MEO, NOS and Vodafone increase monthly charges of 3P bundles by 3.3% and reduce quality

Between October and November 2020, the three main electronic communications providers in Portugal (MEO, NOS and Vodafone) increased thee monthly charges of their triple play basic offers by 3.3% (+1 euro). Following this price increase, which occurred at the same time and in the same proportion, being much higher than the inflation rate, the lowest monthly charge of their triple play bundles increased to around 31 euros. Since 2018 there have been no differences in the monthly charges of this type of bundles, which include fixed internet, fixed telephone and television by subscription (see Table 1).

Simultaneously with the price increase, there was also a reduction in the quality of this type of bundles provided by the three operators, as the announced download speed fell from 100 Mbps to 30 Mbps.

Two of the providers, MEO and NOS also imposed monthly fixed data traffic limits (500 GB and 600 GB, respectively), something that had not existed in the communications market in Portugal since the very first days of broadband offers. This embodies a substantial change of the product configuration at least in relation to this past decade. However, in the meantime NOS has withdrawn the traffic limit indicated above.

These changes will potentially affect a considerable number of subscribers. Three play bundles are subscribed by close to 1.7 million customers in Portugal, representing around 40% of total subscribers.

Source: Websites of the providers.

It should also be noted that the price of these bundles already compared unfavourably with the international average. According to the international price comparisons conducted by the European Commission, in October 2018 the internet + fixed telephone + television bundle prices were higher than the EU28 average by 2% to 12.7%. The 1 Gbps offers were an exception, with prices lower than the EU28 average (-22.3%), but which are only subscribed by 1.6% of the customers.

This price increase and the deterioration of the quality of the offers occurs at a time when the users are especially and increasingly dependent on the supply of connectivity for professional and educational purposes, among others, due to the second wave of the Covid-19 pandemic, during which telework has once again become mandatory and there is a civic duty to stay at their home.

Moreover, the consumers do not have equivalent alternatives (see Table 2), as the fourth operator's offer is not a substitute because it does not have the same territorial coverage. In fact, NOWO, the fourth main provider of electronic communications at a fixed location, offering the lowest monthly charges for triple play bundles (around 24 euros), is not present countrywide and does not have its own mobile network, being a virtual mobile network operator (MVNO) that supports its mobile service offers on third-party networks.

Unit: Euros including VAT
Source: ANACOM
Note 1: TVS – Subscription TV signal distribution service; BLF – Fixed broadband; STF – Fixed telephone service; STM – Mobile telephone service; BLM – Mobile broadband supported by PVC/table
Note 2: The minimum monthly charges for each service/offer are highlighted in bold.

During various years, Vodafone's monthly charges for triple play bundles were considerably cheaper than those of all the other providers (see Table 3). It should be recalled that, at the beginning of March 2013, Vodafone launched a triple play bundle with a monthly charge of 24.90 euros. This offer included 100 television channels, a download speed of 50 Mbps and unlimited calls to national and international fixed networks (30 countries).

After the launch of this Vodafone offer, the historical trend of its share of bundled service subscribers changed in a statistically significant manner, having grown more than all the other providers. In the meantime, Vodafone gradually increased the monthly charge of these offers (+20% in 5 years), such that there were no longer relevant differences between the monthly charges applied by the three main providers during 2018.

Source: Website of the provider

These changes in the monthly charges of the offers of MEO, NOS and Vodafone affect the new subscribers and the former subscribers when intending to renew their contract (for example, at the end of their loyalty periods).

Consult the statistical report:

• Nota sobre as ofertas base triple play - preços e qualidade em outubro/novembro de 2020 https://www.anacom.pt/render.jsp?contentId=1575647