Opinion on the 2015-2017 Multi-Annual Activities Plan
and 2015 Budget
1. Introduction
In accordance with applicable legal and statutory provisions, it is incumbent upon us to present our opinion on the Multi-Annual Activities Plan for the 2015-2017 three-year period and the 2015 Budget of ICP-Autoridade Nacional de Comunicações (ICP-ANACOM).
2. Strategic Plan 2015-2017
As regulator of the communications market, it is the defined mission of ICP-ANACOM "to regulate the electronic communications market and postal sector, ensuring the existence of conditions which are conducive to the opening up of markets and increased competition, innovation and investment, enabling the development of a diverse range of competitively priced offerings which respond to consumer needs".
The fulfilment of ICP-ANACOM's mission and the accomplishment of its ambition (vision) entail definition of a set of critical factors for success and the resulting strategic objectives and priority actions for the three years from 2015 to 2017, taking into account Portugal's current economic and financial situation.
The strategic objectives envisaged for the period under consideration are:
- Assure and protect the interests of users and citizens;
- Promote open and competitive markets;
- Ensure the efficient management of public resources;
- Promote institutional and technical cooperation;
- Promote internal efficiency and effectiveness.
These strategic objectives have been duly detailed in the 2015-2017 Multi-Annual Activities Plan, as presented by the Management Board.
The document also presents, in an exhaustive manner, a set of actions for each of the defined strategic objectives and timings.
As regards available resources, we note the following:
2.1. Human Resources Plan
In its 2015-2017 Strategic Plan, ICP-ANACOM intends to streamline professional development plans that instil mobility, seeking to ensure a sustained ability to generate and manage knowledge and innovation.
In this area, and for the period in question, ICP-ANACOM highlights the key points of intervention:
- Consolidation of the ANACOM "Academy" integrated training and development programme;
- Appraisal of the organisational climate to assess staff needs and satisfaction levels;
- Implementation of actions as part of the annual programme of professional and academic internships, in partnership with academic institutions.
2.2. Investment Plan
Execution of the Investment Plan for the 2015-2017 period will continue to take Portugal's economic and financial recovery into account, furthering the promotion of efficiency in ICP-ANACOM's activities and the rationalisation of expenditure and investment, to achieve further reductions in the regulatory fees it charges the sector. Nevertheless, ICP-ANACOM intends to follow on from strategic investments initiated in previous years, instilling conditions which are fitting and necessary to support its activities of providing regulation and supervision of the communications sector and advice to the Government, as is incumbent upon ICP-ANACOM under its statutes.
The investment programmes listed in the Plan, which seek to follow on from the programmes outlined in previous plans, are presented in the following table:
|
Items |
2015 |
2016 |
2017 |
Change (%) |
|
|
2016/2015 |
2017/2016 |
||||
|
Modernisation of laboratories |
146 000 |
150 000 |
150 000 |
2.74 |
0.00 |
|
Technological refurbishment of |
110 000 |
300 000 |
300 000 |
172.73 |
0.00 |
|
Updates to SINCRER System |
528 500 |
260 000 |
260 000 |
(50.80) |
0.00 |
|
DTT Probes |
51 000 |
100 000 |
100 000 |
96.08 |
0.00 |
|
CIS |
420 000 |
100 000 |
100 000 |
(76.19) |
0.00 |
|
Upgrade of technology - architecture |
1 615 000 |
1 365 000 |
1 365 000 |
(15.48) |
0.00 |
|
Acquisition of basic radio equipment |
70 000 |
100 000 |
100 000 |
42.86 |
0.00 |
|
Acquisition of computer hardware |
135 000 |
135 000 |
135 000 |
0.00 |
0.00 |
|
Miscellaneous day-to-day acquisitions |
154 000 |
164 000 |
164 000 |
6.49 |
0.00 |
|
Total |
3 229 500 |
2 674 000 |
2 674 000 |
(17.20) |
0.00 |
Unit: Euros
2.3. Financial Plan
The 2015-2017 Financial Plan reflects the proper quantification of the financial resources needed for the execution of the activities set out in the plan.
