Internet Access Service - 3rd quarter 2008

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This information is copyrighted to ANACOM

Note: The present report was drawn up based on the information available on 3.11.2008. One of the operators had not, at that time, sent information in respect of 3Q08. In this case the information referring to 2Q08 was used. According to the information available, the evolution in the number of that operator's customers would not have a significant impact on the Internet penetration rate reported in this report.

Evolution in the number of providers authorised to provide Internet Access Services

As at the end of the 3rd quarter of 2008 (3Q08) there were 49 companies in Portugal authorised to provide fixed internet access services¹, 35 of these were in operation² (Table 1).

Table 1 - Evolution of Fixed Internet Access Service Providers (See full version report in PDF)

Among the providers of fixed Internet access services in operation, 31 offered broadband Internet access services: ADSL is provided by 20 companies, while cable modem is provided by 8 companies. There are a further 19 companies providing the service through other means (e.g. leased lines, FWA). As can be gathered from reading this text, there are a number of companies which provide the service using more than one access technology.

At the same time, 3 of the operators of the mobile telephone service provide the mobile broadband Internet access service using UMTS.

Number of customers of Internet access service

As at the end of 3Q08, there were around 2.1³ million users with mobile broadband Internet access and around 1.64 million fixed internet accesses, of which approximately 1.6 million were broadband.

Mobile broadband saw a high rate of growth during the period being reported. The number of users increased by 185 thousand in 3Q08, representing a rise of almost 10 per cent compared to the previous quarter. The values recorded at the end of 3Q08 represent a rate of growth of around 77 per cent over 3Q07.

Table 2 - Evolution in mobile internet access customers (See full version report in PDF)

Along with the high rate of growth seen in the number of mobile broadband accesses, their use has also grown. The number of mobile broadband users who were active during the period being reported grew by around 15 per cent over the quarter, rising to 1.015 million users⁴, a figure that is 112 per cent higher than the value recorded in the third quarter of 2007.

Table 3 - Evolution in the number of active mobile internet access customers during the quarter being reported (See full version report in PDF)

If we consider the Internet access traffic of mobile accesses as an indicator of the intensity of use, growth is even higher, with the volume of traffic (in MB) in 3Q08 up 12 per cent over the previous quarter.

Meanwhile, the number of fixed internet access service customers (Table 4), (around 1.64 million) grew in 3Q08 by around 1.2 per cent compared to the previous quarter⁵, but fell by 1.2 per cent year-on-year.

The number of dial-up access customers continued to decline, as a result of the migration of users to broadband. In this quarter the number of dial-up customers stood at 45 thousand, around 11 thousand less than in the previous quarter. Since 3Q07, dial-up accesses have fallen by around 56.9 per cent.

The majority of Internet access service customers use broadband: the customers of these services represent around 97 per cent of all customers. The number of customers of broadband services reached 1.6 million, 31 thousand more than in the previous quarter. The number of fixed broadband customers rose, therefore, by 2 per cent in comparison to the previous quarter and by 2.6 per cent compared to the same quarter of 2007.

Table 4 - Evolution in the total number of fixed Internet access customer (See full version report in PDF)

ADSL remains the principle broadband Internet access technology, now representing 58.1 per cent of the total, 3.8pp below the peak of 4Q06. Cable modem is used by 40.4 per cent of fixed broadband customers.

Table 5 - Evolution in the total number of broadband customers (fixed access) (See full version report in PDF)

The ''others'' category, which includes, for example, offers based on leased lines and on FWA, and which represents just 1.5 per cent of the total number of customers, has seen sharp growth, due to bundled offers based on alternative networks.

Graph 1 - Evolution in the number of broadband customers

(Click here to see the full-size image)

It should be noted that the number of fixed broadband customers who were active during the period being reported totalled around 1.6 million, representing 98.4 per cent of all fixed broadband customers.

As far as market share of fixed broadband access is concerned, and as can be seen in the following table (Table 6), Grupo PT's⁶  share of customers stood at 40.7 per cent, 1 per cent up on the previous quarter, increasing in part due to the MEO service of PT Comunicações.

Finally it should be noted that ZON Multimédia recently announced the acquisition of the companies of Grupo Parfiltel (Bragatel, Pluricanal Leiria and Pluricanal Santarém), as well as TV Tel. These operations remain subject to the opinion of Autoridade da Concorrência (the Competition Authority).

