The West African Regional Director of CUTS International, Appiah Kusi Adomako, has thrown his support behind Communications Minister Samuel Nartey George’s directive to MultiChoice Ghana to reduce its subscription prices by 30% or face possible regulatory sanctions.
The Minister recently issued an ultimatum to the pay-TV operator, warning that its broadcasting licence could be suspended if it fails to comply with the price adjustment by August 7. He accused MultiChoice Ghana, operators of DSTV, of charging unfair and exorbitant fees despite improvements in the exchange rate.
Mr. Adomako said MultiChoice should have reduced its subscription fees in response to the cedi’s appreciation against the dollar.
“The cedi has significantly appreciated against the dollar. MultiChoice is supposed to adjust its prices downwards without any ministerial interventions organically,” he said.
While acknowledging the principles of a free market, Adomako argued that market failures justify limited government intervention.
“Of course, it’s a free market, and as an economist, I believe in a free market. However, when the free market is not able to lead to an optimal outcome, that is what we call market failures.
“Government intervention by asking MultiChoice to reduce prices is not out of place. I agree with the minister because there’s no way anybody can compete with MultiChoice,” he stated.
He noted that MultiChoice currently faces no significant competition in Ghana’s pay-TV market and is therefore enjoying “monopoly rent and monopoly profits.”
“Now, MultiChoice is earning what is called monopoly rent, monopoly profits. If there were to be a competitor in the market, I’m sure MultiChoice will not be able to sustain subscriptions at the level at which they are charging,” Mr. Adomako stressed.
The standoff between the government and MultiChoice Ghana continues as the August 7 deadline approaches.
