Consumers call for boycott after MultiChoice hikes prices

A barrage of vile public criticism is being thrown at MultiChoice Uganda after the company announced that starting April 1, it would increase prices for its television bouquets for the second time in eight months.

The dominant player in the pay TV market in Uganda, which has been accused of abusing its monopoly status, MultiChoice Uganda announced that effective April 1, 2023, subscribers for DStv and GOtv would pay different rates – sparking off a social media firestorm that saw some people calling for a boycott of the company’s services.

MultiChoice Uganda issued a statement, noting that it “would like to notify its customers that our prices will be changing effective 1st April 2023. MultiChoice Uganda has considered the economic outlook in Uganda prior to making this business decision.”

The company, citing an increase in the costs of doing business, increased its DStv premium monthly package to Shs 275,000 from Shs 255,000, and family package from Shs 59,000 to Shs 64,000. Also, GOTV Supa prices increased from Shs 58,000 to Shs 65,000, and GOtv lite from Shs 14,000 to Shs 15,000, among others. The company had only increased its packages in September 2022.

Rinaldi Jamugisa, the public relations and communications manager at Multichoice Uganda Limited, said the increase in package prices was due to the rise of costs in doing business.

“We endeavour to keep prices as low as possible while ensuring that our customers continue to enjoy unparalleled access to entertainment, anywhere, anytime and with the best quality service,” Jamugisa added.

It was an explanation that was too weak to pepper over the anger boiling among consumers. Through his Twitter account, journalist Simon Kaggwa Njala announced, “Well @DStvUganda, it was nice subscribing to your services for a painful 12 years. Your intermittent upward rate reviews are incompatible with your services and cannot keep us together. Enjoy other subscribers.”

Chris Obore, the director of communications at the Parliament of Uganda, added, “DSTV is in self-destruct mode. You can take clients for granted, but the day they give up, the books will not balance. The idea should be to attract more clients instead of chasing them away. Increasing prices nearly after every 6 months is a sign of strategy gone wrong.”

Many consumers have now threatened to ditch MultiChoice’s and switch to other’s services. Gabriel Buule, a journalist, noted that “whoever regulates TV services must rescue Ugandans from DStvUganda. New competitors must be invited to tame the dubious charges.”

The Uganda Communications (Competition) Regulations 2019 seek to ensure, among other objectives, that communication services are reasonably accessible and fairly priced and to promote and maintain fair and efficient market conduct. The commission is empowered to take action to prohibit what it considers to be anti-competitive agreements, abuse of dominant position and anti-competitive mergers, takeovers and consolidations.

The Uganda Communications Commission (UCC), the regulator of the market, also weighed in on the MultiChoice issue. Irene Sewankambo, the acting executive director of UCC, tweeted: “UCC continues to undertake its role on tariffs but this can’t be done devoid of the market ecosystem as is international best practice. This is why subsidies are made to facilitate the provision of services in some places. UCC promotes cost-oriented pricing by licensed providers, balancing ensuring the sustainable provision of quality services and affordability,” she said.

Sewankambo noted that the recent re-organization within MultiChoice coincided with the global economic downturn that impacted the costs of supplies to operations. 

Her explanation could not clearly show how economic changes had affected MultiChoice’s operations. MultiChoice’s decision to increase its prices twice within eight months points to the company’s exploitation of the lack of a competition law. For nearly 20 years, consumer protection groups have lobbied government for the introduction of a competition law.

But for years, government has resisted the idea, with some within the cabinet arguing that such a legislation goes against the spirit of free market forces, on which a large part of Uganda’s economy is founded.

A free market determines price without government intervention. However, those against free market forces say that this model allows the creation of monopolies, which leads to exploitation of consumers through exorbitant prices.

Nevertheless, Uganda has made progress on the country having its own competition law. In December 2022, the government tabled the Competition Bill 2022 before parliament, a move that consumer rights groups applauded.

The Competition Bill deals with four main groups of behaviour: horizontal arrangements (mainly arrangements between firms to maintain and control prices); vertical arrangements (including exclusive dealing, resale price maintenance, geographical limitations on activities and tied dealing); misuse of market power by monopolies and large firms; and control of mergers, acquisitions and joint ventures to ensure that they do not impair overall competitive conditions in the market. Parliament’s committee on tourism, trade and industry is said to be scrutinising the bill. There is no indication on when they will be done.