A George businessman has filed a complaint with the Competition Commission against JSE-listed broadcasting giant MultiChoice after the pay television service ramped up its DStv subscription fees
A George businessman has filed a complaint with the Competition Commission against JSE-listed broadcasting giant MultiChoice after the pay television service ramped up its DStv subscription fees ahead of the Rugby World Cup, which kicks off on Friday.
Philip Nottingham, who owns Elevate Action Centre, is one of thousands of restaurant, bar and entertainment business owners across the country who was advised almost overnight of price hikes of up to 50% for MultiChoice’s DStv services.
Nottingham said he filed the complaint “in a moment of anger” after MultiChoice advised that prices would be hiked on 1 September, just before the Rugby World Cup.
In his complaint, he asked the commission to investigate whether MultiChoice was “taking advantage of its monopoly position”.
“The first thing was that there was very little time given by way of notification. I got an email last Wednesday saying that these changes will be implemented from 1 September. When I turned on the television the next day, DStv had reduced the number of channels that we get,” he said.
“The price went up from R800 to R1 200 to get the same channels we were getting before.
“DStv will tell you that the increase on their ‘top-of-the-range’ package is from R970 to R1 200 — or 23.71%. What they are not saying is that previously the ‘Essential’ package included all sport, the full SuperSport bouquet.
“To continue with the same channels as previously, we have had to increase our subscription cost from R800 to R1 200 per month for the ‘Play Ultra’ package — a 50% increase,” Nottingham said.
He only has one television on his business premises but several restaurant owners he knows have as many as four, meaning they were in for a hefty price hike to cover all sets.
Nottingham said the timing of the hikes was “suspicious” and said that there appeared to be an abuse of the firm’s monopoly position in terms of broadcasting the Rugby World Cup.
“My issue is that they are a monopoly and they would not want to admit it. There is also a degree of opportunism in the timing of the price increases just before the Rugby World Cup.
“For us, having a television is a ‘nice to have’, so parents have something to do while children engage in activities, but for the guys in the restaurant industry it is an essential, because if they do not have it and the competition does — especially for events like Formula One, English football and the Rugby World Cup — they will lose business,” he said.
Restaurant Association of South Africa CEO Wendy Alberts said the industry had called for DStv to review its “price increases of up to 50% and an unannounced change for restaurant subscribers” ahead of the Rugby World Cup. She said the price hikes would make it unaffordable for the hospitality industry to screen major sporting events.
“The calculated timing of this massive 50% price increase is designed to hold our members and the broader hospitality industry to ransom. This Rugby World Cup is a much-needed opportunity to bring South Africans from all walks of life together, proudly supporting our country,” Alberts said.
She said the association had engaged DStv “to do the right thing and review its pricing model” but had also approached the Competition Commission to investigate the matter.
“The Rugby World Cup belongs to all South Africans and should not only be accessible to the privileged. It is an incredible opportunity to stimulate tourism and boost the hospitality industry, which is still recovering from the effects of lockdown, load-shedding and many more challenges,” Alberts said.
“Hospitality and sport go together. Everyone wants to watch their favourite sports team compete in a convivial environment, socialising with friends and family, enjoying a beer and a hamburger.”
Competition Commission spokesperson Siyabulela Makunga said the regulator had received Nottingham’s complaint about MultiChoice on 4 September.
“The complaint is currently being screened to establish if there’s a contravention of the Competition Act. The commission would obviously appreciate the submission of credible information that would help expedite our investigation,” Makunga said.
MultiChoice said in a statement that it had not yet been notified of the complaint filed with the regulator.
“MultiChoice continues to focus on delivering the best possible entertainment and invests heavily in content rights and technology to enhance the viewer experience.
“Tariff adjustments are impacted by macroeconomic conditions and take into account the impact of inflation and a weak ZAR exchange rate on our business,” MultiChoice said.
“DStv remains committed to providing the best value and access for Superfans and have recently secured popular sports broadcast rights for another five years.
“We are offering packages which include great entertainment and a world-class sporting lineup to business customers, at prices varying between R400 and R1 200 per month, effective 1 September.”