Publication Overview
This report provides a comprehensive overview of trends and developments in Portugal’s telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure;
- Major players, revenues, subscribers, ARPU, MoU;
- Internet, VoIP, IPTV;
- Mobile voice and data markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and digital media;
- 3G subscriber and mobile ARPU forecasts to 2015;
- Broadband market forecasts for selective years to 2020.
Key developments:
Fibre sector showing strongest growth in broadband market, accounting for 75% of all new subscribers; spectrum auction expected to raise €450 million; LTE trials underway across Portugal; mobile TV traffic doubles in 2010; mobile data may reach 45TB in 2011; IPTV subscriber base approaches one million; quarter of households take bundled service; PT eliminates special rights granted to the government’s golden shares; financial constraints putting pressure on consumer spend for high-end telecom services to 2013; regulator’s market data for 2010 and data update for Q2 1011; operator data to June 2011.
Companies covered in this report include:
TMN, Optimus, Vodafone, ZON Multimedia, Portugal Telecom, Sonaecom, Cabovisão.
Researcher:- Henry Lancaster
Current publication date:- October 2011 (10th Edition)
Executive Summary
Portugal’s broadband growth rests on fibre sector
BuddeComm’s biannual publication, Portugal - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s smaller but progressive markets. It includes the regulator’s 2010 annual market data report and market updates for Q2 2011 as well as operator data to the June 2011.
Portugal’s mid-sized telecom market has one of the highest contributions to GDP in the EU, indicative of the importance placed on the country’s telecom sector. The country has been among the most affected by the general economic crisis: the government’s debt reached €128 billion by early 2011 while debt as a percentage of GDP reached above 76% (above the EU recommended maximum of 60%).
The collapse of the government in early 2011 was significant for Portugal’s economic bailout: the country rejected an austerity package intended to reduce debt and increased borrowing costs effectively priced Portugal out of the international money markets. As a result, the ECB and IMF provided Portugal with a €78 billion bail-out. As part of the terms, the new government has pledged to meet fiscal targets and undertake reform deadlines early in a bid to gain credibility with investors and allow the country to resume financing its debt by 2013. The government has set a target of cutting the budget deficit from 9.1% of GDP in 2010 to 0.5% by 2015. The package also requires the government to reform its healthcare and public administrations, freeze public sector wages and pensions until the end of 2013, reduce the number of civil servants by 1% in both 2012 and 2013, and overhaul the labour market. Existing tax benefits and incentives will be frozen or cut, while the State will sell off its stakes in a number of key companies. The spending cuts required to achieve the fiscal overhaul, which are expected to cause Portugal’s economy to contract by 2% in 2011 and a further 2% in 2012, will affect growth, consumer spend and business investment.
In telecoms, broadband penetration remains below the EU average while mobile penetration is among the highest in Europe. The incumbent operator, Portugal Telecom, has seen its share of the total traffic market (voice and internet) gradually fall in the face of competition, though it retains a dominant share in both the voice and DSL markets. Portugal Telecom is also the leading operator in the mobile sector. Its subsidiary cable TV (CATV) division, PT Multimédia (PTM) was sold in 2007 following the failed takeover bid from the Sonae Group earlier in the year. PTM was renamed as ZON Multimédia in early 2008 and controls about 70% of the CATV market.
In the broadband market, competition through regulatory intervention on LLU have led to price fall s for consumers in recent years. Data speeds have also increased substantially, while ZON in late 2009 introduced Europe’s first 1Gb/s FttH service. The overall financial restrictions have made it difficult for the government to guarantee public funding for telecom infrastructure upgrades, and so during the next few years such upgrades, particularly in fibre, will be focussed on the cash-strapped private sector. Although this could delay network rollout, and leave rural areas with a poorer service, at least initially, some important measures have been taken regarding the legal framework for deploying NGA networks, including in-building infrastructure, access obligations to public utilities’ infrastructure, reinforced rights of way and the promotion of public and private investment. As a result, several operators have invested in fibre networks using shared infrastructure, and by mid-2011 more than four million households had access to fibre-based services.
Portugal’s telecoms market was expected to grow by an average 3% annually to the end of the decade, largely bolstered by the broadband and 3G sectors. The equipment market was expected to have the highest average annual growth rate at about 4%. Voice services, which currently represent the largest market share, will continue to drop by about 0.5% annually.
Key telecom parameters – 2010; 2012
|
Sector
|
2010
|
2012 (e)
|
|
Subscribers to telecom services:
|
|
Fixed broadband subscribers (million)
|
2.07
|
2.34
|
|
Fixed-line telephony (million)
|
4.48
|
4.57
|
|
Mobile broadband connections (million)
|
16.47
|
16.15
|
|
Telecom penetration by service:
|
|
Fixed broadband
|
21%
|
27%
|
|
Mobile telephony
|
155%
|
150%
|
|
Fixed-line telephony
|
40%
|
43%
|
(Source: BuddeComm)
Market Highlights
- The underdeveloped mobile content and applications market holds significant growth potential in coming years: mobile content and application usage is growing rapidly while data revenue as a proportion of total mobile revenue is expected to grow at 2-4% annually for the next few years following a number of promotional efforts by operators to increase use of data services and broadband solutions. The proportion of non-SMS related data services is also increasing.
- All three MNOs have trialled LTE using 2.6GHz spectrum, achieving download speeds of up to 150Mb/s. The development will significantly aid broadband connectivity in rural areas in coming years.
- Portugal’s market for bundled services and IP broadcasting has a strong base in the country’s broadband network: triple and quad play has become increasingly popular during the last two years as operators’ investment in infrastructure upgrades bear fruit and customers take advantage of faster bandwidth, single billing convenience and cheaper prices resulting from greater competition. In mid-2011 there were 13 providers of bundled services, and more than 2.2 million subscribers to services.
- Portugal is one of the few countries in Europe to develop an effective nationwide strategy for deploying fibre: with more than five million homes expected to be passed by the end of 2011 the number of subscribers will grow more rapidly during the next few years as existing contracts with cable and DSL subscribers expire.
This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Portugal. It provides further information on:
- Market liberalisation and regulatory issues;
- The impact of the global economic crisis;
- Telecoms operators – privatisation, acquisitions, new licences;
- Mobile data market developments in coming years in light of spectrum auctions and new license awards;
- 3G developments, regulatory issues and technologies including HSPA and LTE;
- Broadband migration to an FttH architecture;
- Historical and current subscriber statistics and forecasts;
- ARPU statistics and forecasts
Data in this report is the latest available at the time of preparation and may not be for the current year.
