2011 Portugal - Telecoms, IP Networks, Digital Media and Forecasts

Publication Overview

This report provides a comprehensive overview of trends and developments in Portugal’s telecoms 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:

Late-2011 multi-band spectrum auction raises €372 million; LTE trials underway across Portugal; TMN launches LTE with 90% population coverage expected by end-2012; mobile data reaches 45TB in 2011; financial constraints putting pressure on consumer spend for high-end telecom services to 2013; regulator extends subsidy programme for DTTV/DTH STBs; analogue broadcasting ends; IPTV subscriber base approaches one million; quarter of households take bundles service; Cogeco sells Cabovisão for €45 million; fibre broadband sector showing strongest growth, accounting for 75% of all new subscribers; PT eliminates special rights granted to the government’s golden shares; AR Telecom exits residential market; regulator’s market data to Q4 2011; operator financial and operational data to end-2011; market developments into 2012.

Companies covered in this report include:

TMN, Optimus, Vodafone, ZON Multimedia, Portugal Telecom, Sonaecom, Cabovisão.

Researcher:- Henry Lancaster
Current publication date: April 2012 (10th Edition)

Executive Summary

Portugal’s fibre sector accounting for 75% of all new broadband subscribers

BuddeComm’s half-yearly publication, Portugal - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecoms and digital media sectors in one of Europe’s smaller but progressive markets. It includes data from the regulator’s 2011 yearbook, market data updates for Q4 2011, telcos’ operational and financial data to end-2011 and market developments into 2012.

Economic conditions

Portugal’s mid-sized telecom market provides one of the highest contributions to GDP in the EU, though this has fallen slightly during the last few years, reflecting the general economic malaise. And the stagnation of the sector country is among those in Europe most affected by the crisis. The government’s high proportion of debt to GDP has jeopardised public-funded telecom infrastructure upgrades and placed a greater burden on the private sector to deliver fibre-based infrastructure. The newly elected government has set budget deficit targets to 2015. Spending cuts required to achieve the fiscal overhaul, which are expected to cause Portugal’s economy to contract by 2% in 2012, will affect growth, consumer spend and business investment.

Telecoms overview

Broadband penetration is below the EU average while mobile penetration is among the highest. The incumbent 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. Market revenue is expected to fall slightly to 2013, in line with lower sector investment, as operators face regulatory burdens compounded by consumers spending less on services. Operators have reported declining revenue for several quarters, and little respite is anticipated in the near future. PT has weathered the times better than competitors on the strength of its subsidiaries in Brazil.

Broadband

Vibrant competition in the broadband sector belies the fact that only four operators have about 94% share of the market by subscribers. The three MNOs also offer mobile broadband through their upgraded mobile networks. The number of broadband lines has grown substantially in recent years, and is expected to reach about 7% in 2012. The impressive fibre sector offers among Europe’s fastest services, with ZON Vodafone and Sonaecom providing 360Mb/s downloads, trumped by PT’s 400Mb/s Meo Fibra offer.

Key telecom parameters – 2010; 2013

Sector

2010

2013 (e)

Subscribers to telecom services (million):

Fixed broadband subscribers

2.07

2.5

Mobile broadband

16.47

17.12

Fixed-line telephony

4.48

4.61

Mobile (SIM cards)

16.47

16.15

Telecom penetration by service:

Fixed broadband

21%

31%

Mobile telephony

155%

164%

Fixed-line telephony

40%

43%

(Source: BuddeComm)

Market Highlights 

  • Data revenue as a proportion of total mobile revenue continues to grow at 2-4% per year following a number of promotional efforts by operators to increase use of data services and promote wireless broadband solutions. The proportion of non-SMS related data services is also increasing.
  • All three MNOs have trialled LTE using 2.6GHz spectrum, a development which will significantly aid broadband connectivity in rural areas in coming years. In March 2012 TMN launched commercial LTE services, offering data at up to 100Mb/s, access to live TV channels through Meo Mobile and to music streaming through MusicBox. The service, was available to about 20% of the population at launch, will reach 90% coverage by the end of 2012 using the company’s 800MHz spectrum allocation.
  • 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.
  • Portugal has developed an effective nationwide strategy for deploying fibre, involving the cooperation of multiple operators, the government, and public subsidies. As a result, FttX in early 2012 accounted to 10.6% of all broadband connections, compared to 6.1% a year earlier.

