Competition Authority publishes 2008 Annual Monitoring Report on the Electronic Communications Markets

The Competition Authority (CA) has concluded the third edition of the Annual Monitoring Report on the Electronic Communications Markets, which covers the year 2008. It assesses the development of competition in the market for broadband Internet access, mobile voice communications and land-line voice communications, in Portugal. With respect to the fixed broadband Internet service, in January 2009 Portugal had a limited rate of penetration (16.5%) in comparison to the average rate of penetration in other EU15 Member States. This lag, however, may be compensated by the high growth rates in the mobile broadband Internet service in Portugal, which, between the first quarter of 2008 and the first quarter of 2009, recorded an increase of 57% in the number of users and, in January 2009, had a penetration rate of 12.1%. Following the spin-off of PT – Multimédia, Serviços de Telecomunicações e Multimédia SGPS SA (now ZON Multimédia – Serviços de Telecomunicações e Multimédia SGPS SA) from Portugal Telecom SGPS SA on 7 November 2007, the incumbent operator's share of the retail broadband market in Portugal decreased significantly. The new entrants, as a whole, attained a 59% market share, in contrast to what was still the case with the average for the combined market share in other EU15 Member States, which was still below 50%.

In Portugal, in 2008, the monthly prices for Internet access for velocities between 2 Mbps and 4 Mbps and between 4 Mbps and 8 Mbps (the most frequent speeds in this country) were higher than in the other countries.

For mobile voice communications, although Portugal had a high market concentration in 2008 (a C2The index of concentration C2 corresponds to the sum of the two largest undertakings' market shares. 3_ de 3_ of 83% as against an average of 72% for other EU15 Member States), it registered the highest rate of penetration in the group of countries selected (137%). The price of on-net calls for prepaid plans, those most often purchased in Portugal (78% of subscribers), was below the average price in other EU15 Member States in the third quarter of 2008. In 2007, the last year for which data is available, the fixed telephone service (FTS) in Portugal presented a limited rate of penetration, corresponding to 39.5 lines per 100 inhabitants. In 2008, the incumbent operator's market share for all types of FTS calls was around 69%, a pronounced decline since 2004 (when it registered a value of 88%). In comparison to the average prices in other EU15 Member States, prices for FTS calls in Portugal in 2008 were slightly higher (3% for local calls and 1% for national calls). Furthermore, the price of packages was lower than the average for medium and large users (-5% and -4% respectively) and Small Office Home Office (SOHO) users (-1%), and above the average for light users and SMEs (small and medium-sized enterprises) (1% and 10%, respectively). To sum up, the situation in 2008 on the retail broadband market was less favourable than that for fixed and mobile communications. Nevertheless, in the short-to-medium term, the recent spin-off carried out on the market may have a positive impact on competition. Finally, it should be noted that, in addition to a summary description of the most recent developments in this sector in Portugal, the report contains a synopsis of Competition Authority activity related to the electronic communications sector, in particular in terms of administrative-law cases, mergers between undertakings, and institutional cooperation with the sectoral regulator, ICP-ANACOM (Portuguese Institute of Communications - National Communications Authority).

The report was produced under the supervisory powers conferred on the Authority and is available at its website, www.concorrencia.pt

(Nº: 13/2009)