How load-shedding is killing DStv
Load-shedding is hurting MultiChoice’s revenue and operations, with frequent power cuts resulting in significant subscriber declines.
The broadcaster released its latest interim results on Wednesday, reporting an after-tax loss of R911 million for the period between April and September 2023.
MultiChoice’s results presentation included a section dedicated to explaining its challenges, including load-shedding, and how these challenges impact subscriber growth.
“The South African business had to contend with the effects of ongoing high levels of load-shedding as 43% of the days in the reporting period were impacted by stage 4–6 load-shedding,” said MultiChoice.
“Subscriber growth was also affected by a decision to remove 311k non-revenue generating customers — linked to special load-shedding campaigns — from the base.”
“In total, customer numbers were 5% lower at 8.6 million, but encouragingly the premium base posted 5% growth, reflecting a positive trend for the first time in many years,” it added.
The section includes a chart showing the trend between higher load-shedding intensity and DStv subscriber growth.
Sadly, the chart doesn’t include meaningful figures, such as subscriber numbers or growth percentages.
However, it does show that as Eskom implements higher stages of load-shedding, DStv’s subscriber growth tends to decline. Then, when Eskom lessens load-shedding, DStv’s subscriber growth tends to increase again.
MultiChoice said load-shedding is the most immediate challenge it faces regarding subscriber activity.
“The number of active days per subscriber declined by 5% due to a significant increase in both frequency (i.e. number of days) and intensity (level 4 and above) of load-shedding, especially in the first quarter of the reporting period,” it said.
It said the proportion of days during which Eskom implemented stage 4–6 load-shedding has increased substantially since March 2022.
The percentage of days during which Eskom implemented stage 4–6 load-shedding sat at approximately 18% for the first half of the 2022/23 financial year.
This increased to 39% by the second half of the year, and during the first half of the 2023/24 financial year, it had climbed further to 43%.
To address this challenge, MultiChoice Group CEO Calvo Mawela said they are looking to sell solar power and battery backup systems.
The product development is currently in the proof-of-concept stage, Mawela told MyBroadband.
Aside from load-shedding, MultiChoice noted that other external factors significantly affected its subscriber base in South Africa and the rest of Africa (RoA).
In South Africa, MultiChoice noted that the country faces a cost of living crisis with high inflation, which has resulted in its customers being more careful when it comes to non-essential spending.
It highlighted that inflation across key markets in its RoA business had also increased substantially in recent months.
Of MultiChoice’s subscription revenue from the RoA, 40% comes out of Nigeria, and the weakening Naira has proved to be a significant headwind for the broadcaster.
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