Canal+ increases stake in MultiChoice

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April 22, 2024
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7 min read
Canal+
(Image source: Bloomberg)

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Bonjour,

Victoria from Techpoint here,

Here's what I've got for you today:

  • Canal+ increases stake in MultiChoice
  • Nigeria criminalises fibre cable destruction 
  • Netflix reports $2.3 billion profit in Q1 2024 
  • Nigerian court adjourns Binance tax evasion trial

Canal+ increases stake in MultiChoice

Canal+
(Image source: Bloomberg)

Canal+ has increased its stake in MultiChoice, a South African broadcaster, since February, when its ownership surpassed 35%. 

Now, with a stake of 40.8%, it's aiming to take over even more. Last week, between April 12 and 15, Canal+ snagged 3.5 million MultiChoice shares at a lower price than its mandatory offer.

Despite regulatory hurdles, Canal+ seems determined to make the acquisition happen. South African law mandates a mandatory offer for all outstanding shares once a stake exceeds 35%. However, foreign entities are limited to 20% of voting rights in acquired broadcasting companies.

This hasn't deterred Canal+, which is strategically buying up shares at a discount, potentially saving a significant amount of money. Until the deal is finalised, MultiChoice shares remain fair game on the open market. 

According to South African law, Canal+ can keep buying shares as long as it’s below the mandatory offer price of R125. The fact that MultiChoice shares are still trading below the offer price suggests that the market isn't overly optimistic about the deal going through.


Nigeria criminalises fibre cable destruction

internet fibre cable

The Nigerian government is getting serious about protecting broadband fibre cables after MTN and Airtel reported massive losses of ₦27 billion. 

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The government is planning to make it a crime to destroy these cables and are working on new regulations to safeguard the country's telecom infrastructure.

The move comes after MTN Nigeria suffered a major service outage in February 2024, leaving millions without phone or Internet access. This outage was caused by a cut fibre optic cable, likely due to road construction or vandalism. 

It's been a recurring problem, with MTN alone experiencing over 6,000 cable cuts last year. Airtel has also faced similar issues, with over 1,000 fibre cuts between July 2019 and February 2020. 

Telecom assets are crucial for Nigeria's economy, according to Temitope Ajayi, a Senior Aide to the President. He says the new rules will protect investments against vandals and criminals.

Tony Izuagbe Emoekpere, head of the Association of Telecommunications Companies of Nigeria, believes the regulations will boost the sector and attract more investment. Vandalism of communication infrastructure has been a widespread problem, with over 50,000 cases recorded in five years, according to the National Communication Commission.

Prof. Umar Danbatta from the Nigerian Communications Commission stressed that infrastructure vandalism leads to a decline in service quality. With the telecom market expected to grow, protecting these assets is more important than ever.


Netflix reports $2.3 billion profit in Q1 2024 

Netflix
Photo by Mollie Sivaram on Unsplash Netflix

Last week, Netflix reported a whopping profit of over $2.3 billion for the first quarter of 2024. 

In a letter to shareholders, it revealed a growth of 14.8% compared to the previous year. Plus, it gained a whopping 9.3 million new subscribers, bringing its total to nearly 270 million!

But despite these impressive numbers, its shares on the NASDAQ took a hit, dropping 5% after the announcement. 

Some investors are worried because Netflix plans to stop reporting subscriber numbers next year. This move raised concerns about its future growth, similar to what happened with other tech giants like Meta and X (formerly Twitter) when they stopped reporting user numbers as growth slowed.

Netflix attributed its recent subscriber growth to cracking down on password sharing, which started in February 2023. It introduced measures to discourage sharing passwords and predicted that this would boost its  revenue and growth. And it worked!

 In Q2 2023 alone, it saw a 2.7% increase in revenue, reaching $8.2 billion, and gained 5.9 million new users.

Looking ahead, Netflix is projecting 14.8% revenue growth for the second quarter of 2024, aiming for revenue of $9.5 billion. It plans to achieve this by offering more top-notch TV shows and movies, expanding into gaming, and enhancing their product and marketing strategies to keep fans engaged. 

Additionally, it aims to explore new revenue streams, like scaling up ads, in the coming years.


Nigerian court adjourns Binance tax evasion trial

Binance logo on a phone
Photo by Vadim Artyukhin on Unsplash

A Nigerian court has pushed back a trial against Binance and its top dogs until May 17 because the exchange hasn't officially received the tax evasion charges. 

Binance, along with Tigran Gambaryan and Nadeem Anjarwalla, is facing four counts of tax evasion, including failing to register with Nigeria's tax authority. 

Gambaryan showed up in court, but Anjarwalla bolted from the country last month.

The lawyers had a back-and-forth: Nigeria's Federal Inland Revenue Service (FIRS) argued that Gambaryan should face the music on behalf of Binance, but Gambaryan's lawyer objected, saying he couldn't plead until Binance got served first. The judge hit pause and will give a verdict on May 17.

Meanwhile, Binance and the execs are also in hot water for allegedly laundering over $35 million, and that trial resumes on May 2. 

Meanwhile, Binance didn't show up in court, but it claims it’s working closely with Nigerian authorities since Gambaryan got nabbed.


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Have a productive week!

Victoria Fakiya for Techpoint Africa.

She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.

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