Trends in telecommunications prices - January 2016

Summary

• In January 2016, telecommunications prices in Portugal¹ increased by 2.9 percent versus the previous month (2.4 percent in January 2015). This monthly increase in prices is the largest among all the different sectors of the Portuguese economy.
  
  In year-on-year terms, the increase in prices (4.93 percent) was the 5th highest among the sectors of the Portuguese economy.
  
  On average annual terms, prices increased by 4.23 percent, 3.64 percentage points over inflation (0.58 percent). This increase over CPI is the largest reported since at least 2010. The increase in prices was the 5th highest among the 43 products/services considered.
  
  Since January 2014, telecommunications prices have been increasing at average annual rates above the rate of change reported in CPI.
• On average annual terms, Portugal was the EU country with the highest increase in prices in January 2016. On average, telecommunications prices in the EU have been falling (-0.07 percent).
  
  Since March 2011, telecommunications prices have increased more in Portugal than in the EU.

1. Trends in telecommunications prices - January 2016

According to INE (Statistics Portugal)², in January 2016, telecommunications prices in Portugal increased by 2.9 percent over the previous month (2.4 percent in January 2015). This monthly increase in prices is the largest among all the different sectors of the Portuguese economy.

Versus January 2015, telecommunications prices increased by 4.93 percent, while increasing by 4.23 percent on average over the last twelve months.

Source: INE (Statistics Portugal)
Unit: %

On a year-on-year basis, the increase in prices (4.93 percent) was the 5th highest among the sectors of the Portuguese economy. The difference between this increase and the change in CPI was reported at 4.15 percentage points.

On average terms, the annual increase in prices reported (4.23 percent) was the 5th highest among 43 products/service considered. This is the largest change reported since at least 2010.

In recent years, telecommunications prices have seen increases in both nominal and real terms at the beginning of each year as a result of “price adjustments” effected by providers.

Since January 2014, telecommunications prices have been increasing at average annual rates above the rate of change reported in CPI. In January 2016, the difference between the two rates was reported at 3.64 percentage points - the widest since at least 2010.

Graph 1 - Monthly change in CPI and telecommunications prices

Source: INE (Statistics Portugal)
Unit: %

2. Trends in telecommunications prices in the EU³ - January 2016

According to EUROSTAT⁴, in January 2016, the increase in prices in average annual terms reported in Portugal was 4.3 percentage points above the EU average. On average annual terms, Portugal was the EU country with the highest increase in prices. In relation to the previous month, the variation in prices reported in Portugal (2.9 percent) was also the largest in the EU.

Source: EUROSTAT
Unit: %, p.p.
Note: Information for Ireland, Malta, Sweden and United Kingdom not available. In January 2016, information was not available for Bulgaria and Italy. Information available for Malta and Netherlands in January 2016.

In relation to January 2015, the increase in telecommunications prices in Portugal is the 2nd largest in the EU. The largest increase was reported in Slovenia.

Since March 2011, telecommunications prices have risen more in Portugal than in the EU (in terms of average annual change).

Graph 2 - Average rate of change over previous twelve months - telecommunications prices: Portugal vs EU

Source: EUROSTAT
Unit: %
Note: From the publication, by EUROSTAT, on 25 February 2016, of data for January 2016, the reference year of the HICP series was changed from 2005 to 2015. The series to October 2015 was calculated using 2005 as base period and the "European Union (28 countries)" indicator to calculate the values for the EU, while the series from November 2015 was calculated using 2015 as base period and using "European Union (EU6-1972, EU9-1980, EU10-1985, EU12-1994, EU15-2004, EU25-2006, EU27-2013, EU28)" as an indicator to calculate the values of the EU. There may be differences in the series due to rounding effects. For more information, see New HICP reference year 2015 = 100 http://ec.europa.eu/eurostat/documents/272892/272971/HICP+reference+year+2015%3D100/.

Notes

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¹ ''Telephone, telegraph and telefax services'' sub-index of the Consumer Price Index (CPI) and of the Harmonised Indices of Consumer Prices (HICP), which comprises voice, Internet and subscription TV (STV) services acquired on a stand-alone basis or as part of a bundle of services.
² See ''Consumer Price Index - January 2016'' (INE, 2016), available at Taxa de variação homóloga do IPC situou-se em 0,8% - Janeiro de 2016 https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=244395951&DESTAQUESmodo=2.
³ Information for Ireland, Malta, Netherlands, Sweden and United Kingdom not available. Information for Estonia available from 2011. In January 2016, information was not available for Bulgaria and Italy. Information available for Malta and Netherlands in January 2016.
⁴ See HICP - monthly data (EUROSTAT, 2016), available at Eurostat - monthly data (index) http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=prc_hicp_midx&lang=en. Methodology described at HICP methodology http://ec.europa.eu/eurostat/statistics-explained/index.php/HICP_methodology.