Trends in telecommunications prices - March 2021

Executive summary

• In March 2021, telecommunications prices in Portugal, measured using the sub-index of the Consumer Price Index (CPI), increased by 0.4% compared to the previous month. This change resulted from increases in the prices of some quadruple-play bundles.
• Compared to March 2020, the reported variation in prices was -0.8%. Since November 2017, the annual variation in telecommunications prices has been below the rate of the CPI.
• The average change in telecommunications prices over the last twelve months (-1.2%) was 1.2 percentage points below the change in CPI (0.0%). This reduction in prices reflects the entry into force of new European rules on 15 May 2019, regulating the prices of intra-EU communications, as well as a reduction in the monthly charges of some post-paid offers of mobile broadband via PC/Tablet and some bundled offers.
• In cumulative terms, telecommunications prices have increased by 8.9 percentage points since the end of 2010, while the CPI increased by 10.0 percentage points. The reported divergence between the two indexes, first appearing in 2015 and increasing in 2016, is associated with the “price adjustments” applied by the principal telecommunications providers. As of May 2019, divergence between the two indexes narrowed, mainly due to the entry into force of Regulation (EU) 2018/1971 of the European Parliament and of the Council, which made intra-EU international calls and SMS messages subject to a maximum price.
  If it were not for the price reduction in intra-EU calls, it is estimated that telecommunications prices would have increased by 12.5 percentage points since the end of 2010, in accumulative terms 2.5 percentage points above the change in CPI over this period.
• In March 2021, the average variation rate of telecommunications prices in Portugal was lower than in the European Union (-1.1 percentage points). The average variation rate of telecommunications prices over the last twelve months in Portugal was the 10th lowest (18th highest) among EU countries. The country that reported the largest increase in prices was Poland (+5.1%), while the largest reduction occurred in Denmark (-3.5%). On average, telecommunications prices in the EU decreased by 0.1%.
• Between the end of 2009 and March 2021, telecommunications prices in Portugal increased by 6.9%, while in the EU they fell by 9.9%. The difference has narrowed following the entry into force of new European rules regulating the prices of intra-EU communications on 15 May 2019.
  A more detailed comparative analysis with a set of Central European countries shows that, between the end of 2009 and March 2021, whereas prices in Portugal increased by 6.9%, telecommunications prices in Germany fell by 13.6%, in Luxembourg by 7.7% and in Belgium by 2.1%.
• The lowest monthly charges are offered by NOWO in seven services/offers from a range of thirteen services/offers, while MEO, NOS and Vodafone each have the lowest monthly charges for two types of services/offers.
• Compared to March 2020, there were 17 variations in the minimum monthly charges of services/offers, of which 14 were price increases and 3 were reductions.
• The following price variations are of particular note: the minimum monthly charge for quadruple-play offers decreased by 1.1% (50% reduction in the monthly charge of with-box offers for the first 6 months); and the minimum monthly charge for stand-alone fixed broadband (FBB) increased by 4.3%, with discontinuation of NOWO's offer waiving the first monthly charge for its basic service.
• By provider, MEO reduced the minimum monthly charge for one service/offer in relation to March 2020 and increased the monthly charge for four services/offers. One of the services from MEO with a significant decrease in the monthly charge was the offer of the mobile telephone service with mobile phone internet (UZO offer); this offer now has a monthly charge approaching the level of the lowest monthly charge (as provided by NOWO). NOS increased its minimum monthly charges for five services/offers and Vodafone increased the minimum monthly charges for four services/offers. Particular note should be made of the increases in the monthly charges of the triple-play offers of MEO, NOS and Vodafone, occurring in October and November 2020¹.