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.

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview of Portugal’s telecom market
  • 3. Regulatory Environment
    • 3.1 History
    • 3.2 Revised NFR
    • 3.3 Regulatory authority
      • 3.3.1 National Communications Authority
    • 3.4 Telecom sector liberalisation in Portugal
      • 3.4.1 Privatisation of Telecom Portugal
      • 3.4.2 Interconnect
      • 3.4.3 Access
      • 3.4.4 Fibre access
      • 3.4.5 Carrier PreSelection (CPS)
      • 3.4.6 Number Portability (NP)
      • 3.4.7 Wholesale Line Rental (WLR)
  • 4. Fixed Network Market Operators in Portugal
    • 4.1 Overview of operators
    • 4.2 Portugal Telecom
    • 4.3 Oni
    • 4.4 Sonaecom
      • 4.4.1 Novis
    • 4.5 AR Telecom
      • 4.5.1 Jazztel (historic)
    • 4.6 ZON Multimédia
  • 5. Telecommunications Infrastructure
    • 5.1 National telecom network
      • 5.1.1 Next Generation Networks (NGNs)
    • 5.2 International infrastructure
  • 6. Broadband Market
    • 6.1 Overview
      • 6.1.1 Broadband statistics
    • 6.2 Cable modems
      • 6.2.1 ZON Multimédia
      • 6.2.2 Cabovisão
    • 6.3 Asymmetrical Digital Subscriber Line (ADSL)
      • 6.3.1 Portugal Telecom
      • 6.3.2 Sonaecom
      • 6.3.3 ADSL2+
      • 6.3.4 Wholesale
      • 6.3.5 Wholesale prices and retail price difference
    • 6.4 Fibre-to-the-Home (FttH) networks
      • 6.4.1 Sonaecom
      • 6.4.2 ZON Multimédia
      • 6.4.3 Portugal Telecom
      • 6.4.4 Vodafone
    • 6.5 Broadband over Powerline (BPL)
    • 6.6 Mobile broadband
    • 6.7 Wireless broadband
      • 6.7.1 Wireless Local Loop (WLL)
      • 6.7.2 WiFi
  • 7. Digital Media
    • 7.1 Overview
    • 7.2 Key general trends
    • 7.3 Business models
      • 7.3.1 Bundled services
    • 7.4 Digital TV (DTV)
      • 7.4.1 Overview
      • 7.4.2 TV-over-DSL (IPTV)
      • 7.4.3 TV over FttH/B
      • 7.4.4 Cable TV (CATV)
      • 7.4.5 Satellite-based digital pay-TV developments
      • 7.4.6 Digital Terrestrial TV
      • 7.4.7 Free-to-Air (FTA) TV
      • 7.4.8 VoIP services
      • 7.4.9 Video-on-Demand
  • 8. Mobile Communications
    • 8.1 Overview of Portugal’s mobile market
      • 8.1.1 Mobile statistics
    • 8.2 Regulatory issues
      • 8.2.1 Spectrum regulations and spectrum auctions
      • 8.2.2 Roaming
      • 8.2.3 Mobile number portability (MNP)
      • 8.2.4 Mobile termination rates (MTRs)
      • 8.2.5 Network sharing
    • 8.3 Mobile technologies
      • 8.3.1 Digital
      • 8.3.2 Third Generation (3G) mobile
    • 8.4 Major mobile operators
      • 8.4.1 TMN
      • 8.4.2 Vodafone
      • 8.4.3 Optimus
      • 8.4.4 OniWay exits the market
      • 8.4.5 Mobile Virtual Network Operators (MVNOs)
    • 8.5 Mobile voice services
      • 8.5.1 Prepaid
      • 8.5.2 Fixed-mobile convergence (FMC)
    • 8.6 Mobile Messaging
      • 8.6.1 Short Message Service (SMS)
      • 8.6.2 Multimedia Messaging Service (MMS)
    • 8.7 Mobile data services
      • 8.7.1 General Packet Radio Service (GPRS)
      • 8.7.2 Push-to-Talk (PTT)
      • 8.7.3 High-Speed Packet Access (HSPA)