Income plan:
|
Items |
2015 |
2016 |
2017 |
Change (%) |
|
|
2016/2015 |
2017/2016 |
||||
|
Electronic communications |
|
|
|
|
|
|
* Statements supporting rights |
14 000 |
14 000 |
14 000 |
0.00 |
0.00 |
|
* Exercise of electronic communications |
24 480 000 |
24 300 000 |
24 200 000 |
(0.74) |
(0.41) |
|
* Use of frequencies - SCET [1] |
37 933 200 |
37 933 200 |
37 933 200 |
0.00 |
0.00 |
|
* Use of frequencies - other |
11 042 800 |
10 651 200 |
10 365 400 |
(3.55) |
(2.68) |
|
* Use of numbering |
1 756 200 |
1 756 200 |
1 756 200 |
0.00 |
0.00 |
|
Exercise of the postal activity |
1 500 000 |
1 983 600 |
2 100 000 |
32.24 |
5.87 |
|
ITED-ITUR |
43 100 |
43 100 |
43 100 |
0.00 |
0.00 |
|
Remaining provisions of service |
405 000 |
405 000 |
405 000 |
0.00 |
0.00 |
|
Interest and other similar income |
863 000 |
650 000 |
450 000 |
(24.68) |
(30.77) |
|
Other income and gains |
155 400 |
155 400 |
155 400 |
0.00 |
0.00 |
|
Income |
78 192 700 |
77 891 700 |
77 422 300 |
(0.38) |
(0.60) |
Unit: Euros
In the Income Plan, the main revenue sources derive from the settlement and collection of fees associated with the activity of electronic communications network and service provider, with the use of frequencies and with the use of numbering; these fees represent around 96 percent of budgeted income.
The Expenditure Plan for the three-year period under review is presented below:
|
Items |
2015 |
2016 |
2017 |
Change (%) |
|
|
2016/2015 |
2017/2016 |
||||
|
External supplies and services |
11 193 000 |
11 223 600 |
11 073 600 |
0.27 |
(1.34) |
|
Personnel costs |
23 062 400 |
23 380 900 |
23 699 600 |
1.38 |
1.36 |
|
Depreciation and amortization |
3 207 500 |
3 221 500 |
2 986 200 |
0.44 |
(7.30) |
|
Impairment losses |
90 000 |
90 000 |
90 000 |
0.00 |
0.00 |
|
Provisions for period |
5 338 800 |
5 400 000 |
5 400 000 |
1.15 |
0.00 |
|
Other expenses and losses |
7 211 700 |
7 078 500 |
7 059 800 |
(1.85) |
(0.26) |
|
Expenses |
50 103 400 |
50 394 500 |
50 309 200 |
0.58 |
(0.17) |
Unit: euros
The Expenditure Plan includes all expenses which it is necessary to incur to ensure the development of activities underlying the accomplishment of the tasks assigned to ICP-ANACOM, in particular the regulation and supervision of the communications sector, the management and oversight of the radio spectrum, the monitoring of obligations of concessionaires which are licensed and authorized to provide communications services, representation of the Portuguese State, payment of contributions to international post and telecoms organisations and performance of its role as adviser to the Government. It should be emphasised that there is evidence of a significant containment of total expenditure, which, however, as a result of reductions made in previous years, is becoming increasingly limited.
ICP-ANACOM provides a contribution as founder to FPC - Fundação Portuguesa das Comunicações (Portuguese Communications Foundation) and participates in the running costs of Autoridade da Concorrência (Portuguese Competition Authority), in accordance with Government guidelines.
We have obtained explanations, which we have deemed reasonable, for the estimates made. It is also noted that the Investment and Expenditure Plans have budgetary coverage.
3. Budget for 2015
The draft Budget of ICP-ANACOM for the 2015 financial period took into account the assumptions and values considered in the Financial Plan which forms part of ICP-ANACOM's Multi-Annual Activities Plan for 2015-2017; it also took into account Portugal's current economic and financial situation.
