2009 Portugal - Telecoms, IP Networks, Digital Media and Forecasts

BuddeComm’s annual 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 Portugal.

Broadband penetration in Portugal remains below the EU average though mobile penetration is among the highest in Europe. Despite competition and an effective LLU regime, Portugal Telecom retains a two-thirds share of the voice market, dominates the DSL market and remains the leading operator in the mobile sector.

In the broadband sector, consumers can expect to benefit from a substantial increase in data speeds in 2010: ZON Multimédia will vastly expand its 100M/s offer while also deploying Europe’s first 1Gb/s FttH service, Fiber Zon. The government has also committed considerable infrastructure funds to develop the fibre sector, having already provided €800 million towards the estimated €2.5 billion national network cost. In common with many EU countries, the government has included broadband development in its economic recovery plans and has undertaken to pass legislation in 2010 aimed at reducing barriers to investment in new networks and ensuring equal access to the new infrastructure.

Portugal’s telecoms market was expected to grow by an average 3% annually for the next two to three years, largely bolstered by the broadband and 3G sectors. The equipment market was expected to have the highest average annual growth rate at about 4%.

Portugal – key telecom parameters – 2008, 2010

(Source: BuddeComm)

Key highlights:

·         Telecom market investment has shown renewed vigour since 2007. Although this was expected to be dampened by the global economic crisis, government stimulus funds earmarked for 2010 and 2011 with help develop the country’s fibre-based All-IP infrastructure.

·         The value of the fixed-line sector will continue to fall in 2010 under the impact of cheaper mobile call rates and the wider use of VoIP. The incumbent’s share of fixed-line traffic and revenue will for the first time fall below 50% in 2010 as operator’s such as Vodafone move into this sector, exploiting their own fixed-line networks as well as consumer adoption of fixed-mobile substitution.

·         In common with EC-wide measures, the 900MHz and 1800MHz bands are expected to be assigned for 3G services in 2010, following longstanding UMTS 900 trials by Vodafone and Optimus. The move will widen wireless broadband availability in remote regions and help fulfil national broadband targets for 2012.

·         Government broadband initiatives aimed at doubling the number of broadband households by the end of 2010 will be bolstered by €1 billion from state funds, which is expected to be matched by a further €1.5 billion from the private sector. These commitments have been complemented by a strong emphasis on fibre-based networks.

Data in this report is the latest available at the time of preparation and may not be for the current year.