In Nigeria, MultiChoice has no choice

In Nigeria, MultiChoice has no choice

Africa’s leading entertainment company, MultiChoice, is left with no choice in Nigeria than to switch to a pay-per-view (PPV) billing model against its monthly fixed subscription. This tussle has been between the Federal Government in the country and MultiChoice since 2020 when the entertainment company rebuffed the proposed pay-as-you-go (PAYG) policy of the Senate saying it is impossible. This might cause the company to lose its largest market which is Nigeria.

Pay-As-You-Go or Go?

CEO MultiChoice Nigeria, John Ugbe in 2020 cleared that PAYG is often confused with PPV and the former is only used in the telecommunications sector – a metered service that ensures consumers are billed only for service they consume and not for a fixed period. Telecommunications charge for time consumed, while satellite broadcasters charge for content.

“It is only in instances where there is two-way communication between the device at the subscriber’s home and the headend of the pay-tv service provider, which will enable the provider to determine when a subscriber is connected or not, that a billing system could be designed to take into cognizance the subscriber’s behaviour”.

“The economies of scale model employed by broadcasters mean that subscribers pay less. We are yet to see a pay-TV business anywhere in the world that does PAYG in the sense intended here. We do not believe the model is technically or commercially feasible”, Ugbe added.

Reintroduction of Pay-Per-View (PPV)

“Nigerians are demanding that, rather than paying fixed rates for packages monthly, pay-TV service providers should introduce a subscription model which allows subscribers pay per-view to enable them match their TV consumption to subscription as it is the case with electricity metering and mobile telephony”, said Abba Moro, a member of the Senate in March this year.

“The pay-per-view that Nigerian subscribers are demanding, is a flexible model plan of subscription which allows subscribers of pay-TV to pay-per watch, to avoid paying for services which they do not consume”.

Moro sponsored a motion titled: “Nigerians dumbfounded, outraged over Pay-TV tariff hikes, demand for pay-per-view subscription model” – after a week of 14% increase in the price of subscription packages of DStv and GOtv which was not in agreement with the economic situation of the country. This is also especially that the electricity in the country in nothing to write home about. It places subscribers of monthly pre-paid subscription model at a disadvantage.

The outcome of the plenary saw to the appointment of a seven-man ad hoc committee to investigate the pricing policies of MultiChoice in Nigeria in comparison with international practices.

Two petitioners, an ongoing court case, and MultiChoice deviate behaviour

Legal practitioner, Festus Onifade and Coalition of Nigerian Consumers sued MultiChoice and the Federal Competition and Consumer Protection Commission (FCCPC) – first and second defendants – on March 30, 2022. This is following MultiChoice’s announcement on March 22 to increase subscription prices effective from April 1.

The firm said from April 1, 2022, subscribers will pay more for all its bouquets and its premium package on DSTV will cost N21,000, no longer N18,400. Compact Plus which cost N12,400 before will now go for N14,250, while Compact will cost N9,000 instead of N7,900.

The tribunal granted an ex-parte counter motion (from/out of the party/faction of) ordering the parties to remain status quo ante bellum (the situation as it existed before war). However, MultiChoice went ahead with its initial plan – defying the court’s interim order. On April 11, the court directed MultiChoice to maintain its March 30 ruling pending hearing and determination of the matter.

Onifade, in the amended originating summons dated June 17 but filed on June 20 demanded for N10 million in damages from the operators of DStv and GOtv and the adoption of pay-as-you-view billing model in short order.

Addresing the tribunal, Onifade prayed the court to command MultiChioce directors to appear before them and “show cause why they should not be committed to prison for willful disobedience of the order of this honourable tribunal granted on March 30 2022”. And an order for them “to show cause why MultiChoice should not be made to pay 10% of its annual turnover for contravention or failure to, comply with an interim order of this honourable tribunal”.

Jamiu Agoro, counsel to MultiChioce stated that his client did not act in contempt of the tribunal. He said that the first defendant had already set up all their devices for the increase in tariff to take effect before the tribunal made its order.

While addressing a three-member panel headed by Thomas Okosun, Agoro held that the original summon was grossly incompetent. “It is our submission that this application is grossly incompetent. The laws are explicit on how contempt proceedings should be initiated”.

“The instant application has not fulfilled the legal conditions for the initiation of Contempt proceedings. Prior to the filing of a motion for Contempt, the alleged contemnor must have been personally served with forms 48 and Form 49. These conditions have not been met prior to the filing of the instant application”.

