only to pay, but imminent increase.
“Our client also noted with grave concerns that apart from the pattern of (content recycling) of repetitive films and programs, many local TV Channels which ought to be free are paid for by Nigerian consumers as opposed to the practice of enjoying free local Tv channels in other parts of the world.
Worst still is that with a monthly premium subscription rate of about N16,000, our client and Nigerian consumers are greatly surcharged. This is because with an average of 720 hours per month, an average view is about 6 hours per day. If usage is converted to hourly basis, this same amount will give a consumer four months value. Hence, we advocate ‘Pay as you use.’
“Sadly, Nigeria with over 40 percent of its subscribers in Africa; Nigerians and our client in particular continue to groan under the repressive incessant price hike because of the dominant position Multichioce Nigeria Limited occupies where it determines market prices unilaterally without recourse to it closest competitor (StarTimes) or consideration for the welfare of its customers.
“We believe strongly that Multichoice Nigeria Limited is in gross violation of the provision of Section 72 of Federal Consumer and Competition Law 2018 which amounted to abuse of power of dominance,” the petition said.
The consumers, who called on the Federal Government to prevail on Multilchoice Nigeria limited to suspend its planned price increment as it would amount to anti-competitive act, arbitrariness and against the welfare of the consumers, also said the FCCPC should invoke its power under this Act to regulate the price as this would be in the overall public interest.
We’re working on consumers’ petition against MultiChoice – FCCPC
The FCCPC confirmed it received a petition from the Coalition of Concerned Consumers on planned price hike of MultiChoice’s DSTV and GoTv.
The Director General of the FCCPC, Barrister Babatunde Irukera, told Daily Trust that even prior to the petition, the FCCPC had commenced an engagement with MultiChoice on the development.
Irukera said his commission had written to MultiChoice seeking clarification and explaining the need not to hike prices of digital pay TV at a time of global pandemic in which many people depend on the media for information on coronavirus disease 2019 (COVID-19).
The letter, seen by Daily Trust, was dated May 11, 2020 and signed by the Commission’s Head Legal Services, Tam Tamunokobia.
MultiChoice speaks on increase
In a response letter dated May 13, 2020, and signed by MultiChoice’s Chief Executive Officer, John Ugbe, the company told the FCCPC it was merely implementing Federal Government’s hike in Value Added Tax from 5 to 7.5 percent.
Ugbe said the additional 2.5% increase would not go to MultiChoice, but to the Federal Government as required by Section 34 of the Finance Act (as amended).
“We would like to state at the outset that MultiChoice has not announced a price increase. We have merely effected Federal Government’s VAT rate increment of 2.5%,” the statement said.