Trend in telecommunications prices - October 2021

Executive Summary

Prices were unchanged in October 2021

In October 2021, telecommunications prices, as measured by the Consumer Price Index (CPI) sub-index, were unchanged from the previous month¹.

Compared to the same month of the previous year, prices increased by 1.7%, 0.2 percentage points lower than growth in CPI.

The average variation rate of telecommunications prices over the last twelve months in Portugal was 0.2% (0.6 percentage points below the change in CPI (0.8%).

Since January 2021, telecommunications prices have increased by 1.8% due to the increase in monthly fees for bundled offers².

Average change over the last 12 months in Portugal was 0.1 percentage points below the EU

In October 2021, the average rate of change in telecommunications prices in Portugal was lower than in the European Union (-0.1 percentage points). The average variation rate of telecommunications prices over the last twelve months in Portugal was the 12th highest (16th lowest) among EU countries. The country where the biggest price increase occurred was Slovakia (+6.2%) while the biggest decrease occurred in Spain (-3.2%). On average, EU telecommunications prices increased by 0.3%.

Prices have increased by 10.3% since the end of 2010

From a long-term perspective and in accumulated terms, telecommunications prices have increased by 10.3% since the end of 2010, while CPI has increased by 11.8%. 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, 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 intra-EU international calls and SMS messages.

If it was not for the price reduction in intra-EU calls, it is estimated that telecommunications prices would have increased by 13.9% since the end of 2010 (2.2 percentage points above the variation in CPI over this period, in accumulated terms).

Since the end of 2009, prices in Portugal have increased by 8.3% while in the EU they have decreased by 9.7%

Between the end of 2009 and October 2021, telecommunications prices in Portugal increased by 8.3%, 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 finer comparative analysis shows that, between the end of 2009 and October 2021, telecommunications prices fell by 14.0% in Germany, 9.5% in Luxembourg and 0.8% in Belgium, while increasing 8.3% in Portugal.

NOWO has the lowest monthly charge 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 service/offer.

In year-on-year terms, there were 26 price increases and 13 decreases. The following price variations stand out:

• The minimum monthly charge of the Mobile Telephone Service with internet increased by 4.3%, due to discontinuation of NOWO's offer with a monthly charge of five euros;
• Minimum monthly charge 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 minimum 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 minimum 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/month. 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 minimum 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:

By provider, MEO reduced the minimum monthly charge for one service/offer in relation to June 2020 and increased the monthly charge for six 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 the minimum monthly charges for five services/offers and decreased the monthly fee for one offer (mobile telephone service with mobile phone Internet – “Mundo” offer). Vodafone increased minimum monthly charges for seven services/offers and decreased the monthly charge for one offer (mobile internet broadband via PC/tablet). In turn, NOWO increased minimum monthly charges for eight services/offers.

There were notable increases in the monthly charges for 4P and 5P offers by MEO, NOS and Vodafone in May and June 2021³.

According to the European Commission, in 2020, broadband prices in Portugal were the second most expensive in the EU

According to the European Commission (EC), in 2020, broadband prices in Portugal were the second most expensive in the EU, just behind prices in Cyprus.

Portugal was included in the “expensive” or “relatively expensive” clusters in 12 of the 13 fixed broadband usage profiles considered and in all convergent usage profiles (9 usage profiles). The only exception was the 3P usage profile with speeds in the 100-200 Mbps range, where the price in Portugal was included in the “relatively inexpensive” cluster.

In the case of convergent offers, only Portugal and Cyprus were included in the “expensive” or “relatively expensive” clusters in all of the cases considered.

Stand-alone fixed broadband prices in Portugal were between 40% and 49% above the EU average, depending on the download speed. Deviations were higher for lower speeds. Portugal ranked between 21st and 25th in the EU ranking.

Mobile Internet prices were between 13% and 115% higher than the EU average, with Portugal being included in the “expensive” or “relatively expensive” clusters in 11 of the 12 considered bundles. The exception was the usage profile with 0.5 GB and 30 calls, which was priced 1% lower than the average. Portugal was positions between 16th and 26th place in the EU ranking.