The West African Regional Director of CUTS International, Appiah Kusi Adomako, has thrown his support behind Communications Minister Samuel Nartey George\u2019s directive to MultiChoice Ghana to reduce its subscription prices by 30% or face possible regulatory sanctions.<\/p>\n
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.<\/p>\n
Speaking on The Point of View with Bernard Avle on Monday, August 4, Mr. Adomako said MultiChoice should have reduced its subscription fees in response to the cedi\u2019s appreciation against the dollar.<\/p>\n
\u201cThe cedi has significantly appreciated against the dollar. MultiChoice is supposed to adjust its prices downwards without any ministerial interventions organically,\u201d he said.<\/p>\n
While acknowledging the principles of a free market, Adomako argued that market failures justify limited government intervention.<\/p>\n
\u201cOf course, it\u2019s 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.<\/p>\n
\u201cGovernment intervention by asking MultiChoice to reduce prices is not out of place. I agree with the minister because there\u2019s no way anybody can compete with MultiChoice,\u201d he stated.<\/p>\n
He noted that MultiChoice currently faces no significant competition in Ghana\u2019s pay-TV market and is therefore enjoying \u201cmonopoly rent and monopoly profits.\u201d<\/p>\n
\u201cNow, MultiChoice is earning what is called monopoly rent, monopoly profits. If there were to be a competitor in the market, I\u2019m sure MultiChoice will not be able to sustain subscriptions at the level at which they are charging,\u201d Mr. Adomako stressed.<\/p>\n
The standoff between the government and MultiChoice Ghana continues as the August 7 deadline approaches.<\/p>\n
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