Multichoice’s Market Cap Tops $3 Billion On JSE Debut

MultiChoice, Africa’s biggest pay-TV group, debuted on the Johannesburg Stock Exchange on Wednesday, with shares opening at 95.50 rand, giving the company a market capitalization of 42 billion rand ($3.03 billion). The company shares soared to 16 percent, following a spin off by technology giant Naspers, thus launching the company straight into the top-40 firms on Johannesburg’s bourse.

The decision of the South African e-commerce giant Naspers to spin off MultiChoice came after being under pressure in recent years to find means to narrow a valuation discount between its market value and that of its one-third stake in Chinese internet group Tencent

Naspers did not raise any money from the listing with the 439 million shares instead being distributed to current Naspers shareholders on a one-for-one basis for its listed shares and one for five unlisted A class shares

With 30 years of operations, MultiChoice has reached about 14 million households in 50 African countries, with both paid-TV products and a fledging streaming service called Showmax.  Despite being a market leader, 25 million households across the continent is still yet to be captured by its traditional pay-TV business.

MultiChoice is facing challenges from cheaper online alternatives — including Netflix — which have sprung up alongside rising African household incomes and faster Internet speeds. In response to competition, the company is pushing its own video-on-demand service, Showmax, and a mobile app for the TV footage. While DStv subscribers in Africa have increased in recent years, its Premium package has lost subscribers due to high prices and competition from Netflix. The pay-TV operator has lost more than 140,000 premium subscribers in recent times.

A securities filing report recently revealed that MultiChoice has 13.9 million subscribers in a continent of about 1. 2 billion people. In Nigeria, for instance, Netflix came in recently, already has about 1 million subscribers, while Multichoice despite its long years of operations has only 3 million subscribers.

Netflix is employing the unconstrained capacity and decreasing cost of internet technology to reach customers, which potents a big scalable advantage to enhance its rapid growth.  They do not pay income tax. That gives them a nice advantage to capture the audience. Netflix also does not employ locals – an unfair advantage.

It is hoped that this spin-off, will buffer MultiChoice,  whose strong cash flow helped Naspers evolve into one world’s biggest players in e-commerce, to fend for itself in an increasingly competitive global market where Netflix is already supplying viewers with high quality TV content and Hollywood hits at low price.



About Olumide Durotoluwa 49 Articles
Olumide writes regularly on Greenergie, with interests in clean tech, business modelling, and analytics. Contact him directly via

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