Zimbabwe News and Internet Radio

MultiChoice in payments pickle

By Darlington Musarurwa

Anxiety is growing among subscribers of the digital television service provided by MultiChoice Zimbabwe as banks throttle payment platforms, especially for non-AC holders.

MultiChoice Zimbabwe
MultiChoice Zimbabwe

Even independent agents no longer facilitate payments. The Reserve Bank of Zimbabwe sounded the alarm last year, with outflows for DStv subscriptions – funded through nostro accounts – topping US$207 million in the six-month period to December 2016.

Nostro accounts are usually US-denominated accounts held by local banks in other countries. Payments made through such facilities for MultiChoice’s DStv service and card subscriptions were the second-largest user of foreign exchange after fuel last year.

They also eclipsed funding for maize at US$109 million, machinery and telecommunications equipment (US$97,2 million), electricity (US$67 million) and agricultural plant, machinery and equipment (US$37 million).

Average monthly payments rose from US$20 million in July to US$44 million by December last year. While fuel accounted for 13 percent of balances in the nostro accounts, card payments and Pay-TV subscriptions chewed up eight percent.

The central bank warned on February 4, 2017 that “spending more foreign exchange on DStv subscriptions than on raw materials to produce cooking oil, for example, is not only counter-productive but also illogical”.

Many banks subsequently disconnected mobile payment platforms for the service, except for accounts that are directly funded with United States dollars.

In an environment where an estimated five million people do not use financial services offered by commercial banks — according to FinTrust survey — many DStv subscribers have been sidelined.

Multichoice Zimbabwe GM Mr Norman Raisbeck told The Sunday Mail Business recently that, “Skynet (Pvt) Ltd t/a Multichoice Zimbabwe is aware of the payment difficulties currently facing subscribers and the country due to the recent announcements by some banks.

There are currently 10 banks that are facilitating DStv payments utilising various platforms,” he said.

Though banks are facilitating processing payments, the charges are punitive. For lowly-priced bouquets, banks charge a flat fee of US$5, while premium packages attract 12,5 percent of the total price, which translates to more than US$8 per account.


It is the sheer amount of outflows that is worrying policymakers. MultiChoice Zimbabwe claimed last week that payments to the South African-headquartered MultiChoice Africa were not made by the “franchise”, but by banks.

MultiChoice Africa, a subsidiary of US$91 billion form Naspers, told this newspaper recently that the business did “have a permanent operation or presence on the ground”.

“It is important to note that MultiChoice Zimbabwe is a franchise of MultiChoice Africa Limited in Zimbabwe. As such, Skynet (Pvt) Ltd trades as MultiChoice Zimbabwe to provide subscriber support and management services to DStv customers — this includes marketing and customer care.

“Therefore, neither Naspers nor MultiChoice Africa Limited have a permanent operation or presence on the ground,” said Ms Caroline Creasy, MultiChoice Africa GM (corporate affairs).

The local franchise employed 145 people and supported 89 indirect jobs for installers and agents, MultiChoice said.

RBZ Governor Dr John Mangudya said last week MultiChoice had agreed to open a Zimbabwean bank account for local payments. As of last week, he noted, outstanding amounts due to MultiChoice stood at US$9 million.

Currency headache

The runaway success of digital television services, especially in jurisdictions where national television stations are finding it difficult to switch from analogue to digital systems, has led to significant outflows of foreign exchange.

But cash-strapped economies are failing to make payments.

As at May 31, 2017, MultiChoice had more than US$289 million in “cash trapped in Nigeria, Angola and Mozambique”. Weak currencies are also putting pressure on margins. Billing in local currencies has resulted in exchange losses, especially upon conversation to US-dollar values, which is the currency used to buy content. As such, MultiChoice Africa’s trading losses for the year ended May 31, 2017 widened by more than 842 percent to US$358 million from US$38 million in the same period a year earlier.

With more than 10 million active subscribers in Africa, MultiChoice is now focusing on “bouquet restructuring” and reduction of “non-performing content”.

In May this year, market rumours were that Naspers, buoyed by the success of its investment in China’s Tencent, was considering selling its Pay-TV business to fellow South African firm, MTN. However, the mooted disposal did not include the South African division, which continues to perform relatively better than its peers.


Around the continent, MultiChoice is facing growing competition from old and new Pay-TV services such as Kwese TV, MultiTV, StarTimes, Zap and Zuku.

StarTimes, a Chinese business considered one of the fastest-growing operators of digital TV networks in Africa, recently concluded a new multi-year agreement with Eutelsat Communications for accelerated roll-out of digital broadcasting services across the continent.

It is currently connected to over seven million homes in 13 countries, and there are plans to expand into the DRC and Zambia this month.

The seven-year-old Zuku, based in Angola, mainly serves Lusaphone countries; while Zuku is a Kenya-based service for East Africa that has been successfully launched in Kenya, Tanzania, Uganda, Malawi and most recently Zambia. MultiTV is based in Ghana. The Sunday Mail