Chief Executive Officer (CEO) of MultiChoice Nigeria, operators of DSTV, Mr. John Ugbe, has declared that Pay-As-You-Go (PAYG) billing model is not technically and commercially feasible.
Ugbe made the declaration, Monday in Abuja while responding to queries by Ad-Hoc committee of the House of Representatives, investigating the non-implementation of PAYG subscription regime by the company and other operators in the industry.
He said the model as suggested by the lawmakers was possible in the telecommunication industry, because it was two-way system, while the reverse was the case in broadcasting, adding that billing technology was one of the most expensive in the industry.
“It is only in instances where there is a two-way communication between the device at the subscriber’s home and the headend of the pay-tv service provider, which will enable the provider to determine when a subscriber is connected or not, that a billing system could be designed to take into cognizance the subscriber’s behaviour.
“The economies of scale model employed by broadcasters mean that subscribers pay less. We are yet to see a pay TV business anywhere in the world that does PAYG in the sense intended here. We do not believe the model is technically or commercially feasible,” he said.
He however blamed the recent hike of in DSTV subscription rates on market forces which he named to include “cost of procuring technology, infrastructure, operational costs, like high cost of diesel and so on. If all those inputs shift, and of course they have shifted, we have to move in order not to shut down”, adding that “due to the current adverse economic situation, some of these factors have over the years negatively impacted our cost of doing business and have put us under very challenging conditions, including the new VAT rate of 7.5 percent.
Not satisfied with his submissions, the Committee headed by Hon. Unyime Idem directed the CEO to liase the company’s board, with a view to adopting the PAYG model, as well as revert to its old subscription rates.
“We are not against you increasing your tariff but the timing. Nigerians are facing serious challenges now, so you have to go back and look at your system. For us, there is no going back on Pay As You Go,” Idem said.
