Running a successful business is no easy task, most companies fail. Running a successful business in Africa requires prayer and fasting. The once-beloved DStv is engaged in so many fights at once, one wonders how it’s still standing.
Only a few years ago, DStv lost 230,000 Zimbabwean customers in just 6 months. They said it was due to power cuts and prevailing tough economic conditions. There is little incentive to subscribe when users don’t get the electricity to enjoy the said subscription.
Now, that load shedding and tough economic conditions have spread across the continent, even to their home country of South Africa. It looks like what happened in Zimbabwe is also happening there. Though not quite at the 230,000-subscribers-lost-in-6-months level.
The FIFA World Cup was held only a few months ago and it usually delivers new subscribers, some of whom stick around even after the tournament. Despite this, Multichoice expects its revenue growth to be below expectations for the year ending March 2023.
Sustained high levels of load-shedding are having a significant impact on the activity levels of the customer base.
Combined with the negative effect of a weak economy on consumer spending, and thus on the Group’s customer mix, indications are that 2H2023 revenue growth in the South African business will be below expectations.Multichoice
Luckily for Multichoice, it looks like the situation is not as dire in the rest of Africa. The festive period, buoyed by a World Cup for the first time, led to growth as would be expected, especially in Nigeria apparently.
However, they are yet to return to trading profitability in the rest of Africa. If the trends hold, they are poised to do that though. That shows just how tough they have had it, they are not profitable in the rest of Africa.
The worst kind of problem to have
Being Zimbabweans we can feel for Multichoice here. We are all too familiar with our businesses being negatively impacted by things outside our control.
Currency problems, an incompetent power company, excessive taxation etc. You might do everything humanly possible to set your business up for success but it’s hard to overcome those challenges.
I recently read a Twitter thread about a guy who lost an order to print 150 T-shirts. His is a small business that desperately needed such an order.
Unfortunately, the order came when there was no electricity and bad luck struck when their generator would not start up. They lost the order and at the end of the day, they had a generator repairman bill to settle.
These little things make or break businesses. For Multichoice, their problems do not end with load-shedding and economically struggling Africans. There is a real threat from streaming services like Netflix siphoning users from them. They have a plan on how to win that particular battle and we shall look at that next.