Table 6 - Evolution in broadband customer shares (fixed access) (See full version report in PDF)^7,8,9

According to available data, it can be seen that, during the quarter being reported, around 89 per cent of new fixed broadband customers signed up to the services operated by Grupo PT, in particular as a result of the expansion associated with the MEO service of PT Comunicações.

Graph 2 - Evolution of marginal shares of fixed broadband Internet access customers

(Click here to see the full-size image)

Broadband penetration rate in Portugal¹⁰

At the end of 3Q08, the penetration rate of broadband Internet access stood at 15.1 per 100 inhabitants for fixed access and at 19.8 per 100 inhabitants for mobile access (Table 7).

In the case of fixed access, this figure increased 0.3 percentage points over the previous quarter being around 0.4 per cent higher than the figure recorded for the third quarter of 2007. The penetration rate for ADSL customers increased 0.2 percentage points, to stand at 8.8 per 100 inhabitants. Meanwhile the penetration rates recorded for cable Modem customers and customers of other types of access have been rising progressively over time. The penetration rate for mobile broadband grew by 1.7 per cent over the quarter.

Table 7 - Evolution of broadband penetration rates (See full version report in PDF)

Although as far as both fixed and mobile broadband are concerned, the number of available accesses is considered, in the case of mobile broadband there is greater heterogeneity of access types, determined by the terminal equipment used (mobile telephones, PDAs, portable cards, USB connection cards) which are associated with patterns of internet use. This fact calls for additional information to be compiled, in order to allow a better understanding of this heterogeneity¹¹.

According to information provided by the OECD, the penetration rate¹² of the fixed Internet access service in Portugal was, in the considered period, below the average of the EU15. In June 2008, broadband penetration in the EU15 was 24.4 per 100 inhabitants, while the figure recorded for Portugal was 14.8.

However, these comparisons do not reflect the growth and significant weight of mobile broadband in Portugal, and probably other European countries. Currently there is a lack of widespread and comparable information on the penetration of mobile broadband in other EU countries, although some international bodies, including the European Commission, have already given notice of their intention to start compiling this type of information.

ICP-ANACOM was one of the first European regulators to start compiling and publishing information on mobile broadband accesses (since January 2007) and has made every effort to promote international comparisons that include this information.

Currently the entirety of information available is given in Graph 3, which identifies fixed and mobile accesses. As further information becomes available, this Graph will be updated in forthcoming editions of this report to reflect this information.

Graph 3 - Information on broadband penetration in the EU (2Q08)

(Click here to see the full-size image)

The importance of including mobile accesses in international comparisons, despite the shortcomings with regard to the comparability of the information compiled, is evident in the fact that by including this type of access Portugal moves ahead of Spain, Ireland and Austria in the rankings (countries whose regulators have provided data on mobile accesses).

¹ Also known as Internet Service Providers (ISP).
² Companies which, according to available statistical information, have registered activity during the reported period.
³ Customers of mobile operators who can access the Internet using mobile broadband, and who have done so at least once since the launch of the service.
⁴ Customers of mobile operators who can access the Internet using mobile broadband, and who did so at least once during the quarter being reported.
⁵ Changes were made to firgue given in the last report for number of customers in 1st and 2nd quarter 2008 due to corrections made by determined operators.
⁶ During 4Q07 TV Cabo was part of a Spin-off which was concluded by the companies concerned in November. By determination of 3 April 2008, this Authority considered that, following this operation, PT Multimédia, now ZON Multimédia, would no longer be included in Grupo PT. On 10 March 2008, there was a merger, with the incorporation of PT.COM into PT Comunicações, S.A..
⁷ On 10 March 2008, there was a merger, with the incorporation of PT.COM into PT Comunicações, S.A, whereby the figure in respect of 1Q08 are included in the figures of PT Comunicações.
⁸ During 4Q07 TV Cabo was part of a Spin-off which was concluded by the companies concerned in November. By determination of 3 April 2008, this Authority considered that, following this operation, PT Multimédia, now ZON Multimédia, would no longer be included in Grupo PT, whereby the obligations arising from the analysis of the market conducted under Title IV of Chapter II of the Law of Electronic Communications (LCE) and which fall on that Group are not applicable to it.
⁹ The previously presented figures given for AR Telecom were overstated up to 1Q08 and have now been corrected by ICP-ANACOM.
¹⁰ Means of calculation: (Total number of customers) / (Total population). Includes residential and non-residential customers.
¹¹ ICP-ANACOM will make this information available as soon as possible.
¹² Means of calculation: (Total number of broadband customers) / (Total population). Excludes mobile accesses.