Mobile services - 3rd quarter of 2020

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Executive summary

Penetration of mobile services with actual use reached 119.4 per 100 inhabitants

At the end of the third quarter of 2020, the penetration of the mobile service reached 165.7 per 100 inhabitants. If only mobile accesses with actual use were considered1 (excluding M2M2), the penetration rate in Portugal would be 119.4. On the other hand, if we were to exclude accesses exclusively made by data and internet access services (cards associated to a PC/tablet/pen/router), the penetration of mobile services would be 114.2 per 100 inhabitants.

The penetration of mobile accesses offered in bundles, or with services provided at a fixed location was 46 per 100 inhabitants (convergence bundles)3.

Number of users fell by 1.8% in the last 12 months

The number of mobile accesses authorised to use the service amounted to4 17.1 million. Of these, 12.3 million (72% of the total) were actually used. Excluding the number de accesses made by PC/tablet/pen/router, the number of mobile accesses reached 11.8 million.

The number of subscribers that actually used the service decreased by 226 thousand subscribers (-1.8%) year-on-year. This change is explained by the evolution of prepaid plans (-10% in the last 12 months), which have been on a downward trend since 2013, and currently account for 38.7% of the total accesses actually used. The post-paid and hybrid plans5 (+4.2% in the last 12 months), continued on a trend of growth which has been the case since 2012. This trend is associated to the continued increase of the penetration of bundled services which are included in the mobile telephone service.

High growth of voice traffic per access and average duration of calls due to the impact of COVID-19

Mobile voice traffic in minutes increased by 13.2% in relation to 2Q2019. Nevertheless, the growth of traffic in this quarter was lower than that observed in the previous quarter (+21.9%)

The evolution that occurred in voice traffic in minutes was influenced by COVID-19. It is estimated that, due to the effect of the pandemic, traffic measured by mobile access is likely to have increased by 10.8% in the 2nd and 3rd quarters of 2020. In the 3rd quarter of 2020 specifically, the growth of traffic attributable to the effects of the pandemic is estimated to have been 6.9%.

The average number of conversation minutes per mobile voice access in 3Q2020 was 236 per month, 31 minutes more (+15.4%) than in the same period in the previous year. The average duration of the calls was 183 seconds per call, 24 seconds more (+14.8%) than in the same period of the previous year.

By type of call, the strong growth observed in voice traffic in minutes was primarily the result of the increased off-net traffic (+18.3%) and on-net traffic (+11.9%). Significant increases were also recorded in mobile-fixed traffic (+22%), and calls to short and non-geographic numbers (+18.3%). Traffic destined to international networks fell by 30.7% in relation to the same period of the previous year, influenced by the effects of the pandemic.

Mobile internet penetration was 78.5 per 100 inhabitants

The number of actual users of the mobile internet access service stood at 8.1 million (-0.1% year-on-year). This figure corresponds to a penetration of close to 78.5 per 100 inhabitants (-0.2 p.p. than in 3Q2019).

The reduction of the number of users is explained by the fact that the growth of the number of mobile phone internet users (+0.1%) was insufficient to offset the reduction of the number of users of the internet access service via PC/tablet/pen/router (-3.3%). This evolution may have been influenced by the behavioural changes associated to the COVID-19 pandemic.

Two new service providers emerged in 2019 (T-Mobile HotSpot and GmbHP Cubic Telecom Limited) offering a mobile internet access service in motor vehicles. At the end of the 3Q2020, the number of accesses actually used in this service was absolutely minor (77 active users), having generated around 308 GB of traffic in the quarter.

Mobile internet traffic increased by 25.6% and average monthly traffic reached 5.3 GB/month

Mobile broadband (BM) internet access traffic increased by 25.6% in relation to the 3Q2019. This growth is explained by the increased intensity of use of the service.