      • 8.7.4 Evolved HSPA (HSPA+)
      • 8.7.5 High-Speed Uplink Packet Access (HSUPA)
      • 8.7.6 Long-term evolution (LTE)
      • 8.7.7 Mobile TV
      • 8.7.8 TETRA (TErrestrial Trunked RAdio)
      • 8.7.9 Mobile content and applications
  • 9. Forecasts
    • 9.1 Forecasts – Broadband subscribers – 2009 - 2012; 2020
      • 9.1.1 Scenario 1 – higher broadband subscriber growth
      • 9.1.2 Scenario 2 – lower broadband subscriber growth
    • 9.2 Forecasts – UMTS subscribers – 2009 - 2012; 2015
    • 9.3 Forecasts – mobile ARPU – 2005 - 2012; 2015
    • 9.4 Notes on scenario forecasts
  • 10. Glossary of Abbreviations
  • Table 1 – Country statistics – 2011 (e)
  • Table 2 – Telecom revenue and investment statistics – 2012 (e)
  • Table 3 – Telephone network statistics – 2011
  • Table 4 – Internet user statistics – 2011
  • Table 5 – Broadband statistics – 2012 (e)
  • Table 6 – Mobile statistics – 2012 (e)
  • Table 7 – National telecommunications authority
  • Table 8 – Telecom market as proportion of GDP – 2006 - 2011
  • Table 9 – Telecom market investment – 2004 - 2012
  • Table 10 – Telecom market value – 2000 - 2012
  • Table 11 – Telecom market value by sector – 2007 - 2009
  • Table 12 – Unbundled loops – 2005 - 2012
  • Table 13 – Number and type of access lines: analogue and digital – 2005 - 2011
  • Table 14 – Portugal Telecom wholesale lines – 2008 - 2011
  • Table 15 – Fixed telephone customers, access type and shared access lines – 2004 - 2011
  • Table 16 – Portugal Telecom’s share of direct access customers – 2005 - 2011
  • Table 17 – Cumulative fixed-line numbers ported – 2003 - 2010
  • Table 18 – Fixed-line revenue, by type – 2007 - 2012
  • Table 19 – Share of fixed-line access installations by operator – 2008 - 2011
  • Table 20 – Portugal Telecom accesses and subscribers by sector – 2008 - 2011
  • Table 21 – Portugal Telecom domestic financial data – 2005 - 2011
  • Table 22 – Portugal Telecom Group financial data – 2010 - 2011
  • Table 23 – Portugal Telecom domestic financial data by segment – 2010 - 2011
  • Table 24 – Sonaecom fixed-line financial data by sector – 2006 - 2011
  • Table 25 – Sonaecom financial data – 2006 - 2011
  • Table 26 – Sonaecom fixed-line subscribers by sector – 2008 - 2011
  • Table 27 – ZON Multimédia subscribers by type – 2007 - 2011
  • Table 28 – ZON Multimédia financial data – 2007 - 2011
  • Table 29 – Fixed lines in service and teledensity – 1999 - 2013
  • Table 30 – Internet subscribers by access type – 2005 - 2011
  • Table 31 – Internet revenue, fixed and mobile – 2008 – 2012
  • Table 32 – Proportion of broadband subscribers by access type – 2007 - 2011
  • Table 33 – Total broadband subscribers by type – 2000 - 2012
  • Table 34 – Broadband subscriber annual change year-on-year – 2002 - 2013
  • Table 35 – Broadband penetration by sector – 2007 - 2011
  • Table 36 – Share of broadband accesses by operator – 2008 - 2011
  • Table 37 – Fixed-line broadband traffic – 2008 - 2013
  • Table 38 – Fixed-line and mobile broadband traffic per month per customer – 2008 - 2011
