What DStv is doing to avoid another big price hike

MultiChoice has embarked on a cost-containment initiative to minimise future price increases, it’s parent company Naspers has said.

DStv implemented an increase in fees for South African subscribers earlier in 2016, with viewers paying up to 10% more than last year.

MultiChoice said it had to increase prices as it did because of the dramatic weakening of the rand over the past year.

Naspers said in its results for the year ended 31 March 2016, that 50% of the costs of its video entertainment business are in US dollars.

Since DStv subscribers are billed in local currencies, like the rand which has weakened against the dollar, this means that MultiChoice’s input costs have increased over the past year.

“In sub-Saharan Africa, we implemented substantial price increases, given the large US dollar cost base and weakening currencies,” said Naspers.

Although DStv in South Africa saw growth of 325,000 subscribers in the past year, it was not so prolific elsewhere.

“This combination of higher prices and weaker consumer sentiment resulted in a loss of 288,000 direct-to-home (satellite) customers.”

“To reinvigorate growth, the focus is now on managing costs, minimising further price increases to the consumer, and strengthening content in the mid and lower segments.”

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What DStv is doing to avoid another big price hike