In his defense, Agoro explained that the tribunal is addressed as Competition and Consumer Protection rather than Federal Competition and Consumer Protection in heading of the original summon. He further stated that the complainant had no evidence of damages suffered.

He also maintained that Onifade should have waited for the decision of FCCPC before filing an appeal at the tribunal. “Before this matter can come, section 47(2) of the act that governs this tribunal states that the matter must have gone through the commission (FCCPC). So the matter can only come to the tribunal if they are not satisfied with the decision of the commission”, Agoro said.

Meanwhile, the complainant, Onifade, while arguing his case, said he had resorted to the tribunal due to the refusal of the Federal Competition and Consumer Protection Commission to hear and determine two of his complaints bordering on tariffs increase in May and June 2020.

“It is our view that there is no mandatory conditions to be fulfilled by an aggrieved Consumer before approaching the tribunal”, Okosun countered the first defendant.

The court adjourned the case to July 25 and ordered the company to pay N100, 000 to the tribunal for failing to file processes – documents and applications – in response to the substantive suit.

A Ruling: Suit dismissed and Chances at PPV

The Competition and Consumer Protection Tribunal (CCPC) in Abuja had on Tuesday, September 6 stated that Onifade’s claim that the company abused its power of dominance in the market lacked merit and hence, the suit was dismissed. “Nigeria operates a free market economy, the argument lacked merit”.

It also held that the Federal Competition and Consumer Protection Commission (FCCPC) had no powers to regulate prices of goods and services. It resides in the Nigeria’s President.

“Only the president has the powers to regulate or fix prices of goods and services under stipulated circumstances which do not apply in this instance”.

“The price is valid”, it added.

The reversal of MultiChoice’s subscription price increase was also rejected.

It further dismissed Onifade’s demand for N10 million damages and failure to establish proof of any “psychological traumas, hardships or violation of human rights” as regards the price hike.

The tribunal headed by Okosun called for an investigation led by FCCPC to verify if pay-as-you-view (PPV) tariff regime was operational in other countries especially South Africa within the last six months.

“If that is the case, ensure that it is effected in the country,” the tribunal ordered.

Due to MultiChoice disregard of the interim order, the tribunal dismissed the preliminary objection raised by Agoro while the company’s managing directors should appear before it on September 8 with an audited financial report.

“The Managing Director and directors of the 1st defendant (MultiChoice) are to appear before this honourable tribunal with certified true copies of their audited financial report for the year 2021”.

The panel added that the audited financial report will “enable the tribunal determine the appropriate penalty to impose on MultiChoice for being in contempt of the orders of this honourable tribunal made on March.”

According to Section 51 of the CCPT Act, a corporate body is liable upon conviction for contempt of a fine not less than “N100 million or 10 per cent of its turnover in the preceding year”.

Fine against court order and an instantly discharged case

Following the order of the court on September 6 for MultiChoice to produce an audited financial report on September 8, the first defendant was held contempt of the tribunal. However, MultiChoice and its counsel, Agoro supplied no staff members before the court.

The CCPC tribunal sitting in Abuja on Thursday, September 8 advanced to fine the company a sum of N25 million.

“The first defendant is contempt of this tribunal, so, we have reviewed the position of Section 51(3) of FCCPC Act, 2018 and in compliance with the provision of Subsection 2 of the same Section 51, we hereby order the first defendant, MultiChoice Nigeria Ltd, to pay the sum of N25 million only as an administrative penalty for contempt of this honourable tribunal”.

According to Agoro, there was no management staff of the company available to present the audit report. The lawyer, in defense of the company appealed that he had filed two applications before the tribunal. This was after the tribunal had established a judgement.

One of the two applications was “seeking for staying of execution”.

“In view of our motion for stay of execution which has been served on all parties, we pray that you set the motion down for hearing for the tribunal to look at our application if it is meritorious or not”, he noted.

The tribunal maintained that the appearance of the managing directors of the company was the order of the day. It also rebuked its motion to appeal stating that there was no notice before it.

“You know the law, counsel. First, those papers are not with us. The only reason we are here this morning is to make a pronouncement on the penalty the 1st defendant MultiChoice is to pay”, chairman of the tribunal Okosun said.

“It is your right to appeal. The only point I took from you is that you don’t have your details here, rather than raising issues of appeal. It is your right to appeal.”