Trends in telecommunications prices - July 2021

Executive Summary

Prices increased by 0.3% in July 2021

In July 2021, telecommunications prices in Portugal, as measured by the Consumer Price Index (CPI) sub-index, increased by 0.3% compared to the previous month. This was due to changes in some bundled offers.

Compared to July 2020, prices increased by 1.3%. Since November 2017, the annual variation in telecommunications prices has been below the rate of CPI. The average variation of telecommunications prices over the last twelve months was -0.6% (0.9 percentage points below the change in CPI (0.4%)). This price reduction reflects a drop in the monthly charge for some post-paid mobile broadband offers via PC/Tablet and some bundled offers.

Since January 2021, telecommunications prices have risen by 1.9%, 0.5 percentage points above CPI, due to increased monthly charges for bundled offers¹.

The average change over the last 12 months in Portugal was 0.5 percentage points below the change in the EU

In July 2021, the average rate of change in telecommunications prices in Portugal was lower than the average rate of change in the European Union (-0.5 percentage points). The average variation rate of telecommunications prices over the last twelve months in Portugal was the 13th lowest (15th highest) among EU countries. The country that reported the largest increase in prices was Poland (+5.8%), while the largest reduction occurred in Denmark (-3.6%). On average, EU telecommunications prices fell by 0.1%.

Prices have increased by 10.4% since the end of 2010

From a long-term perspective and in accumulated terms, telecommunications prices have increased by 10.4% since the end of 2010 while CPI increased by 10.5%. Divergence between the two indexes, seen first in 2015 and increasing in 2016, is associated with the “price adjustments” applied by the principal providers. As of May 2019, the narrowing divergence between the two indexes was mainly due to the entry into force of Regulation (EU) 2018/1971 of the European Parliament and of the Council, which imposed a maximum price on international calls and intra-EU SMS messages.

If not for the price reduction in intra-EU calls, it is estimated that telecommunications prices would have increased by 14.0% since the end of 2010 (3.6 percentage points above the accumulated variation in CPI over this period).

Since the end of 2009, prices in Portugal have increased by 8.4% while in the EU they have decreased by 9.7%

Between the end of 2009 and July 2021, telecommunications prices in Portugal increased by 8.4%, while in the EU they decreased by 9.7%. The difference narrowed with the entry into force of new European rules on 15 May 2019 regulating the prices of intra-EU communications

A more detailed comparative analysis shows that, between the end of 2009 and July 2021, telecommunications prices fell by 22.1% in France, by 17.1% in Italy and by 8.7% in Spain. Over the same period, prices in Portugal increased by 8.4%.

NOWO has the lowest monthly fee for seven services/offers

Among the services/offers considered, the lowest monthly charges are offered by NOWO in seven cases out of a total of 13 services/offers; MEO reported the lowest monthly charges for four types of services/offers, NOS for two types of services/offers and Vodafone for one type of services/offers.

In year-on-year terms, there were 31 price increases and three decreases. The following price variations stand out:

• The lowest monthly charge for the Mobile Telephone Service with internet increased by 4.3%, due to discontinuation of NOWO's offer with a monthly charge of five euros;
• The lowest monthly charges for 4P offers increased by 8.3% due to discontinuation of NOWO's mobile telephone service option with a monthly charge of five euros, and 1.3% due to discontinuation of NOWO's TV option at 2.5 euros, making a total of 9.8%;
• The lowest monthly charge for 5P offers increased by 4.3%, as Vodafone discontinued its offer of a free first monthly charge of the basic service;
• The lowest monthly charges for FBB+STV (+11.1%), STV+FTS and 3P (+10.0%) offers increased following discontinuation of the TV option from NOWO at 2.5 euros. Additionally, the monthly charge for the STV+FTS offer increased by 77.6% with the discontinuation of an offer from NOS, making a total of 95.4%;
• The lowest monthly charge for STV increased by 30.8% with the discontinuation of an offer from NOS;
• The minimum monthly charge for Mobile Broadband via PC/Tablet increased by 4.3%, as MEO discontinued its offer of a free first monthly charge of the basic service.

In terms of provider, MEO reduced the lowest monthly charge for one service/offer in relation to June 2020 and increased the monthly charge for eight services/offers. The MEO service with a significant decrease in the monthly charge was the mobile telephone service offer with mobile phone Internet (UZO offer). NOS increased minimum monthly charges for eight services/offers and decreased the monthly charge for one offer (mobile telephone service with mobile phone Internet - WOO offer). Vodafone increased minimum monthly charges for seven services/offers and decreased the monthly charge for one offer (mobile internet broadband via PC/tablet). Meanwhile, NOWO increased minimum monthly charges for eight services/offers.

There were notable increases in the monthly charges for 3P offers ("triple play") from MEO, NOS and Vodafone during October and November 2020² and for 4P and 5P offers from MEO, NOS and Vodafone in May and June 2021³.

Finally, it is noted that, the minimum monthly charges for 2P offers have increased compared to the minimum monthly charge for 3P and 4P offers, since at least 2018. In some cases, these types of offers no longer exist. In other cases, the minimum monthly charges for 3P offers fell below the minimum monthly charges for 2P offers.

New Lycamobile offer at prices below major providers

In May 2021, Lycamobile launched a mobile services offer with a monthly charge of 15 euros⁴, with 20 GB of mobile data traffic and 1000 voice minutes or 1000 SMS messages. The pricing of this offer is still higher than charged by this same provider in other markets⁵, but is attractive compared to other offers of the main providers in Portugal. In fact, for mobile data ceilings starting at 10 GB, the monthly fee for this Lycamobile offer is substantially lower. On the other hand, for similar monthly fee levels, the amount of traffic offered by the other providers is significantly lower.