3.1. Investment Budget
The Investment Budget for 2015 has the aim of continuing and accomplishing the modernisation and upgrading of monitoring centres and information systems, providing ICP-ANACOM with the means to keep up with the major transformations taking place in communications and ensuring appropriate support of information systems:
| Items |
2015 |
|
Land and buildings |
160 000 |
|
Basic radio equipment |
790 500 |
|
Transport equipment |
24 000 |
|
Office equipment |
1 175 000 |
|
Computer programs (Software) |
1 020 000 |
|
Adaptation of premises |
60 000 |
|
Total |
3 229 500 |
Unit: euros
ICP-ANACOM's planned investments aim to continue the modernization and re-equipping of its monitoring and inspection activities and the necessary updating of its information systems.
From the amount budgeted for investment during the 2015 financial year, the following projects are highlighted:
- Update and modernisation of spectrum monitoring equipment;
- Development of a geo-referenced technological platform to support the SIC - Sistema de Informação Centralizado (Centralised Information System), providing legal compliance with Decree-Law No. 123/2009;
- Renewal and upgrade of information systems, both in terms of hardware (servers), and in terms of developing new applications to support ICP-ANACOM's core activities.
3.2. Income Budget
| Items |
2015 |
|
Fees - exercise of the activity of electronic communications |
24 480 000 |
|
Fees - use of frequencies |
48 976 000 |
|
Fees - use of numbering |
1 756 200 |
|
Fees - exercise of activity of Postal Services |
1 500 000 |
|
Other services |
462 100 |
|
Interest and similar income |
863 000 |
|
Other income and gains |
155 400 |
|
TOTAL |
78 192 700 |
Unit: Euros
The 2015 Income Budget results from the application of fees as provided for under current legislation. Calculation of the final values has not yet taken the variation in the activity of each of the types of service into account, whereas the pricing policy is adjusted to the need of ICP-ANACOM to cover its costs and investment.
The amount budgeted in Interest and similar income essentially comprises gains derived from interest on deposits and from investment of surplus cash.
Other income and gains comprises values recorded in respect of European Union grants and other income of a small and occasional nature, such as derived from the sale of tender documents, scrap items, disposal of assets, etc.
3.3. Expenditure Budget
| Items |
2015 |
|
External supplies and services |
11 193 000 |
|
Personnel costs |
23 062 400 |
|
Depreciation and amortization |
3 207 500 |
|
Impairment losses |
90 000 |
|
Provisions for period |
5 338 800 |
|
Other expenses and losses |
7 211 700 |
|
TOTAL |
50 103 400 |
Unit: Euros
Under the heading External supplies and services, which represents about 22% of ICP-ANACOM's expenditure budget, and due to their importance, we highlight the costs budgeted for Specialised Works (3,408,800 euros), Maintenance and repairs (2,685,200 euros) and Rents and leases (1,669,800 euros).
Personnel Costs, which represents about 46% of the Expenditure Budget, has a budgeted amount of 23,062,400 euros.
The amount of 3,207,500 euros recorded as Depreciation and amortisation expenses includes depreciation of equipment in ICP-ANACOM's possession in accordance with specific rates (items carried over from CTT) or generic rates set out in Regulatory Decree no. 25/2009 of 14 September.
The net changes occurred, as regards impairments affecting receivables, are budgeted under Impairment losses, with a value of 90,000 euros.
The account Provisions for period has a budgeted amount of 5,338,800 euros; this item is constituted to cover lawsuits brought against ICP-ANACOM, particularly in connection with appeals against decisions taken concerning the regulation of the market. ICP-ANACOM considered it necessary to review the rules governing the calculation of estimates for the constitution of provisions and the terms thereof; this has led to a significant increase in such costs.
Under Other expenses and losses, the following items are highlighted: Contributions/Transfers (5,526,100 euros) and Subscriptions (963,100 euros).
4. Opinion
In light of the analysis that follows from the items which have since been made available to the Audit Committee for this purpose, rectified with the data presented on this date, it is our opinion that both the 2015-2017 Multi-Annual Activities Plan and the 2015 Budget of ICP-ANACOM, as governed by the strategic objectives and outlined priority actions, are fit for submission to ministerial approval in accordance with the provisions of the respective statutes.
Lisbon, 14 August 2014
The Audit Committee
Henrique Armando Antunes Ferreira - Chairman
Oliveira, Reis & Associados, SROC, Lda.
Represented by
Dr. José Vieira dos Reis, ROC no. 359
Dr. Duarte Nuno de Carvalho Gomes de Castro - Member
