Multichoice

We operate in a highly regulated industry where changes in regulatory policy and legislative frameworks can have a significant impact on our business and operating model.

Mitigation

• Our focus remains on full compliance with existing regulations.
• We continue engaging with regulators and industry bodies proactively.
• We conduct ongoing regulatory reviews and maintain contact with regulatory authorities and public industry bodies.
• Our dedicated, experienced teams (internal and external experts) assist with regulatory engagements, responses to inquiries and other projects/submissions.
• We promote active engagement with management, government and regulatory authorities about the impact on the industry of proposed regulations.

Macroeconomic challenges, such as currency depreciation and volatility, the commodity slowdown, electricity shortages (and more recently the impact of the COVID-19 pandemic) place pressure on the economies of the countries in which we operate.

Consumers are affected by the consequent pressure on disposable income, which potentially affects our addressable market, and growth and retention prospects.

Mitigation

• We understand the pressure our customers face and remain focused on customer-centricity and affordability.
• We continue focusing on reducing costs and improving efficiencies.
• We offer customers various options suited to their circumstances, supporting value for money with the flexibility to adjust to their own unique and changing circumstances.

The landscape remains increasingly competitive with strong global and local competitors, and new entrants. Consumers have credible alternatives from multiple sources in terms of video entertainment. Furthermore, there is aggressive competition for content rights when contracts are up for renewal and content providers may choose to go directly to consumer, withdrawing rights from us.

Mitigation

• We understand entertainment and technology are evolving as are consumption habits. As such, we continuously invest in product and service innovations, focusing on better products, value and customer service.
• Retaining attractive content rights is a priority, as is investing in our partnerships to maximise mutual benefits.
• We continue exploring opportunities for partnerships with telcos and other platforms.

The security of our information assets, including content, customer and employee information, is critical, and failure to protect these assets poses a legal and reputational risk.

Mitigation

• Ongoing investment in systems and technology to identify vulnerabilities and prioritise the remediation thereof to enhance systems security and reduce business interruptions.
• We employ a chief information security officer and chief data officer to ensure appropriate management attention to this critical risk.
• Controls over information assets are continuously tested, focusing on the content value chain and protection of customer and employee information.
• International studios undertake security assessments from time to time in support of their agreements with us.
• An international certification outlining how we protect our content is in the process of being completed.

Access to quality content at the right price is a major business consideration. Content rights, both general entertainment and sport, are highly sought after. Furthermore, currency fluctuations and renewals can lead to increased costs.

Mitigation

• Rights are reviewed regularly with due consideration for the economic value of each set of rights and bids are tabled accordingly.
• We bid for and secure sporting rights for three to five-year periods according to rights cycles as determined by sport rights owners.
• We continue to increase our investment in local content.
• We invest in and maintain our partnerships with rights owners to maximise mutual benefits.
• We offer customers various options suited to their circumstances, supporting value for money with the flexibility to adjust to their own unique and changing circumstances.

Technology is integral to our strategy and operations. For example, the availability and stability of the billing system is critical to the achievement of strategic objectives. In addition, the stability and scalability of the DStv Now platform is imperative to drive OTT initiatives.

Mitigation

• We invest in improving our existing systems and monitoring, innovating and collaborating to offer increased value to customers, which are all a key part of our business plan.
• Our IT controls framework was developed and is being implemented throughout the group and robustness is reviewed regularly.
• Significant improvements to simplify billing and business rules were implemented during the year, and we have standardised our billing system across all African markets.
• Rigorous testing programmes are implemented for all software rollouts.
• Redundancy in key equipment and platforms was built at the disaster recovery site at our Samrand and Isando operational facilities.
• We have expanded our MultiChoice Africa European technical facility and redundancy by adding a secondary business continuity technical site.

We work with many third parties and weaknesses and inadequacies in their own management could potentially expose our business to a wide range of risks, such as reputational, information security, legal compliance, business interruption and other operational risks.

Mitigation

• Significant progress is being made regarding the management of third parties. A detailed third-party risk management (TPRM) framework was approved in FY20 and is being implemented.
• All third parties we do business with will be subject to this risk management framework, which will result in a firm foundation for their effective management.
• Annual ongoing monitoring of all third parties with which we do business is a key part of the TPRM framework.

The group must be able to anticipate, prepare for, respond to and recover an appropriate level of service in the event of an interruption. This includes technology failures in broadcasting/digital playout, customer service, billing/payment systems and payroll. The business continuity management programme is focused on people, processes, systems and information.

Mitigation

• Business continuity management is well established in the group and is improved continuously. All operational and functional areas in the group have documented business continuity plans, which have been tested.
• The business continuity management programme is well governed with regular reporting to the board and subcommittees.

The illegal retransmission and piracy of content, including file sharing, illegal internet streaming of sporting content and the piracy of local content remain a key risk to the business.

Mitigation

• We continually invest in our leading platform and application security division, Irdeto, which offers cybersecurity and anti-piracy in media and gaming.
• During the year, illegal entertainment services to 0.9m households were disconnected.

To move into the next generation of media services, we require talent and competence to operate in a data-driven world of big data, machine learning and AI, which struggle with skills shortages globally.

Mitigation

• We identify the scarce skills and competencies required.
• Focused recruitment of scarce skills remains a priority.
• This is supported by programmes designed to develop a pipeline of talent.
• We partner with vendors for skills transfer and programmes.