Chief Executive Of FCCPC, Tunde Irukera Addresses Matters Arising In The Nigerian PayTV Market
The Chief Executive of the Federal Competition and Consumer Protection Commission (FCCPC), Tunde Irukera, was on Channels TV programme, Sunrise Daily on July 10, 2020 to shed light on the role of the Commission in ensuring the continued consumer protection during the COVID-19 pandemic.
Part of the discussion centred around the Pay TV market in Nigeria, which has been receiving a lot of attention in recent times. He addressed the recent increase in the price of Pay TV subscriptions, the demand for the Pay Per View model, distinguished it from the Pay As You Go model, and explained why the Pay As You Go model may not be applicable to the Pay TV market.
Below is an excerpt of the interview:
Interviewer: How about for services where the prices are just increased. For instance, there’s this talk about the PayTV platform that people are saying, reduce your prices because it’s not a good time or something like that?
Irukera: Whether goods or services, what goes into pricing to some extent is cost. And so, services also have increased cost. I mean, operating in a time like this by itself increases cost. And one of the blanket excuses that almost every service or goods provider in Nigeria attributes price fluctuations to is currency forex rate. And so, we understand that and we’re managing that process as best as we can. What we think, and the way we look at it is that, show us what your business model is, what your desired margin — at what point you’ve considered that your business is profitable?
And so, if that was a 20 percent margin, our concern will be if at the time like this when there’s greater demand for your business because of a shock to the market based on the pandemic, you now move that margin from 20 percent to say 80 percent. Then, that obviously is problematic. That’s exploitative. And it’s unscrupulous.
Interviewer: Is that the kind of discussion you had with the DSTV for instance?
Irukera: Oh yeah. And when we saw the price increase with DSTV, we wrote them a very long letter and they responded very quickly, saying that what they have done at this time is a 2.5 percent increase that captures what the law says. Meaning, VAT increased from 5 percent to 7.5 percent, and that’s all they’ve done. That’s a colourable claim, but it’s at least a persuasive explanation for what has happened. So, our investigation remains open and it will raise other questions of what the real margin was, what is acceptable, what is not acceptable. And so, that conversation is continuing. And for one thing, it’s quite frankly, we think that the way it was communicated was insufficient. People recognize taxes and they’ll hold the government responsible for increase in taxes. They will not hold companies responsible for increase in taxes.
Interviewer: You know, the other side to that particular discussion around cable TV is pay-as-you-view or pay-as-you-watch as some people have called it. I know the FCCPC has been quite busy on social media, responding to issues around telecoms, but I know that cable TV has also been a major issue. So, is there a position really of the FCCPC regarding pay-as-you-watch or you’re just watching to see how these things unfold and then you come in eventually to make a statement?
Irukera: Okay, good. That’s a very good question. So, our role is to make sure that consumers get the best possible from a consumer protection standpoint — from a competition standpoint to make sure that the playing field is level. We don’t impose business models on operators. They choose what they want to do, and the price is something that is negotiated between consumers and sellers. But if we see that there’s a business model that is more beneficial to consumers, we will certainly advance that. My challenge with what sometimes is the discussion around pay-as-you-go in Pay TV is that there is a disconnection and we’ve been through this — we’ve conducted some investigations and done some surveys in different parts of the world. The pay-as-you-go model in telecommunications is not necessarily applicable and so we confuse it sometimes with pay-per-view.
Pay per view is not that you pay for what you view from the standpoint of when you turn your television on. It is primarily that there are certain programs maybe a boxing match, a soccer match or some movies that are still in the cinemas, but that some of the PayTV operators have bought that content and you can literally request instead of going to a stadium or going to cinemas to watch — you can watch it in your home and pay for that view. That’s pay-per-view, but we confuse it with per-as-you-go. What people are asking for in pay-as-you-go is when you turn on your television and you’re watching, you pay. When you turn off your television and you’re not watching, you don’t pay.
It’s difficult because what it is, is that the content has been created. What you’re paying for is access. How you use the access is entirely discretionary and is up to you. Quite unlike a telephone where the clock starts and the airtime goes down, you’ve paid for content.
