Universal service - Fixed telephone service residential tariff

Decision on the tariff proposal for the residential telephone service at a fixed location, within the scope of the universal service, as presented by PTC on 27.10.2009.

1. On 27/10/09, PT Comunicações, SA (PTC) submitted a proposal to ICP-ANACOM to amend the tariff of the Universal Service (US) with respect to the scenario which is applicable on an optional basis upon customer request.
   
   
2. The proposal submitted by PTC provides for an increase in the discount on the monthly line charge, in respect of the monthly charge of the main base tariff, from 60 cents (including VAT, 50 cents excluding VAT) to 70 cents (including VAT, 58 cents excluding VAT). The following table summarizes the fixed telephone service tariff provided by PTC. Under this proposal, the new tariff would be applied retroactively from 01/07/09.

Source: PTC

Source: PTC

3. With respect to the price plan applicable by default (which is characterised by free traffic during the periods between 9pm-9am on working days and during weekends), PTC has not submitted any proposal for alterations.
   
   
4. By determination of 14/12/04 ¹, approval was given to the obligations in the retail narrow band markets applicable to the companies of Grupo PT notified as having significant market power (SMP) in each of these markets, in particular: (i) to ensure transparency through the publication of tariffs, quality of service levels and other conditions of the offer; (ii) to refrain from showing undue preference to specific end users; (iii) cost orientation of prices; (iv) to maintain an analytical accounting system; (v) to maintain separate accounts; and (vi) to maintain affordability.
   
   
5. To ensure affordability and cost orientation, a specific price-cap has been adopted for the residential market, as a way of progressively achieving cost orientation of prices and of transferring efficiency gains to the customer.
   
   
6. Pursuant to the above determination, it was noted that, until ICP-ANACOM establishes modifications to the specific operation of the obligation of price control, the price-cap provided for in the Universal Service Price Convention ² regarding the subscriber mode, of CPI-2.75% would continue to apply to services previously provided for in the same document, that is, the installation of an analogue network line, analogue network line rental and telephone communications in the country.
   
   
7. In 2008, the applicable rate of CPI is 2.5%, as stipulated in the State Budget for this year, whereby the value of applicable price-cap is -0.25%.
   
   
8. Having examined the proposal submitted by PTC, it was concluded that:
   
   a. The weighted variation of the prices resulting from the proposed tariffs of the fixed telephone service applicable on an optional basis upon customer request, as submitted by PTC and with retroactive effect from 01/07/09, is compatible with the applicable price-cap, achieving the average annual change in the basket of -0.27%;
   
   b. With respect to the tariff option to be applicable by default, wheras PTC has not proposed any amendment, it is concluded that the variation of the prices (derived from the impact of tariff change made in 2008) is -0.44%, which is also compatible with the price-cap applicable.
   
   
9. Accordingly, under the powers provided for in points b), d), f) and h) of paragraph 1 of article 6 of the Statutes in annex to Decree-Law No 309/2001 of 7 December and in accordance with paragraph 3 of article 86 of paragraph 1 of article 93 of Law No 5/2004 of 10 February and in accordance with the regulatory objectives set out in points a) and c) of paragraph 1, points  a) and b) of paragraph 2 and point a) of paragraph 4, all of article 5 of the same Law, the Management Board of ICP-ANACOM determined not to oppose the tariff proposal for the residential telephone service at a fixed location within the scope of the universal service, as presented by PTC on 27/10/09, subject to fulfilment of the obligations of transparency which may be undertaken.