''PT Social'' offer provided by PT Comunicações


Decision on the ''PT SOCIAL'' offer

1. On 2009.03.27, PT Comunicações, S.A. (PTC), notified this Authority of its intention to launch the ''PT Social'' offer, which included a discount by 50% on the full invoice price of the fixed telephone service, up to €7.50 (including VAT at 20%) per invoice, for all customers unemployed for more than six months, and which would apply from April to end December 2009.

2. According to information provided by PTC, the ''PT Social'' offer presents the following characteristics:

a. The discount applies only to customers who have been unemployed for more than six months;
b. The discount benefits holders of the PTC residential fixed telephone service contract for more than six months;
c. The discount applies to one telephone line per customer;
d. The benefit ceases to apply in case of a change in the service holdership or in the customer's professional situation;
e. This benefit may not be combined with other promotions, campaigns or discounts;
f. The subscription and application of the ''PT Social'' offer is conditional upon confirmation from the ''Instituto do Emprego e Formação Profissional'' (Employment and Vocational Training Institute) of data provided by the customer;
g. By accepting the terms and conditions of the offer, the customer authorizes PTC to submit the matter at all times to the ''Instituto do Emprego e Formação Profissional'', in order to confirm the customer’s professional situation.

3. By determination of 2004.12.141, approval was granted to obligations in narrowband retail markets that apply to companies of the PT Group holding significant market power (SMP) in each of those markets, namely: (i) to ensure transparency through the publication of tariffs, service levels of quality and other conditions of the offer; (ii) not to show an undue preference for specific end users; (iii) to provide for the cost-orientation of prices.

4. According to that determination, all offers provided by PTC must be compatible with pre-selection.

5. Having assessed the proposal submitted by PTC, in the light of the compliance with applicable regulatory obligations, namely by analysing the impact of the offer at the level of expected margins for PTC (cost-orientation obligation)  and of the possibility of their replication by alternative operators (non-discrimination obligation), the following conclusions were reached:

a. In case a 3-year customer loyalty period2 is considered, the revenues achieved by PTC, taking into account the assumptions adopted relatively to an average monthly use, are enough to cover the incurred costs;
b. Taking into account a 3-year customer loyalty period, revenues generated from the ''PT Social'' offer allow OSP who wish to replicate the offer to cover PTC’s wholesale services (SLRO and RIO) and to bear the costs of marketing activities;
c. The minimum customer loyalty period that is required so that revenues generated by the ''PT Social'' offer are enough to ensure compliance of the offer with the cost-orientation and non-discrimination obligations is 32 months, or 2.67 years, on the assumption that the offer is valid for 9 months;
d. As regards the transparency obligation, is has been fulfilled, given the information provided in PTC's website as well as advertising in the media.

6. It should be stressed that, as regards the obligation that all offers provided by PTC must be compatible with pre-selection, PTC did not present any limitation in the scope of the ''PT Social'' offer as far as this facility is concerned, it is thus deemed that this offer conforms with that obligation; notwithstanding, this aspect must be confirmed by PTC.

7. Accordingly, by virtue of powers provided for in paragraph 1 b), f) and h) of article 6 of the Statutes attached to Decree-Law no. 309/2001, of 7 December, and in the scope of regulation objectives established in paragraph 1 a) and c), paragraph 2 a) and b) and paragraph 4 e), all of article 5 of Law no. 5/2004 of 10 February, the Board of Directors of ICP-ANACOM hereby determines:

a. Not to oppose to the ''PT Social'' offer, in the wording proposed by PTC to this Authority (namely the granting of a discount up to the end of this year), stressing that in case the validity of the offer is extended, PTC must ensure that other market operators are able to reproduce it, if necessary by introducing specific measures at wholesale level;
b. To request PTC to clarify that the ''PT Social'' offer is not incompatible with pre-selection on narrowband retail markets, in accordance with ICP–ANACOM's determination of 2004.12.14;
c. To request PTC to submit information on the ''PT Social'' offer to this Authority on a monthly basis, given the relevance of information on the respective usage patterns to allow an appropriate evolution monitoring, according to the attached tables.

1 Imposition of obligations of narrowband retail marketshttps://www.anacom.pt/render.jsp?categoryId=216105.
2 On a previsous occasion, namely in the scope of determination of 2007.10.03, on the method for assessment of a margin squeeze in broadband offers provided by the PT Group - 1:50 contention offers, (Margin squeeze in broadband offers provided by the PT Group (1:50 contention)https://www.anacom.pt/render.jsp?categoryId=254542) ICP-ANACOM considered that a 36-month period would be appropriate to represent an average customer loyalty period.