Kwese TV distributor accuses DStv of consumer exploitation. Kettles & Pots?
In the letter Kwese TV distributors wrote to the Broadcasting Authority of Zimbabwe seeking to have their licence restored, the company accused BAZ of protecting DStv. Dr Dish explains in the letter that DStv is enjoying regulator protection while exploiting Zimbabwean customers.
The letter paints the picture that the current state of the TV market, where a monopoly is milking customers of their forex, is part of why an alternative in the form of Kwese TV is critically needed. Cancelling an alternative’s licence, therefore, Dr Dish says, is irrational and unpatriotic.
Dr Dish notes the following problems with DStv and solutions that Kwese TV brings:
- DStv exploiting Zim consumer by charging a huge premium compared to what they charge South Africans.
- DStv requiring Zimbabweans to pay in forex (USD, Rand…) resulting in DStv becoming one of Zimbabwe’s biggest forex outflow channels.
- Kwese content is much cheaper and therefore better for the consumer.
- Kwese TV is owned by the Zimbabwean “Masiyiwa family” and that because they understand the hardships faced by Zimbabweans, have accepted to take bond notes and electronic payments, basically taking a hit on immediate forex payments (required to buy that football content) while growing the Kwese TV service. You can read the full letter here.
This direct reference to DStv’s charging and labelling it exploitative is interesting coming from an operator as opposed to a regulator or a consumer protection body. The way we see it, especially concerning DStv, is that it’s market forces at play.
When a company is a monopoly in a market, you would certainly expect them to charge premium rates. It’s up to the regulator to ensure that operators charge consumer friendly tariffs. Multichoice doesn’t provide a basic human need like water or communication. Its customers choose to buy the entertainment subscriptions the same way some Zim customers choose to buy extremely expensive iPhones. Those that think iPhone prices are exploitative buy cheap Android phones instead. If you think DStv is too expensive, you switch to the cheaper ZBC TV.
Ironically, a number of times Econet Wireless Zimbabwe customers have complained that Econet data rates are exploitative and that the company takes advantage of having good network coverage, great signal, LTE and other advantages to charging a premium. The competition, just like DStv’s, is companies that have an inferior offering. No one forces consumers to choose Econet. Some Econet customers know that, while paying a premium, they are getting the best LTE in the market given their choices.
Dr Dish is right that having an alternative is a great thing for consumers. Prices come down the exact same way that DStv is reducing prices in Zambia, Kenya and other markets right now.
In Zimbabwe, if there was an MNO offering mobile data at par with Econet, customers of the largest mobile data provider in Zimbabwe would not be enduring an exploitative 15 cents per megabyte. It’s business. These ‘DStv is exploitative’ sentiments, therefore, feel very much the case of a kettle calling the pot black.
That said, the big problem for DStv is that the government of Zimbabwe owns a stake in Multichoice Zimbabwe. We the people, the taxpayers, own a stake in the company that’s not only charging us exorbitantly, it is taking that much-needed forex outside the country!
