Nine questions - Nolo Letele
How much autonomy does MultiChoice have to make decisions within the Naspers Group?
We live or die by our decisions. We are the ones who are close to the business and we know what the risks and challenges are. Our instincts are attuned to the industry; therefore we have huge latitude for decision making. However at a strategic level we interact with the group higher up .
In SA, DStv has added 450 000 new subscribers to 2,83m subscribers since September 2009 (similar growth to the previous year). Will this growth rate decline now that TopTV is in the market? (See Features page 56.)
I don’t see our growth slowing down. The market among lower-income households is huge relative to the current base. We are only tapping into that market now ... we will continue to grow at the same rate or better.
What will DStv do to mitigate possible declines in lower average revenue per user (Arpu), considering the move into the lower-income households ?
I think the logic is that lower- income households will go for lower-priced bouquets and that Arpu is threatened in that way, but this will be offset by volumes. We will also introduce new offerings such as video on demand, which we hope will increase Arpu in higher- income households .
What kind of focus will we now see on the rest of Africa?
My area of responsibility is SA, and I’m not competent to give you those views.
What challenges do you see in SA?
I don’t think of competition as a challenge, but the biggest challenges are the steps one needs to take to remain competitive and continue to grow.
A big threat is the increase in people going online to view programmes . There is an increase in free content in the form of peer-to-peer sites.
In response we have established a business that is focused online and launched what we call catch-up TV and video on demand.
Our next-generation decoder will have a return path to allow you to view content online and surf the Web. This is a space we are focusing on. If we don’t, somebody will eat our lunch.
One would expect prices to fall in the face of competition, but some DStv services have actually raised prices. What can consumers expect in future?
Every year in April 1 , we levy increases which are below inflation. With the introduction of new bouquets we now provide lower prices which offer something that everyone can afford. As a business you have to take into account inflationary costs.
MultiChoice has traditionally been Naspers’ core operation. With the entry of new competition, where do you see MultiChoice fitting into Naspers over the long term?
The Internet companies will one day overtake pay TV, especially if you look at Tencent in China. In a sense we are also taking our content online; future battles will be fought online. For Africa, though, satellite-delivered content will be around for a long time, at least for the next 15 years.
How will your function in the group change as you take up your new role as group chairman in October?
I will no longer be involved in the day-to-day operations of the company. My replacement, Imtiaz Patel, will be focused on that. But since my new appointment is a full-time undertaking, it means I’ll be more proactive in stakeholder relations, reputation management and empowerment.
How many years do you think you have left in you?
I’ve completed 20 years in the group, one of those as CEO. I’m having too much fun to slow down. I think five more years is a good period.Financial mail 9 questions