  • Table 39 – Proportion of broadband subscribers by date rate – 2010 - 2011
  • Table 40 – Share of cable broadband accesses by operator – 2003 - 2011
  • Table 41 – ZON Multimédia cable broadband subscribers – 2004 - 2011
  • Table 42 – Portugal Telecom DSL broadband subscribers – 2006 - 2011
  • Table 43 – Sonaecom broadband subscribers – 2008 - 2011
  • Table 44 – Sonaecom equipped exchanges – 2008 - 2011
  • Table 45 – Portugal Telecom wholesale accesses – 2004 - 2011
  • Table 46 – FttX subscribers – 2008 - 2011
  • Table 47 – Mobile broadband subscribers – 2007 - 2011
  • Table 48 – Share of mobile broadband subscribers by operator – 2010 - 2011
  • Table 49 – Mobile broadband traffic – 2009 - 2013
  • Table 50 – Broadcasting operational statistics – 2008 - 2011
  • Table 51 – Penetration of TV subscribers by type – 2008 - 2011
  • Table 52 – Subscribers to bundled services – 2007 - 2011
  • Table 53 – Population take-up of bundled services by type – 2008 - 2011
  • Table 54 – Bundled services revenue by type – 2008 – 2010
  • Table 55 – Bundled service subscribers by offer – 2009 - 2012
  • Table 56 – ZON Multimédia triple play subscribers – 2007 - 2011
  • Table 57 – Subscription TV revenue by type and bundle– 2009 - 2010
  • Table 58 – Portugal Telecom pay-TV subscribers – 2008 - 2011
  • Table 59 – FttH/B IPTV subscribers – 2009 - 2011
  • Table 60 – TV subscriber share by operator – 2004 - 2011
  • Table 61 – CATV subscribers and households – 2008 - 2013
  • Table 62 – ZON Multimédia financial data – 2007 - 2011
  • Table 63 – ZON Multimédia cable and TV subscribers – 2007 - 2011
  • Table 64 – Satellite TV subscriber households – 1998 - 2013
  • Table 65 – VoIP subscribers – 2010 - 2013
  • Table 66 – Nomadic VoIP subscribers – 2006 - 2013
  • Table 67 – Mobile operators, subscribers and annual change – 2011
  • Table 68 – Mobile subscribers and SIM penetration rate (regulator data) – 1999 - 2013
  • Table 69 – Mobile operators’ market share – 2004 - 2011
  • Table 70 – 3 G subscribers by type – 2009 - 2012
  • Table 71 – Multiband auction results – 2012
  • Table 72 – Roaming in call traffic volume and messages – 2003 - 2011
  • Table 73 – European roaming charges – 2007 - 2011
  • Table 74 – Cumulative ported mobile numbers – 2004 - 2010
  • Table 75 – MTRs – 2009 - 2012
  • Table 76 – 3G video calls and traffic data – 2007 - 2011
  • Table 77 – 3G subscribers – 2007 - 2012
  • Table 78 – TMN ARPU and data percentage – 2006 - 2011
  • Table 79 – TMN subscribers – 2006 - 2011
  • Table 80 – TMN financial data – 2006 - 2011
  • Table 81 – TMN mobile revenue – 2010 - 2011
  • Table 82 – Vodafone Portugal subscribers – 2006 - 2011
  • Table 83 – Vodafone Portugal subscribers, proportion prepaid – 2006 - 2011
  • Table 84 – Vodafone monthly ARPU: prepaid, contract and blended – 2005 - 2011
  • Table 85 – Vodafone financial data – 2007 - 2011
  • Table 86 – Optimus mobile subscribers – 2003 - 2011
  • Table 87 – Optimus operational statistics – 2006 - 2011
  • Table 88 – Optimus EBITDA, capex – 2006 - 2011
