Alteration of the tariff applicable to communications made from the PTC network to the networks of other operators

Decision on the tariff proposal applicable to communications originating on the network of PTC and terminating on the networks of OSPs, presented by PTC on 12/02/10

1. PT Comunicações, S.A. (PTC), in a letter dated 12/02/10 and following the alteration to the base tariff of the telephone service at a fixed location within the scope of the Universal Service (in particular, the alteration to the alternative tariff applicable optionally upon the request of users) occurring on 19/02/10, presented a proposal to ICP-ANACOM to amend the tariff applicable to communications made to the direct customers of other providers (PTC-OSP), with scheduled entry into force on 01/03/10.

2. The proposal submitted by PTC consists of two separate tariffs - one applying to operators whose average termination prices are close to the average price of termination on the network of PT (Equant and PT Prime) - Tariff Group 1, and a second tariff applying to the remaining operators - Tariff Group 2. According to PTC, the tariff proposal is characterized by making the price per minute for Local and National calls applicable to Group 2 the same, whereby this price is reduced to €0.0338 in normal periods (note that the currently applicable price is €0.0342 and €0.0530 for the Local and National categories, respectively), whereas Tariff Group 1 is identical to the PTC intra-network tariff. The price proposal presented by PTC is reproduced in the following tables.

3. Determination of 14/12/04 ¹ on the imposition of obligations in narrowband retail markets, maintains the rule for the verification of compliance of inter-network tariff tariffs established in the determination of 03/11/00 ², according to which "the price of calls originating on the network of PT and terminated on the networks of other FTS providers shall be identical to the prices of calls both originating and terminating on the network of PT, and may be corrected by the difference, as quantified and reasoned, between the termination of calls on the network of PT and the termination of call on the network of each OSP provider, i.e., differences between the prices of calls to different operators is permitted, provided that this difference is due to differences in the values of the relevant termination charges".

4. Therefore, the methodology adopted by ICP-ANACOM for the verification of the compliance of the PTC-OSP tariff is based on the value given to the following components:

(i) Price of termination on the network of PTC;

(ii) Price of termination on the networks of OSPs; and

(iii) PTC intra-network retail price;

according to the rule shown below:

PTC-OSP retail price = PTC-PTC retail price + OSP Termination Price - PTC termination Price

each component of the calculation indicated referring to the average price, per call, in terms of overall PTC-OSP traffic.

5. In particular with regard to component (iii) indicated in the previous paragraph, ICP-ANACOM reiterates the view expressed in determination of 13/01/10 ³ regarding the use of the alternative tariff-base of the fixed telephone service (Option 2) for the purpose of verifying compliance with the applicable rule in the PTC-OSP tariff according to the current formulation of these options. Therefore, since this tariff does not include any bundled offer, allowing the prices associated with each service (monthly charge and traffic) to be identified, in particular prices associated with calls in each time period, use of this Option is deemed appropriate.

6. Having made an analysis of the proposal presented by PTC, and without prejudice to any future review of the consequences in terms of transparency for users of the existence of intra-network and extra-network tariffs with distinct structures (particularly as regards the existence of free periods), it was concluded that:

a. With regard to the Tariff Group 1, it is noted that the proposal submitted by PTC is comprised of a tariff equal to that practised by PTC for intra-network calls, whereby it is in compliance with the applicable obligations;

b. The average price per call resulting from Tariff Group 2, as proposed by PTC, does not present significant deviations compared to that resulting from application of the defined rule, and is even slightly below that price. Accordingly, Tariff Group 2 as proposed by PTC , is in compliance with the applicable obligations;

c. The merger of the Local and National categories into a single category represents a simplification of the tariff structure and comes in a context of technological evolution where the distance of calls will tend to have less influence on cost levels. This amendment does not represent any increase in prices, even on a one-off basis, whereby, the tariff ensures continuity in relation to the tariff currently in force, specifically with regard to prices, instilling transparency insofar as it replicates the PTC intra-network tariff structure.

7. Accordingly, under the powers provided for in paragraphs b), f) and h) of paragraph 1 of article 6 of the Statutes annexed to Decree-Law no. 309/2001 of 7 December and in accordance with the regulatory objectives set out in points a) and c) of paragraph 1 and points a) and b) of paragraph 2, all of article 5 of Law No 5/2004 of 10 February, the Management Board of ICP-ANACOM determines:

a. To declare that the proposed tariff for communications originating on the PTC network and with destination on the network of OSPs is in compliance with regulatory principles, particularly in respect of the obligations set forth in the determination of 14/12/04.