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The company is contesting the lawsuit initiated by Maduabuchi O. Idam, Esq., under case number FHC/ABJ/CS/563/2024. This suit also seeks a court order requiring Multichoice to allow the rollover of unused subscriptions upon their expiration for Idam and other Nigerian customers, thereby enabling them to make the most of their investments in the company's services.
The suit includes several parties, such as the Federal Competition and Consumer Protection Commission, the National Broadcasting Commission, the Attorney General of the Federation, and the Minister for Justice.
Multichoice has been accused of taking advantage of Nigerian consumers.
Over the years, the Pay-TV provider has been under scrutiny from lawmakers and consumer protection agencies regarding its pricing strategies.
In this recent lawsuit, Idam claims that GOtv subscriptions are not metered and do not reflect actual viewing time; instead, customers lose access to services once their subscriptions expire, irrespective of their usage.
He argues that Multichoice raises the prices of GOtv and DStv packages arbitrarily, without providing sufficient justification for these increases, a practice he asserts has been ongoing for years.
Idam points out that in addition to the alleged arbitrary price hikes that began in May 2024, Multichoice does not permit customers to roll over unused subscriptions, which hinders them from fully benefiting from the services they have purchased.
He asserts that Nigerian customers are not adequately informed about the billing rates applicable to their subscriptions, urging the court to recognize such business practices as oppressive and exploitative "against me and other customers in Nigeria," and in violation of the Federal Competition and Consumer Protection Act, 2018.
Idam contends that without a court mandate for Multichoice to implement metering for pay-per-view subscriptions and to allow the rollover of unused subscriptions, customers will continue to be at risk from the company's practices.
In response, Gozie Onumonu, the Head of Regulatory Affairs and Government Relations at Multichoice, refutes the applicant's assertions in court documents examined by Nairametrics.
He emphasizes that Multichoice and the GOtv license holder provide transparent billing details, as evidenced by receipts that indicate the payment date, subscription period, amount, and validity.
Onumonu highlighted previous clarifications made by Multichoice and other pay-TV providers during discussions with the NBC regarding the practicality of the Pay-As-You-Go (PAYG) model, asserting that it is neither commercially nor technically feasible in satellite broadcasting due to existing technological constraints.
“PAYG has been thoroughly examined by the National Assembly on multiple occasions. During the 8th Assembly, the House Committee on Information, National Orientation, Ethics and Values, chaired by Hon. Olusegun Odebunmi, concluded that the claims of excessive Pay-TV subscription fees against Multichoice and the GOtv license holder were unfounded and that the PAYG model is not viable in the broadcasting sector.”
He also noted that the PAYG issue was part of the FCCPC's investigation into consumer rights violations in 2015.
Furthermore, he pointed out that Nigerian consumers frequently confuse Pay-Per-View (PPV) with the PAYG model utilized by mobile telecom companies.
He clarified that the PAYG model in telecommunications is a metered service where customers are charged solely for the services they use, as opposed to fixed subscription periods.
He explained that telecommunications companies can provide PAYG services because they operate a two-way communication system that enables them to track when a consumer is connected, what services are utilized, and for how long.
He stated that satellite broadcasters, such as Multichoice and the GOtv license holder, are unable to provide pay-TV services in the same way because satellite broadcasting is linear and does not have a return path from the consumer's residence to the transmitting satellite. As a result, decoders are incapable of sending information back.
Onumonu presented three key factors influencing the current subscription rates:
1. Exchange Rate Variability: Multichoice highlighted that Nigeria's inflation rate has been on a consistent rise, negatively impacting the economic landscape and the operational costs, which hampers their ability to sustain subscription prices each year. “At the time of our last price adjustment, the headline inflation rate was 28.20%, and it has now escalated to 33.20%. This inflationary trend has considerably raised both local and international input expenses.”
2. Rising Programming and Content Expenses: Onumonu noted that the expenses associated with programming and content have surged significantly over the last decade to fifteen years, affecting both the African market and the global stage.
3. Increases in Electricity Tariffs: “The Nigerian Electricity Regulatory Commission recently announced a staggering 230% hike in electricity tariffs for Band A customers, which encompasses numerous businesses. A significant portion of Multichoice’s and the GOtv license holder’s operational facilities and transmission networks fall under this category, leading to substantial increases in costs necessary for ensuring a reliable power supply critical for uninterrupted service delivery.”
In spite of these obstacles, Onumonu emphasized that Multichoice remains the foremost investor in Nigeria’s television and audiovisual sector, dedicating considerable resources to foster the development and distribution of local content.
“Over the years, Multichoice has invested a total of $514 million in nurturing local creative talent by sourcing and producing content for DStv, GOtv, M-Net, SuperSport, and Africa Magic, in addition to enhancing local production capabilities, including advanced studios in Ilupeju, Lagos.”
He urged the court to dismiss the application in the interest of justice and for the benefit of Nigerian subscribers.
It has been reported that the court has set December 5, 2024, for a hearing regarding this legal matter.
The hearing is a result of the Nigerian Competition and Consumer Protection Tribunal's ruling on July 12, 2024, which allowed lawyer Festus Onifade to withdraw his case against Multichoice Nigeria regarding the increase in GOtv and DStv subscription prices.
Initially, the tribunal imposed a fine of 150 million naira on Multichoice and required a one-month complimentary subscription due to their breach of interim orders. However, Multichoice contested this decision and sought a stay of proceedings.
The tribunal postponed the case to November, but Onifade opted to withdraw the lawsuit, a decision that the tribunal accepted without imposing any costs.
On April 24, 2024, Multichoice announced new pricing for DStv and GOtv packages. In a communication to subscribers, the company stated, “On May 1, 2024, we will implement price adjustments across all our DStv and GOtv packages. We recognize the potential impact of this change on you—our esteemed customer—but the rising costs of business operations have compelled us to make this challenging decision. Our commitment remains to provide you with the best entertainment and viewing experience, and we will continue to deliver high-quality content and exceptional service.”