ANACOM reduces the cost of capital rate applicable to MEO in 2019

On 21 August 2019, ANACOM approved the final draft decision to be notified to the European Commission, the Body of European Regulators for Electronic Communications (BEREC) and the national regulatory authorities of the other Member States of the European Union, on cost of capital of MEO - Serviços de Comunicações e Multimédia (MEO) applicable to the fiscal year of 2019.

Taking into account the methodology in force and the calculation presented and detailed in the draft decision, this Authority determined that, in the context of the 2019 results of MEO's cost accounting system, the cost of capital rate of 7.4021% should be used, a lower value than that approved for 2018 (8.0660%).

In the context of the regulation of the electronic communications market, it is sought, with the determination of the cost of capital rate, to remunerate the investments of regulated companies, as well as to:

  • ensure the right investment incentives;
  • ensure that there are no market distortions through discriminatory and anti-competitive practices;
  • eliminate potential barriers to entry for new competitors;
  • protect consumers from excessive pricing.

On the same date, the report of the prior hearing and consultation to which the respective draft decision approved on 4 July 2019, was also approved, procedures in which the contributions from MEO and Vodafone Portugal - Comunicações Pessoais were received.