Internet Access Service - 4th quarter 2008

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This information is copyrighted to ANACOM

Note: One of the operators had not, as of publication, sent information in respect of 3Q08 and 4Q08. The values published in this report may therefore be subject to future correction.

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

As at the end of the 4th quarter of 2008 (4Q08) there were 53 companies in Portugal authorised to provide fixed internet access services¹, 36 of these were in operation² (Table 1).

Source: ICP-ANACOM

Among the providers of fixed Internet access services in operation, 34 offered broadband Internet access services: ADSL is provided by 20 companies, while cable modem is provided by 9 companies and Fibre optic by 10 companies. There are a further 17 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/ HSPA.

Number of customers of Internet access service

As at the end of 4Q08, there were around 2.4³ million users with mobile broadband Internet access and around 1.68 million fixed internet accesses, of which approximately 1.63 million were broadband.

Mobile broadband saw a high rate of growth during the period being reported. The number of users increased by 278 thousand in 4Q08, representing a rise of almost 13 per cent compared to the previous quarter. The values recorded at the end of 4Q08 represent a rate of growth of around 63 per cent over 4Q07.

Source: ICP-ANACOM

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 14 per cent over the quarter, rising to 1.16 million users⁴, a figure that is 75.9 per cent higher than the value recorded in the fourth quarter of 2007.

Source: ICP-ANACOM

The volume of mobile Internet access traffic (in MB) rose by 9 per cent in 4Q08 over the previous quarter.

Meanwhile, the number of fixed internet access service customers (Table 4), (around 1.68 million) grew by around 2.1 per cent in 4Q08 compared to the previous quarter and by 3.9 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 41 thousand, around 4.5 thousand less than in the previous quarter. Since 4Q07, dial-up accesses have fallen by around 58.7 per cent.

The majority of Internet access service customers use broadband: the customers of these services represent around 98 per cent of all customers. The number of customers of broadband services reached 1.6 million, 39 thousand more than in the previous quarter.  The number of fixed broadband customers rose, therefore, by 2.5 per cent in comparison to the previous quarter and by 8.1 per cent compared to the same quarter of 2007.

Source: ICP-ANACOM

ADSL remains the principle broadband Internet access technology, now representing 58 per cent of the total, 4pp below the peak of 4Q06. Cable modem is used by 40.5 per cent of fixed broadband customers.

Source: ICP-ANACOM

The ''others'' category, which includes, for example, offers based on leased lines, on FWA and on fibre optic, and which represents just 1.6 per cent of the total number of customers, has seen sharp growth, due in the most part to bundled offers based on alternative networks.

Graph 1 - Evolution in the number of broadband customers

(Click to enlarge 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 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's⁵ share of customers stood at 41.6 per cent, 0.8 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 were given definitive approval by Autoridade da Concorrência (the Competition Authority) on 24 November 2008.  As a result of these acquisitions and from the activities of the previously existing business units, ZON/TV Cabo's share of customers grew by 3.4 percentage points in 4Q08.

According to available data, it can be seen that, during the quarter being reported, around 77 per cent of new fixed broadband customers⁹ 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 to enlarge image)

Broadband penetration rate in Portugal¹⁰

At the end of 4Q08, the penetration rate of broadband Internet access stood at 15.4 per 100 inhabitants for fixed access and at 22.4 per 100 inhabitants for mobile access (Table 7).

In the case of fixed access, this figure increased 0.4 percentage points over the previous quarter being around 1.2 per cent higher than the figure recorded for the fourth quarter of 2007. The penetration rate for ADSL customers increased by 0.1 percentage points, to stand at 8.9 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 2.6 per cent over the quarter.

Source: ICP-ANACOM

Although as far as both fixed and mobile broadband are concerned, if the number of existing customers 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 distinct 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 to enlarge 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).

If we only consider subscribers to 3G services, upgrades and equivalent standards connected through cards/modems, which are most similar to fixed broadband, Portugal ranks in third place in terms of the penetration rate.

Graph 4 - Information on mobile broadband penetration (cards/modem) in EU (4Q08)

(Click to enlarge image)

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 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..
⁶ 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.
⁷ 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.
⁸ On 24 November 2008, Autoridade da Concorrência (the Competition Authority) notified ZON Multimédia of its decision not to oppose its acquisition of the companies of Grupo Parfitel (Bragatel, Pluricanal Leiria and Pluricanal Santarém) or its acquisition of TV Tel.
⁹ These new customers correspond to new contracts of providers in net terms and not necessarily new customers of the service (i.e these new clients may previously have been customers of other providers).
¹⁰ Means of calculation: (Total 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.