Tanzania Limited is a resident company established in August, 1997 and registered
with BRELA, with MultiChoice Africa Limited
having majority shareholding of 60% and the rest 40% owned by local
shareholders. It is a subsidiary company belonging to the ultimate shareholding
of the multinational group of companies, the Naspers.
Company’s principal activity is the provision of pay television subscriber
management services to MultiChoice Africa Limited, which includes the operation
of call centres, cash collection, over-the-counter customer care services,
promotion of DStv (Digital Satellite
Television) products and bouquets/packages options, sale of digital decoders
and associated components. The
package options are DStv Premium, DStv Compact+, DStv Compact, DStv Family and
Tanzania has its headquarter office in Dar es Salaam and the main centres in
Arusha, Mwanza, Mbeya, Dodoma, Additionally, it has agents in Zanzibar, Moshi, Iringa,Sumbawanga,
and Morogoro. It also use distribution network of mega dealers and sub-dealers
across the country and it capitalizes on mobile network operators (MNOs) to
reach its customers countrywide. It is with these networks of offices and
distribution channels which have enabled the company to rapidly expand its
subscriber base, making its service available across the country as it
constantly strive to reach an even greater audience.
analysis is a strategic plan used to understand any organization potential,
position or area of improvement where by it can take a direction towards being
competitive in a given market.
analyzing the market, company has to study the dynamic environment in which it
contemporary peace and political stability makes it an ideal place in which MultiChoice
Tanzania introduces a broad range of premium products, international and
African programming through DStv, whilst catering for all income levels through
its range of DStv banquets tailored to suite different income earners, however Tanzania’s
tax policies are unfavorable for business growth due to high rate which affect
the disposable income of final consumer which reduce their purchasing power and
frequencies. Example, Tanzania has VAT rate of 18% compared to 16% of Kenya.
company has established MultiChoice Resource Centres (MRCs) in twenty schools
in the country as a social responsibility initiative. The MRCs have been rolled
out in partnership with the Ministry of Education. The MRCs play an important
role in providing access to information to schools, in particular rural
schools, thereby helping to bridge the digital divide between schools with
access to information and those without. The company is proud that today
Tanzanians have access to the same world-class technology and sophisticated
content that their contemporaries in Europe and the Americas enjoy.
packagers are age and gender inclusive and the Government effort to distribute electricity to the rural areas
through(REA) program is positively impacting DStv’s expansion to the rural
areas. This is helping the company to strengthen its relationships with its
customers. All these have helped MultiChoice Tanzania to achieve the
exceptional growth levels over the past twenty years which it still enjoy currently.
Tanzanian economy has been growing at 7% for the last two decades. Same pace is
expected in the coming years. Key economic sectors being construction,
communication, finance and transportation (Source: IMF) and current emphasis is
on industrialization. With the recent gas exploration and invention in the
southern Tanzania it is expected to see improved infrastructures and enhanced the
company’s operating environment.
Average inflation is around 5% – 6%. This will hold provided the price of
commodities especially remain low.(Source: IMF) Inflation has been detrimental
to many corporates as it erodes purchasing power of consumers.
Expected to be stable with depreciation of not more than 1.5% estimated in the
next 18 month.(Source: IMF) Given volatility of local currency, movement in
exchange rate has been unfavorable to corporates including MultiChoice Tanzania
as it reduces profitability through loss on foreign exchange.
operations needs technology in onder to run smoothly, however the government’s Switch from analog to digital era
on 31st Dec 2012 becoming the
first country from the sub-Saharan Africa, has positively impacted the
operations and distributions of DStv’s products throughout the country.
addition the emerging of unrelated sectors like Mobile Network Operators (MNO)
i.e mobile payment, mobile banking has facilitated the purchasing of DStv products
easily and fast. Also due to high technology needed to run a pay TV it
restricts many market players to offer this service thus, makes only a few
players left to stay in the game.
Industry Analysis Technique
Porter’s Industry Analysis Technique can be used to understand the five forces
acting on an organization from within its industry to determine how the
organization may be re-engineered to gain a competitive advantage. The technique examines the five
competitive forces that determine industry profitability;
The entry of new
competitors-address the potential for new entrance into their industry,
The threat of
substitutes- address the potentiality
of other products satisfying the same need into their industry.
The bargaining power of
buyers- be cautious of products from other industries that perform the same
functions as their products,
The bargaining power of
suppliers-compete with their customers’ ability to force down their prices,
The rivalry among the
existing competitors- resist
their suppliers’ efforts to drive up the cost of their supplies
MultiChoice Tanzania Ltd is leading on revenue market share holding 37% of the
total share followed by Azam (34%), Startimes (27%) and Zuku (2%). It is the
third on subscriber market share holding 12% of the market.
Competitive advantage: MultiChoice
Tanzania faces competition in the market of Star Times, Azam, Zuku and others
like cable operators. MultiChoice Tanzania has decided to differentiate its
products by offering rich, high quality and current content at affordable
prices, high quality technology (DTH) and high quality decoders. For this
matter MultiChoice is perceived as superior, since it has chosen to differentiate
Exclusive right to
broadcast English Premier League (EPL): Most
viewers are soccer fans and EPL is the most popular soccer league in the world,
Multichoice having an exclusive right to EPL, attracts large number of
subscribers in pay TV market.
DSTV packages are
perceived to be expensive; compared to other
brands DSTV packagers seems to be more e
strength of the competition is low pricing, cheap technology such as DTT, Local
premium league, local content For this matter MultiChoice is perceived
company is committed to hold onto its revenue market share, and grow its active
subscriber base to attain number two position on subscriber market share in the
forthcoming financial year. The plan is
to achieve this by effective retention of the top tier subscribers(Premium,
Compact+), and aggressively growing middle and lower tier subscribers(Compact,
Bomba) through its value strategy II proposition which entails package price
reduction and thus presenting affordability, more content and quality to these
the lower end subscriber segment new local content presented by Maisha Magic
Bongo, La Liga and SS4 availability to its Bomba (Access) bouquet will be the
game changer on acquisition and winning subscribers from competitors. This
value proposition to its customers combined with effective promotion,
streamlined sales and distribution, together with renewed anti – piracy drive
will make its growth ambitions a reality in the next three years
Local content will gradually continue to be the drivers of numbers specifically
on the bottom of the segment.
Subscriber profile for growth will be middle and low income.
Sales and Distribution:
Channels need to be streamlined and expanded to cater for mass market.
Continuous cost management to improve profitability.
subscribers: Retain our Premium, and Compact
Win – Over and new
acquisitions: Win over Azam subscribers to its
Bomba, and Family bouquet, which are cheaper through aggressive promotion
Response to new
entrants and existing competition: Kwese expected
to be in Tanzania in January 2017 with focus on low pricing, streaming
technology, and Basketball. To respond to this the company will promotion of its DStv now product
to disrupt Kwese, and see possibility of open up DStv now up to Bomba. Azam
will continue to drive news and local sports as its crown jewel contents. MultiChoice
will capitalize in new local content on Maisha Magic Bongo (MMB). As piracy
will continue to be rampant, MultiChoice will continue aggressive
anti – piracy campaign, involving the regulators-COSOTA.