Naspers plans to boost Nigeria TV offer as West African giant’s currency naira weakens

Naspers, Africa’s largest company by market value, via Multichoice pays for some content in dollars and thus vulnerable to exchange rate volatility.

NASPERS Ltd., Africa’s largest company by market value, plans to use new products and services to attract more customers to its $58-a-month television offering in Nigeria as a weaker naira increases costs.

The media company, which broadcasts English Premier League soccer and international dramas such as Game of Thrones in Africa through its Multichoice unit, pays for some content in dollars and is therefore vulnerable to exchange rate volatility, John Ugbe, chief executive officer of MultiChoice Nigeria, said in an interview on February 25 in Lagos, the commercial capital.

Cape Town-based Naspers is in talks with telecommunication companies about increasing its mobile-television offering in Africa’s biggest economy, he said.

“A lot of the content cost is dollar based” and there is a need to increase sales, Ugbe said. “It is for us to continue to make the product better, more affordable and continue to offer options to our subscribers.”

The naira has weakened about 18% against the dollar in the past six months, the worst performer among 24 African currencies tracked by Bloomberg, as oil, which makes up almost all of Nigeria’s exports, plunges. The country is one of Naspers’ three regional TV production hubs on the continent alongside South Africa and Kenya.

Bleak period

“We have so many eyes on DSTV,” Ugbe said, referring to viewers of the Multichoice offering, which costs from 1,500 naira ($7.42) to 11,650 naira per month depending on the package. He declined to give subscriber numbers, citing a company policy not to break down figures for individual countries.

“The economy is going through a bit of a bleak” period, he said. That “makes business tough, but we’ve been here for 22 years so have been known to survive it.”

Naspers had more than 8.4 million pay-TV subscribers as of September 30, the Cape Town-based company said in November. The TV unit had sales of 36.3 billion rand ($3.1 billion) in the year through March 2014, an increase of 20%.

Multichoice plans to broadcast its Africa Magic channel, which shows soap operas, movies and documentaries made on the continent, in the local Nigerian Igbo language later this year. That will extend its reach to a third ethnic group in the country after the start of offerings in Hausa and Yoruba in 2010. The Igbo people have a population of about 32 million and are from Nigeria’s southeast.

Mobile TV

Naspers is also making its decoders more power efficient to help Nigerian customers suffering from low electricity voltages and blackouts, according to Ugbe. The company started to offer DSTV Now in December, an application that allows subscribers to watch TV on their mobile phones and tablets.

“Nigerians are always on the move and need to go with their TV to put smiles on their faces,” he said. “We don’t just introduce technology. We style technology to suit our subscribers.”

Nigeria, Africa’s most populous nation with more than 170 million people, had about 136 million active mobile subscribers at the end of 2014, according to the Nigerian Communications Commission.

Naspers has Internet interests in about 40 countries and owns stakes in Hong Kong-based Tencent Holdings Ltd. and Russian Internet company Group Ltd. Its shares have risen 12% this year in Johannesburg valuing the company at 712.8 billion rand. That compares with a 6.8% rise on the FTSE/JSE Africa All-Share Index.

-Bloomberg News

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