Trends in telecommunications prices - December 2021

Executive Summary

Prices up by 0.6% in December 2021

In December 2021, telecommunications prices, as measured by the respective sub-index of the Consumer Price Index (CPI), increased by 0.6% compared to the previous month due to the end of the “Black Friday” promotions.

Compared to the same month a year earlier, prices rose by 1.1%, 1.6 percentage points (p.p.) less than the growth recorded in the CPI.

The average rate of change in telecom prices over the last twelve months was 0.5%, which is 0.8 p.p. below that registered by the CPI (1.3%).

It is worth noting that since January 2021 telecom prices have grown 1.2% due to the rise in the monthly fees of bundled offers¹.

Average change over the last 12 months in Portugal was 0.1 p.p. less than in the EU

In December 2021, the average rate of change of telecommunications prices in Portugal was lower than in the European Union (-0.1 p.p.). The average rate of change of the last twelve months in telecommunications prices in Portugal was the 11th highest (17th lowest) among EU countries. The highest price increase occurred in Slovakia (+7.4%) while the highest decrease was recorded in Bulgaria (-3.2%). On average, telecom prices in the EU increased by 0.6%.

Prices have increased by 9.7% since the end of 2010

In a long-term perspective and on a cumulative basis, telecom prices grew by 9.7% since the end of 2010 while the CPI grew by 12.3%. The discrepancy between the evolution of the two indexes began in 2015 and widened in 2016, as a result of “price adjustments” made by main providers. As of May 2019, the decrease in the discrepancy 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 price cap on intra-EU international calls and SMS.

If the price reduction of intra-EU calls had not occurred, it is estimated that telecom prices would have grown 13.3% since the end of 2010, and would have been, on a cumulative basis, 1.0 p.p. above the CPI change in this period.

Since the end of 2009, prices have increased by 7.7% in Portugal and decreased by 9.8% in the EU

Between the end of 2009 and December 2021, telecom prices in Portugal increased by 7.7%, while in the EU they decreased by 9.8%. The gap narrowed with the entry into force, on 15 May 2019, of new European rules regulating intra-EU communication prices.

A more detailed comparative analysis shows that between the end of 2009 and December 2021, telecom prices decreased by 17% in Bulgaria, while in Hungary, Portugal and Romania they increased by 1.6%, 7.7% and 19.1% respectively.

NOWO presents the lowest monthly fee for eight offers

The lowest monthly fees are offered by NOWO in eight cases from a range of 13 services/offers, while MEO, Vodafone and NOS presented the lowest monthly fees for three, two and one type of services/offers, respectively.

On a year-on-year basis, 23 price increases and 3 price decreases were recorded. The following price changes stand out:

• The minimum monthly PTV subscription fee increased by 30.8%, following the discontinuation of an offer from NOS;
• The minimum monthly fee for FBB decreased by 4.2%, due to NOWO’s offer of a free first monthly charge for the basic service;
• The minimum monthly fee for the Mobile Telephone Service with Internet increased by 50%, due to the discontinuation of the offers from NOWO and MEO (Uzo offer) with a monthly fee of EUR 5.00;
• The minimum monthly fee for Mobile Broadband via PC/Tablet increased by 4.3%, following the discontinuation of MEO’s offer of a free first monthly charge for the basic service;
• The minimum monthly fees of the FBB+PTV (+11.1%), PTV+FTS and 3P (+0.4%) offers increased due to discontinuation by NOWO of the TV option at EUR 2.5/month. Additionally, the monthly fee of the PTV+FTS offer increased by 77.6% with the discontinuation of an offer from NOS, for a total of 78.4%;
• The minimum monthly fees for 4P offers increased by 8.3% due to the discontinuation of NOWO’s mobile telephone service option with a monthly fee of EUR 5.00, and by 1.3% due to the discontinuation of NOWO’s TV option at EUR 2.5/month, for a total of 9.8%;
• The minimum monthly charge for 5P offers increased by 4.3%, following the discontinuation of Vodafone’s offer of a free first monthly charge for the basic service.

On a provider basis, MEO increased the monthly fees of seven services/offers. NOS increased the minimum monthly fees of five services/offers and decreased the monthly fee of one offer (mobile telephone service with Internet - Mundo offer). Vodafone increased the minimum monthly fees of three services/offers and decreased the monthly fee of one offer, namely the Internet via PC/tablet mobile broadband offer. In turn, NOWO increased the minimum monthly fees of eight services/offers and reduced the monthly fee of one service/offer (offer of the first monthly charge of the basic single-play fixed broadband service).

The monthly fee increases of the 4P and 5P offers made available by MEO, NOS and Vodafone, that occurred in May and June 2021, are particularly noteworthy².