(Photo: Multichoiece / Photo: Waldo Swiegers / Bloomberg via Getty Images) 
As the country celebrated the incredible scenes of the Proteas finally lifting an ICC trophy, I couldn’t help but think about the platform that I was watching the game on: SuperSport, of course, being the MultiChoice product that is surely their prized asset.
With the game happening in the same week as MultiChoice releasing a really horrible set of numbers, the irony of the situation wasn’t lost on me. We are a sport-mad country, yet MultiChoice’s current investment strategy seems to revolve around trying to compete with Netflix instead.
Evolution is a painful thing, with MultiChoice needing to take steps to futureproof the business and avoid technological obsolescence. In the past week, the local poster child for this type of journey also released results: Telkom. Perhaps the core difference here is that Telkom picked manageable areas to focus on, where they had a decent chance of unlocking a sustainable competitive position. Over at MultiChoice, they’ve chosen the capex black hole of streaming, where we know from the likes of Netflix and Disney just how long it takes to turn from red to green.
With the MultiChoice share price artificially high because of the Canal+ offer, we can’t make a direct share price performance comparison. But with Telkom up 79% in the past 12 months and MultiChoice registering heavy losses, it’s not hard to identify the current winner.
Will Canal+ see success like this in years to come with MultiChoice? To get there, they will certainly need deep pockets.
MultiChoice: trying to be Africa’s Netflix
At least 1.2 million - this is how many paying customers MultiChoice managed to lose in the year ended March 2025. There was an even split across South Africa and the rest of Africa, with the easy excuse being that streaming is the future and traditional TV networks are in huge trouble. Whilst there is some truth to this, it also incorrectly absolves MultiChoice of any of the blame here.
One of the big issues MultiChoice faces at the moment is that a DStv Premium package costs far more than Netflix. In fact, you can have a few streaming options in your household and still pay less than you’ll part with each month for DStv Premium. This was manageable in a time when not every household had fibre internet, as the cost of sufficiently fast internet plus the streaming platforms would make DStv a lot more competitive in relative terms. But these days, with households focusing on fibre rather than satellites anyway (when did you last see a satellite dish on a modern home?), the saving when you choose streaming over DStv is significant. Only the most die-hard sports enthusiasts with space in their budgets can justify the full package.
In this competitive environment, you would think that MultiChoice would be focused on bringing the cost of the offering down. After all, when you’re shedding volumes (in this case subscribers), wouldn’t it be sensible to be more aggressive on price to win back customers and improve the overall economics? Instead, MultiChoice notes that they increased prices in South Africa by 5.7% and in the rest of Africa by 31%. Shocking as it might be in the case of the latter percentage, these are inflationary increases. But when your customer base is sending a clear message by cancelling their subscriptions, then inflation isn’t going to cut it.
For whatever reason, MultiChoice has decided that Showmax is the hill that they will die on. Instead of building out a world-class way to deliver the best of DStv (including sport) to households with fibre, they are trying to take the fight to the likes of Netflix by building a distinct offering. Regional content will help them compete here, but does it really make sense to throw everything at Showmax, particularly at a time when the core business is struggling?
The Canal+ deal has been on the table for a while now. Each time MultiChoice releases numbers, they seem to be getting worse. Canal+ certainly can’t claim that they are going in with anything other than eyes wide open. Whatever their plan is, I hope they have deep pockets to support a strategy of trying to become Africa’s Netflix rather than focusing on areas where there’s an obvious competitive advantage.
Telkom: from legacy to legit
Telkom’s results for the year ended March demonstrate why the market is loving this story. There has been so much focus on competing in the right areas and unlocking margins, evidenced by adjusted Ebitda growth of 25.1% despite revenue being just 3.3% higher. With profits through the roof, the balance sheet is also in much healthier shape. This is supportive of dividends, which only gives further support to the share price. It’s a lovely cycle to be on the right side of.
The reason for Telkom’s success is that they’ve reached a point where the growth areas of the business are outpacing the decline in the legacy business. They’ve pushed in segments where they know they can do well, such as Telkom Mobile which has achieved 10 quarters of market-leading service revenue growth. Another important area is Openserve, where fibre-related services now contribute 82% of revenue.
As the overall revenue mix changes, the impact on margins is clear to see. Top-line revenue growth doesn’t mean much unless profits are heading in the right direction, hence why the market is enjoying the mix story at the moment rather than punishing Telkom for a revenue growth story that is still below inflation.
It took a number of decisive strategies for Telkom to finally reach this point. But it doesn’t feel like they bet the farm along the way, or tried to step into an area where they are up against the strongest international competitors. This is the difference to MultiChoice and it may well be the deciding factor in whether MultiChoice’s evolutionary story ends in success like Telkom or in a costly failure for Canal+ - assuming that deal goes ahead, of course. DM