Pay-TV Service Canal+ Faces Closure in Ghana Due to Disputes Over Subscription Fees with MultiChoice
Canal+, the French pay-TV company set to take over MultiChoice, could face significant operational and strategic challenges across Africa if regulatory actions similar to Ghana's continue. The National Communications Authority (NCA) in Ghana has ordered the local shutdown of MultiChoice, Africa's largest pay-TV operator, in 30 days from now, on Sept. 8.
The decision comes after MultiChoice increased its subscription fees by 15% in April with little notice, a move that has been met with criticism from Ghanaian authorities and consumers. The Ghanaian government has expressed concern about the steep increase in subscription charges for local pay-TV services, partly caused by rampant inflation rates and weak currency across the continent.
MultiChoice, however, has argued that it has tried to keep subscription fees low despite the challenging competitive and macro-economic environment. The company's managing director, Alex Okyere, has stated that the shutdown of its operations in Ghana would result in the loss of jobs for staff, installers, agents, and retailers.
If MultiChoice loses its license in Ghana, there is a risk that more African governments and regulators could follow Ghana's example and start to retaliate against MultiChoice. This could create regulatory, financial, and operational challenges for Canal+, potentially slowing or undermining the benefits of their $3 billion MultiChoice acquisition and complicating their expansion plans across Africa.
The potential consequences of such actions include loss of access to key markets, regulatory and political risks, impact on investment plans, competitive disadvantage, operational restructuring complexity, and uncertainty for the joint streamer venture Showmax of MultiChoice and NBCUniversal.
Canal+ has obtained anti-trust approval for its takeover of MultiChoice, with some regulatory approvals still pending in South Africa, expected to be cleared by Oct. 8. However, the company has declined to comment on the Ghana issue due to it not yet being the owner.
Maxime Saada, CEO of Canal+, has stated that changes will be made to MultiChoice's operations to bolster the pay-TV business as soon as the takeover is complete. A synergy plan will be launched as soon as Canal+ takes control of MultiChoice. Saada intends to provide benefits to consumers across all African geographies by the end of the year, with some plans to generate synergy already set to be launched by the beginning of next year.
Despite the regulatory challenges, Canal+ is optimistic about its African expansion. The company already runs Viaplay and is the second-largest shareholder at 37.2% of the VIU video streaming service available in South Africa. Saada notes that by the beginning of next year, if everything goes to plan, some plans to generate synergy will already have been launched.
However, the way forward for the money-guzzling joint streamer venture Showmax remains unclear. The shutdown is due to MultiChoice's refusal to cut its subscription rate by 30%, a demand made by the Ghanaian communications minister, Samuel George. The local regulator told MultiChoice in Ghana that it has 30 days to "present its views, or provide remedial action, and submit a written statement of its objections to the suspension of the authorization".
As the situation unfolds, it is clear that Canal+ and MultiChoice face a complex regulatory landscape in Africa. The companies will need to navigate these challenges carefully to ensure the success of their ambitious expansion plans and the continued growth of pay-TV services across the continent.
Technology could become a significant factor in the challenges Canal+ might face while navigating the complex regulatory landscape in Africa, as potential consequences of regulatory actions against MultiChoice could affect digital services like Showmax. The synergy plan to bolster MultiChoice's operations, once executed by Canal+, aims to benefit consumers across various African geographies through digital means, highlighting technology's critical role in their expansion plans.
