Naspers ponders selling pay-TV business in Africa

MEDIA group Naspers is considering the sale of its pay-TV business in Africa as sluggish economic expansion in markets stifles growth and viewers switch to cheaper online alternatives, say two people familiar with the matter.

A disposal of MultiChoice would not include the South African division, which was still highly profitable, said the people, who asked not to be identified as the plans had not been made public. A sale is one of a number of options being considered by Africa’s biggest company by market value, and a final decision had not been reached, oneadded.

Talks ongoing Naspers and MTN Africa’s largest wireless operator, MTN, had briefly discussed a deal for MultiChoice Africa, but no agreement had been reached, according to one of the people.

Both companies confirmed yesterday that they were still in talks that were disclosed earlier about sharing TV content.

MyBroadband, a South African internet news site, reported earlier that MTN was in talks to buy MultiChoice Africa, citing unidentified people.

A sale of MultiChoice Africa would represent a further shift by Naspers away from its traditional media business, which includes newspapers and MultiChoice’s main product, the DSTV satellite-TV service.

Since winning big with a 2001 investment in Chinese technology company Tencent Holdings, a stake that’s now worth about $107 billion (R1.4 trillion), Naspers has become a serial investor in internet companies around the world, ranging from an online travel agency in India to education software providers in Silicon Valley.

The value of the Tencent stake is worth more than Naspers’s market value of R1.2 trillion, which partly reflects the weak performance of the TV division. While the company arrested a decline in subscriber numbers over the six months through September, earnings before interest, taxes, depreciation and amortisation at the unit declined 33 percent to $331 million.

Growth sluggish, viewers on the continent changing to cheaper online alternatives

As Naspers charges customers in local currencies, “the continued weakness of currencies… in many African countries resulted in lower US dollar revenues”, it said in its November results.

Nigeria’s economy contracted for the first time in 25 years in 2016 and its currency has depreciated by 37 percent against the dollar over the past 12 months. Sub-Saharan African economies grew by an average of 1.4 percent last year, compared with 3.4 percent in 2015, the International Monetary Fund has said. – Bloomberg