Opinion of the Advisory Council of ICP-ANACOM on the tariff of the universal service 2010


I

1. On 8 February 2010, PT Comunicações, S.A. (PTC) submitted a proposal to ICP-ANACOM to amend the tariff of the Universal Service (US) for both the main tariff and the alternative tariff, to take effect from 15 February. Subsequently, on 12 February, the provider reformulated this proposal, indicating 19 February as the date on which the new tariff would take effect.

2. With respect to the main tariff, the proposal presented by PTC consists of a reduction per minute of communications during the daytime period of around 13%.

3. With respect to the alternative tariff, the proposal comprises a merger of the Local and National price categories, and represents a reduction of approximately 1% and 42%, respectively, over the price per minute of the Local and National categories.

4. By determination of 14 February, ICP ANACOM approved the obligations applicable to the companies of Grupo PT in the narrowband retail market.

5. The Management Board of ICP-ANACOM considered that PTC should present its proposals to amend the tariff of the US in due time required for the procedure set out in law, whereas it is in their interest to ensure that it enters into force on the date set forth therein, which is not the case here - although it is important to recognize the special circumstances related to the delay in the publication of the proposed State Budget.

6. ICP-ANACOM further accepts that:

i. In terms of the main tariff, the proposal presented by PTC is compatible with the applicable price-cap, representing an average annual change in the basket of -2.10%;

ii. With respect to the alternative tariff (applicable optionally at the request of customers), the variation of the prices amounts to -1.97%, which is also compatible with the applicable price-cap;

iii. The reduction in the number of price categories associated with the alternative tariff represents a simplification of the tariff structure and comes in a context of technological evolution where the distance of calls tend to have less influence on the level of costs;

iv. Declares that the proposal submitted by PTC is in compliance with the applicable regulatory principles, in particular with respect to its compatibility with the applicable price-cap.

Under these terms and with such basis:

II

7. The Specialist Committee of the Advisory Council sees no obstacle to the application of the tariff proposed by PT Comunicações, S.A.

8. However, for consideration and to avoid similar situations in the future, it sees fit to state the following:

a. In a context of successive declines in the retail prices of the telephone services at a fixed location, particular acuity is required so that the tariff of the universal service provider can be replicated whereby it cannot be deemed to be restricting competition over time.

b. In view of the ongoing revision of the legal regime governing the revision of the US, ICP-ANACOM should consider the application of the general consultation procedure, in the event of alteration of the US tariff, without prejudice to the opinion of the Advisory Council.

c. Although the opinion of the Advisory Council is non-binding, it does not seem fitting that it be heard after the Determination of ICP-ANACOM has been taken and published.

d. The repeated procedure of PTC, consisting of the untimely submission of the proposal to amend the US tariff, calls for plausible reasoning.

9. The present opinion requires submission to the ratification of the Advisory Council met in plenary session.

Specialist Committee.