The rapid fall and weakening of the rand over the past year and especially the past two months, will have a tremendous effect on MultiChoice and DStv. They expressed fear that these changes in exchange rates may cause their prices to go up because they purchase most of their international programming in foreign currency.
“We purchase most of our international programming in foreign currency – exchange rates therefore have a big impact on our business,” the company told MyBroadband”.
The year 2015 saw the rand losing over 30% of its value against the US Dollar – with 13% of that value lost in the last two months.
The rand’s decline took a nosedive in December when President Jacob Zuma decided to remove renowned finance minister Nhlanhla Nene and replaced him with unknown David van Rooyen.
By December last year, the rand had broken through R15 per dollar. On 7 January 2016, it went through R16 per dollar, and on 11 January it collapsed to its lowest level ever – R17.99 per dollar.
Since then, the exchange rate for the rand has been moving at between R16-R17 per dollar, briefly going below R16 on 1 February.
This drama on exchange rates could spell bad news for DStv subscribers unless our local currency strengthens dramatically.
The company spent R12 billion on content during its April – March 2015/16 financial year, and another R5.8 billion between April and September 2015.
With the current inflation expected to be around 7% and rand weakening and devaluing by more than 30% in the past year, keeping DStv’s 2016 services price-increase in check will not be an easy task.
“While we continue to ensure that we minimize the impact on our customers, we are constantly reviewing the situation,” said MultiChoice.
DStv’s new prices will be announced at the end of February, and will come into effect on 1st April.