The monthly average traffic per active mobile internet user increased by 25.1% year-on-year. Each mobile broadband user consumed 5.3 GB per month on average. The average monthly traffic generated via PC/pen/tablet/router reached 23.6 GB (+40.1%). The seasonal effect associated to the summer, in addition to the likely impact of COVID-19 and the promotional offers launched by the smaller providers in the 2Q20206, also contributed to the evolution that occurred, especially in the case of the offers supported by PC/tablet/pen/router.

Machine-to-machine (M2M) accesses increased by 3.3%

At the end the 3Q2020, around 1.2 million active mobile accesses related to M2M were recorded, a year-on-year increase of 10.4%, representing the lowest growth since this indicator has been collected.

Significant decline in international roaming as a result of the restrictions imposed on international travel

Roaming traffic declined in all types of traffic in relation to the same period of the previous year, especially internet traffic (-25-4% in the case of roaming in and -25.2% in the case of roaming out). Internet traffic has progressively grown at rates above 50% over the last 5 years, but has now recorded, for the second consecutive quarter, negative growth rates year-on-year.

The decline recorded in all types of roaming in and roaming out traffic was likely the result of the fall in international travel derived from the pandemic situation.

In this quarter, the roaming trade balance (i.e., roaming in traffic – roaming out traffic showed a surplus in the case of traffic in minutes, in contrast to what has been happening in the last five years (with the exception of 2017). The level of roaming in by roaming out traffic coverage in minutes was 128%. Likewise, in the case of internet access, roaming in traffic was substantially higher than roaming out traffic. In the 3Q2020, the volume of roaming in traffic was 5.9 times higher than roaming out traffic.

Shares per provider

MEO was the provider with the highest share of active mobile accesses with actual use (41.9%), followed by Vodafone (30.2%), NOS (26.4%) and NOWO (1.6%). In relation to the same period of the previous year, the share of mobile accesses of NOS increased by 1.4 p.p., with the shares of MEO's and Vodafone having fallen by 1.2 p.p. and 0.3 p.p., respectively.

Particular note should be made of the growth of the share of subscribers of NOWO (+0.3 p.p.), which was the provider that most grew in relative terms. This evolution is associated to the launch, in the first quarter of 2020, of offers with significantly lower prices than those of the available alternatives.

The concentration level, measured by the Herfindahl-Hirschman index, although high, fell slightly year-on-year, as has happened since 2012.

Regarding the shares of mobile broadband internet access subscribers, MEO's share was 38.5%, followed by NOS with 30.1%, Vodafone with 29.0% and NOWO/ Onitelecom with 2.1%. In the 3T2020, NOS' share increased by 1.6 p.p., with this provider moving upwards to hold the second place in this ranking. MEO's share of subscribers increased by 0.2 p.p., while Vodafone's share fell 2.3 p.p. NOWO/Onitelecom was the provider that showed most growth in relative terms for the reasons indicated above.

NOS has the highest share of mobile broadband internet traffic (45.2%), followed by MEO and Vodafone (28.0% and 26.3%, respectively). Compared to the same period of the previous year, NOS' share increased by 2.9 p.p. The shares of Vodafone and MEO declined by 1.8 p.p. and 1.2 p.p., respectively.

1 Active mobile access, including for example, subscription plans, minute plans, plans of monthly charges convertible into traffic, etc., that are entitled to use one of the contracted services and actually use one of the services contracted in the reporting period.
2 M2M applications use the mobile networks and internet to operate, monitor and interconnect machines and equipment (i.e., tele-alarms, tele-security, telemetry, etc.). These are associated to the so-called internet of things.
3 This involves a portion of the 165.7 per 100 inhabitants referred to in the previous paragraph.
4 Active mobile accesses are entitled to use the services, but they might not have been used.
5 Hybrid plans are tariff plans which simultaneously show features of both prepaid and post-paid plans. These plans include a traffic ceiling in a post-paid scheme. However, the traffic above this ceiling is charged at a prepaid rate.
6 See