2016 Portugal - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Portugal Telecom to replace copper network with FttP by 2020

Portugal has a medium-sized telecom market with a strong mobile sector and a growing broadband customer base focussed on the delivery of fibre-based services. The country’s difficult economic circumstances have seen operators’ domestic revenue fall in recent quarters. This prompted considerable ownership changes among market operators. Cogeco sold the flagging Cabovisão in early 2012 for a considerable loss, while Sonaecom’s Optimus division was merged with Zon Multimédia in mid-2013, becoming Zon Optimus before being rebranded as NOS in 2014. The incumbent Portugal Telecom, following a poorly managed link up with the Brazilian telco Oi and a disastrous investment in a failed bank, was sold to Altice Group, a deal which also saw Altice obliged to sell the cableco Cabovisão as well as Oni Telecom.

Portugal’s broadband penetration was for some years considerably lower than the European average, though the joint efforts of the regulator and the key market operators have resulted in significant infrastructure upgrades and an emphasis on fibre-based services. Cable has showed strong growth in recent years, partly through the efforts of the rebranded dominant operator NOS (formerly Zon Optimus). DSL is no longer the dominant platform for broadband connections, as customers are migrated to fibre networks being built by Portugal Telecom and other major players.

Despite some consolidation among players in recent years, the Portuguese mobile market remains dominated by the incumbent, operating as Meo, and by Vodafone and NOS. With near universal 3G coverage, during the last two years most investment has been directed to LTE and to incremental upgrades to network infrastructure. Meo was the first operator to launch commercial LTE services, in early 2012. The MVNO market remains undeveloped, though network operators have their own low-cost brands.

Portugal has seen considerable development in the converged services market. The main cableco is NOS, which was formed from the merger of Zon Multimédia with Sonaecom’s subsidiary Optimus, becoming Zon Optimus before the rebranding to NOS in May 2014. The digital TV platform in Portugal was completed in April 2012. Although there are few DTTV channels available, since late 2015 the regulator has endeavoured to switch to a Multi Frequency Network which will enable at least six additional channels to be carried.

This report introduces the major elements of the Portuguese telecom market, presenting statistics on the fixed telephony sector as well as an analysis of the major market players. Additional information is provided on the key regulatory issues, noting the status of interconnection, local loop unbundling, number portability and carrier preselection. The report also covers the mobile market, providing financial and operating statistics for network operators, as well as an assessment of mobile voice and data services. In addition the report covers the broadband and digital media sectors, including developments in fibre networks, videostreaming and bundled service offerings.

Key developments:

• New cable to link Portugal with Brazil;
• Portugal Telecom announces plan to replace copper network with FttP by 2020;
• Zon Optimus rebrands as NOS;
• AR Telecom exits residential market;
• Altice sells Cabovisão and Oni Telecom;
• PT ramps up fibre roll out, aiming for 5.3 million connected premises;
• Vodafone’s fibre network to cover two-thirds of premises by end-2016;
• Vodafone achieves 450Mb/s downlink speeds in LTE-A trials, provides 90% LTE population coverage;
• Decline in SMS traffic in wake of messaging alternatives;
• Regulator extends subsidy program for DTTV/DTH STBs;
• Portugal adopts Multi Frequency Network (MFN) to resolve DTT reception problems;
• Report update includes the regulator’s market data to Q4 2015, telcos’ operating and financial data to Q4 2015, recent market developments.

Companies mentioned in this report:

Meo (TMN, Portugal Telecom), NOS (Zon Optimus, Zon Multimédia), Vodafone, Sonaecom, Cabovisão), CTT, Lycamobile.