The universal service costs almost 24 million euros over 5 years

ANACOM considers that, in the future, designation of universal service providers for electronic communications is not justified; currently, these providers are paid to provide services that are available in the market or that citizens do not use.

The cost of the universal service over the five-year period of current provisions is reported at 23.8 million euros. This cost is indirectly but ultimately supported by all consumers and users, with no significant benefit derived in return. Without the designation of universal service providers, this amount could instead be given a different application, specifically to satisfy essential needs in an effective manner and at a lower cost, to invest in the development of telecommunications, for example in the provision of the internet broadband to the entire population, and to reduce communications prices.

ANACOM's recommendation not to designate universal service providers is based on the very low level of use of each of the universal service’s components (fixed telephone service, public pay-telephones and comprehensive telephone directory and 118 directory enquiries service). The cost of financing new designations, both for the market as a whole and indirectly for final consumers, is considered disproportionate and entirely unwarranted because it derives no relevant benefit.

In fact, the needs of consumers are met by the set of operators active in the market in all these services: available fixed networks cover the majority of the population and several operators provide this service, even offering fixed telephone services at lower prices than the universal service. Furthermore, in the case of public pay-telephones, the universal service makes up the minority of total stock available on the market (42%), while the majority (58%) of public pay-telephones are operated by the various operators and are outside the universal service. As regards telephone directories and the directory enquiries service, information can also be accessed through electronic directories, search engines and social networks, as well as by accessing services provided using the '18XY' numbering range.

Nevertheless, while ANACOM considers that designation of universal service providers is not justified, it will continue to follow developments, ensuring that the market continues to respond properly to the needs of the population. If there are market failures, solutions can always be adopted to ensure that the needs of consumers are met, but in a less costly manner.

In a scenario of non-designation of service providers, and as in the current universal service, there are some specific offers and functionalities provided for users with special needs (for example 20 free calls per month to 118 braille for blind or partially-sighted people). ANACOM considers that these offers and functionalities should also be included in the context of policies to ensure the inclusion of these populations. For example, in the case of public pay-telephones, it is recommended that measures should be taken to ensure that public pay-telephones installed in the future are accessible to people with special needs.

ANACOM's decision, not considering it necessary to designate providers, was preceded by a public consultation with participation by the four largest operators. NOS and Vodafone argued that there is no need to designate a universal service provider in any of the components of provision: fixed telephone, public pay-telephones and telephone directories and directory enquiries services. They also considered that broadband should not be included in the universal service, an opinion shared by MEO. MEO also argued that it is not necessary to maintain the universal service in its fixed telephone component, but it argued for the designation of a provider in the case of telephone directory and 118 directory enquiries service, which it currently provides. NOWO/ONI supported continuity of the status quo.

At a European Union level, there are already six member states which do not designate providers for any universal service component: Germany, Estonia, Luxembourg, Poland, Romania and Sweden.

Fixed telephone service costs 9.6 million euros and has 2 customers

It is observed that:

  • There are only 2 customers of the fixed telephone universal service - a service which has been in place for about 4 years;
  • There are zero customers making use of the tariff for pensioners or the specific functionalities for customers with special needs;
  • There is a high level of population coverage by fixed and mobile networks and a small percentage of households without access;
  • There are retail offers that enable access to electronic communications services at a fixed location at an affordable price and with adequate quality;
  • In the case of the populations that had connections affected by the fires, the fixed telephone service did not contribute to a resolution of their situation;
  • Germany, Estonia, Luxembourg, Poland, Romania and Sweden no longer designate providers for this component of the universal service. Two other countries only designate providers for services to people with special needs.

Under these circumstances, ANACOM concludes that the financing of this provision has no relevance as a safety net, so that designation of a universal service provider for this component is unnecessary in terms of benefits generated. In terms of costs, it represents a disproportionate burden on society as a whole.

Although the continuity of the Fixed Telephone Service is not in question, as provided by operators, as is already the case, ANACOM recommends continued monitoring of market developments to assess whether there is a need to consider alternative solutions, such as the possibility of awarding communication vouchers or vouchers that respond to needs that the market may not be satisfying.

Only 42% of the existing stock of public pay-telephones in Portugal receives financing and costs 12.3 million euros

It is observed that:

  • There is a very low level of public pay-telephone use;
  • There has been a reduction in traffic over recent years - in 2016 and 2017 only about 2 calls per public pay-telephone per day.
  • The use of public pay-telephones is justified mainly in situations where callers have no credit available on their mobile phones or have no or weak battery;
  • They are used for illicit calls and anonymous calls (e.g. hoax emergency calls to 112);
  • Immigrant users and, to some extent, tourists are referenced as relevant users;
  • They have not been used as an alternative for making calls in emergency situations, nor do they offer greater resilience;
  • FTS and MTS penetration has increased and is higher in Portugal than in many countries where providers are no longer designated;
  • Most countries of the European Union (15) do not designate universal service providers for public pay-telephones: Germany, the Netherlands, Belgium, Cyprus, Sweden, Hungary, Denmark, Poland, Romania, Slovakia, Latvia, Finland, Estonia, France and Luxembourg.

Under these circumstances, ANACOM concludes that the financing of this service is inefficient and disproportionate, clearly representing an excessive cost to society given the benefits derived from the service.

Although continuity of the public pay-telephone service is not in question, as operated by operators, as already occurs in most cases, ANACOM recommends monitoring the market to assess whether there is a need to adopt alternative solutions, such as promoting the use of communications services at parish councils and service pharmacies. Solutions of greater resilience in emergency situations could also be studied, which may involve law enforcement, the fire brigade, parish councils, schools and other relevant organisations, providing them with mechanisms to allow telephone contact.

Only 5% of telephone numbers are included in directories and in the 118 service, but represent a cost of 1.9 million euros

It is observed that:

  • Only 1.1 million subscribers have their data included in universal service directories, i.e. about 95% of all accesses in the Portuguese market are not included in this database;
  • Growing concern about data privacy means that an increasing number of citizens choose not to include their contact data in directories;
  • There is no strong incentive to develop the business because it obliges providers to share customer data with a competitor;
  • There are fewer than seven thousand requests for printed telephone directories annually;
  • Only one in ten people used the electronic directory at all in 2016;
  • One in five inhabitants made a call to 118 in 2016, 30% fewer than in the previous year (in 2017, there was an estimated decrease of 27%);
  • There are alternative means of making this information available in the market: through services provided in electronic directories, search engines, social networks and using the "18XY" numbering range;
  • Most EU member states (16 states) no longer designate providers for paper and electronic directories, while 20 do not designate providers for the directory enquiries service.

Under these circumstances, ANACOM concludes that financing of this service is not justified.

ANACOM considers that, if it is concluded that there is a need to ensure the availability of contact data of public services, in particular for sections of the population without access to the Internet, consideration should be given to the creation of a database for this purpose, to be developed by ANACOM.


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