  • Table 89 – Optimus revenue by type – 2006 - 2011
  • Table 90 – Mobile prepaid subscribers, proportion prepaid – 2003 - 2011
  • Table 91 – SMS messages sent annually and annual change – 2004 - 2011
  • Table 92 – MMS sessions – 2007 - 2012
  • Table 93 – MMS messages sent – 2010 - 2012
  • Table 94 – Mobile internet sessions and traffic – 2007 - 2011
  • Table 95 – Mobile TV sessions and traffic – 2010 - 2011
  • Table 96 – Mobile TV subscribers – 2010 - 2011
  • Table 97 – Forecast broadband subscribers – higher market growth scenario – 2010 - 2013; 2020
  • Table 98 – Forecast broadband subscribers – lower market growth scenario – 2010 - 2013; 2020
  • Table 99 – Forecast UMTS subscribers – 2009 - 2012; 2015
  • Table 100 – Forecast monthly mobile ARPU – 2005 - 2012; 2015
  • Chart 1 – Portugal Telecom wholesale lines – 2008 - 2011
  • Chart 2 – Fixed-line revenue, by type – 2007 - 2012
  • Chart 3 – Portugal Telecom financial data – 2005 - 2011
  • Chart 4 – Sonaecom fixed-line financial data by sector – 2006 – 2011
  • Chart 5 – Sonaecom financial data – 2006 – 2011
  • Chart 6 – Sonaecom fixed-line subscribers by sector – 2008 - 2011
  • Chart 7 – ZON Multimédia subscribers by type – 2007 – 2011
  • Chart 8 – ZON Multimédia financial data – 2007 - 2011
  • Chart 9 – Fixed lines in service and teledensity – 2003 – 2013
  • Chart 10 - Internet subscribers by access type – 2005 - 2011
  • Chart 11 – Proportion of broadband subscribers by access type – 2007 - 2011
  • Chart 12 – Total broadband subscribers by type – 2002 – 2012
  • Chart 13 – Portugal Telecom wholesale accesses – 2004 – 2011
  • Chart 14 – FttX subscribers – 2008 - 2011
  • Chart 15 – Mobile broadband subscribers – 2007 - 2011
  • Chart 16 – Share of mobile broadband subscribers by operator– 2010 - 2011
  • Chart 17 – Subscribers to bundled services – 2007 - 2011
  • Chart 18 – Population uptake of bundled services by type – 2008 - 2011
  • Chart 19 – ZON Multimédia triple-play subscribers – 2007 - 2011
  • Chart 20 – ZON Multimédia financial data – 2007 - 2011
  • Chart 21 – Mobile subscribers and SIM penetration rate (regulator data) – 1999 - 2013
  • Chart 22 – Mobile operators’ market share – 2004 - 2011
  • Chart 23 – Roaming in call traffic volume and messages – 2003 - 2011
  • Chart 24 – 3G video calls and traffic data – 2007 - 2011
  • Chart 25 – 3G subscribers – 2007 - 2012
  • Chart 26 – TMN financial data – 2006 - 2011
  • Chart 27 – Vodafone monthly ARPU: prepaid, contract and blended – 2005 - 2011
  • Chart 28 – Vodafone financial data (year to Mar) – 2007 - 2011
  • Chart 29 – Optimus EBITDA, capex – 2006 – 2011
  • Chart 30 – Optimus revenue by type – 2006 – 2011
  • Chart 31 – Mobile prepaid subscribers, proportion prepaid – 2003 – 2011
  • Chart 32 – SMS messages sent annually and annual change – 2004 – 2011
  • Chart 33 – Mobile Internet sessions and traffic – 2007 – 2011
  • Exhibit 1 – EU – The New Regulatory Framework (NRF)
  • Exhibit 2 – Access and the local loop
  • Exhibit 3 – Overview of digital media

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