Fixed telephone service - 3rd quarter of 2020

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Executive summary

91.9% of families have a fixed telephone service

In the third quarter of 2020 (3Q2020), the penetration rate of the main telephone accesses reached 50.3 per 100 inhabitants. The penetration rate for accesses installed at residential customer request stood at 91.9 per 100 private households.

Number of customers increased by 2.3%

In the 3Q2020, the number of direct access fixed telephone service customers was around 4.2 million, 93.4 thousand more (+2.3%) than in the same quarter of the previous year. This growth is consistent with the estimated historical trend and is linked to the growing popularity of bundled offers which include fixed telephone.

New generation networks responsible for the growth in the number of accesses

The stock of main telephone accesses reached almost 5.2 million equivalent accesses, 82 thousand accesses more than in the same quarter of the previous year. This growth (+1.6%) was primarily due to the increase in VoIP/VoB accesses (+299 thousand accesses), which include accesses supported by fibre optic and cable TV networks.

In the 3Q2020, accesses supported by next generation networks (optical fibre to the home (FTTH), cable TV networks and mobile networks at a fixed location), accounted for 79.7% of telephone accesses, with their weight having increased by 4.4 p.p. year-on-year.

Traffic originated in the fixed network increased due to the impact of COVID-19

During 2020, traffic reversed the downward trend that had started in 2013. In this quarter, the volume of minutes originated in the fixed network increased by 7.2% in relation to the 3Q2019 (-14.4% in the same quarter of the previous year). This exceptional increase was due to the significant changes in the patterns of use of the services arising from COVID-19. It is estimated that the pandemic had a positive effect of 19.1% in the average traffic per access between the 1st quarter of 2020 and the 3rd quarter of 2020. In the 3rd quarter of 2020 specifically, the effect of the pandemic is estimated to have been 15.5%. Nevertheless, the growth of traffic in this quarter was lower than that observed in the second quarter of the year.

By type of call, the growth that occurred was primarily the result of the increased fixed-mobile traffic (+30.1%) and fixed-fixed traffic (+4.0%). It should also be noted that the reduction of national traffic originated in public payphones (-50.5%) was the highest on record. Nomadic VoIP traffic (+30.8%) recorded its highest increase since the 3rd quarter of 2017.

International traffic fell by 17.6% and, in particular, international traffic originated in public payphones declined by 68.7%, probably influenced by the effects of the pandemic.

For the for reasons mentioned above, the average duration of calls originated in the fixed network increased by around 21 seconds in relation to the same quarter of the previous year (+10.7%).

Shares per provider

At the end of the 3Q2020, MEO's share of direct access customers reached 42.1%, followed by the NOS Group with 35.6%, Vodafone with 18.8% and the NOWO/ Onitelecom Group with 3.3%. The shares of direct access customers of MEO, NOS and NOWO/Onitelecom declined by 0.1, 0.5 and 0.4 p.p., respectively, with Vodafone's share having increased by 0.9 p.p.1.

The concentration level in terms of traffic, measured by the Herfindahl-Hirschman index, although high, fell slightly in relation to the same quarter of the previous year.

1 The presented variations do not add to zero due to rounding off.