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Portugal - Telecoms, IP Networks, Digital Media and Forecasts


Attention: There is an updated edition available for this report.

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


Portugal’s ASO in early 2012 paves way for sub-GHz mobile broadbandBuddeComm’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.

Portugal has a mid-sized telecom market, with one of the highest contributions to gross domestic product in the European Union, though this fell from 5.1% in 2003 to 4.7% in 2007 before climbing to 4.8% in 2009. The country is among those in Europe most affected by the global financial crisis.

By late 2010 the government’s deficit had reached €15.7 billion, while government debt was some €127.9 billion and debt as a percentage of GDP reached above 76%, far above the EU’s recommended maximum of 60% of GDP.

These figures have made it difficult for the government to guarantee its pledges to commit public funds to telecom infrastructure upgrades, and so during the next few years such upgrades, particularly in the fibre sector, may have to lean more heavily on the cash-strapped private sector. This could delay network rollout, and leave rural areas with a poorer service.

Broadband penetration is below the EU average while mobile penetration is among the highest in Europe. The incumbent, Portugal Telecom, has seen its share of the voice and DSL markets fall during the last few years as pressure from competitors mounts, though it remains the dominant player by a considerable margin.

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. Renamed as ZON Multimédia in early 2008, the operator controls about 70% of the CATV market.

In the broadband market, new entrants have been able to launch competitive offers based on LLU, which has grown considerably since 2005. As the direct result of competition through regulatory intervention on LLU, end-prices for consumers have fallen significantly in recent years while data speeds have increased substantially: in late 2009 ZON introduced Europe’s first 1Gb/s FttH service.

Several operators are investing in fibre and upgrading cable networks, and by mid-2010 more than three million households had access to high-speed broadband services. In addition, some important measures have been taken regarding the legal framework for deploying Next Generation Access (NGA) networks, including in-building infrastructure, access obligations to public utilities’ infrastructure, reinforced rights of way and the promotion of public and private investment. The provision of a broadband universal service obligation (USO), pending for several years, was reviewed by the government during 2010.

Investment in the telecom sector has slumped since the high of 2007, when operators addressed upgrades to fixed-networks with EuroDOCSIS3.0 and fibre technologies while MNOs concentrated on software upgrades to provide data services based on HSPA+ and LTE. The economic crisis, which saw investment falter, continues to provide a break to telcos’ commitments and no respite is anticipated for the next two to three years.

Similarly, sector revenue, which reached €7.7 billion in 2008, has been affected by ongoing economic conditions and may fall to about €7.1 billion in 2011. The knock-on effects for telcos as a result of regulated tariffs concerned with MTRs, voice and data roaming and wholesale access charges, compounded by consumer reluctance to spend on other than essential services, will further inhibit their ability to upgrade networks. In addition, the government, itself strapped for cash, has been pressed by the EC to curtail its expenditure, and so avoid the bail-outs thus far found necessary for Greece and Ireland.

Key telecom parameters - 2009; 2011

Sector 2009 2011 (e)

Broadband:

Fixed broadband subscribers (million) 1.86 2.12

Fixed broadband penetration rate 18% 23%

Mobile broadband subscribers (million) 2.17 3.60

Subscribers to telecoms services:

Fixed-line telephony (million) 2.06 1.87

Mobile phone (million) 4.2 4.2

Mobile penetration (population) 149% 157%

(Source: BuddeComm)

Market highlights:

ADSL is the principal broadband access technology, representing 54% of all fixed-line accesses in mid-2010, while cable accounts for 41% of broadband subscribers. Further competition has arisen from players not normally associated with broadband, among them Vodafone which by mid-2010 had about a quarter of the overall telecoms market by revenue.The triopoly of MNOs offer their own low-cost brands to tap into the important no-frills sector. Despite the regulator having studied the competition effect which low-cost operations have the market since 2005, the MVNO model has been slow to develop, with only two serious players - the postal company Correios de Portugal (CTT), which markets its services through 1,000 post offices across the country, and ZON Multimédia.Data revenue as a proportion of total mobile revenue continues to grow at 2%-4% per year following a number of promotional efforts by MNOs to increase use of data services. The proportion of non-SMS related data services is also increasing. Mobile data traffic increased from about 5TB in 2005 to an estimated 28TB in 2010. Continued growth, resting on the back of anticipated LTE networks from 2011 or 2012, may push traffic to about 50TB by 2012.Portugal has emerged as one of the few countries in Europe to develop an effective nationwide strategy for deploying fibre, involving the cooperation of multiple operators, the government, and public subsidies. ZON, PT and Sonaecom are the principal operators. The number of broadband connections based on FttX grew 44% in the second quarter of 2010 (quarter-on-quarter). By mid-2010 fibre represented about 4% of all broadband connections, and attracted 53% of new subscriptions. By 2012 fibre may account for 10%-15% of all broadband connections, and the expense of the DSL sector.The regulator’s final decision on ASO will see the process completed in three phases during the first four months of 2012. Released spectrum has yet to be allocated, but is likely to be used for mobile broadband services, in common with developments elsewhere in Europe.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 licence awards in 2010;

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.

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 Carrier PreSelection (CPS)
3.4.5 Number Portability (NP)
3.4.6 Wholesale Line Rental (WLR)
4. Fixed Network Operators
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 Convergence
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 Cable TV (CATV)
7.4.4 Satellite-based digital pay-TV developments
7.4.5 Digital Terrestrial TV
7.4.6 Free-to-Air (FTA) TV
7.4.7 VoIP services
7.4.8 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)
8.3 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
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 - 2009 - 2010; 2015
10. Glossary of Abbreviations
List of Tables, Charts and Exhibits
Table 1 - Country statistics Portugal - 2010
Table 2 - Telecom revenue and investment statistics - 2009
Table 3 - Telephone network statistics - June 2010
Table 4 - Internet user statistics - June 2010
Table 5 - Broadband statistics - June 2010
Table 6 - Mobile statistics - June 2010
Table 7 - National telecommunications authority
Table 8 - Telecom market as proportion of GDP - 2005 - 2009
Table 9 - Telecom market investment by sector - 2007 - 2008
Table 10 - Unbundled loops and access lines - 2005 - 2009
Table 11 - Number and type of access lines: analogue and digital - 2005 - 2010
Table 12 - LLU, shared access price - connection and monthly rental - 2006 - 2009
Table 13 - Fixed telephone customers, access type and shared access lines - 2004 - 2010
Table 14 - Share of fixed-line access installations by operator - 2007 - 2010
Table 15 - Portugal Telecom accesses and subscribers by sector - 2007 - 2010
Table 16 - Sonaecom financial data and annual change - 2006 - 2010
Table 17 - ZON Multimédia subscribers by type - 2007 - 2010
Table 18 - Fixed lines in service and teledensity - 1999 - 2010
Table 19 - Proportion of broadband subscribers by access type - 2007 - 2010
Table 20 - Broadband subscribers by operator type - 2007 - 2009
Table 21 - Total broadband subscribers by type and penetration rate - 2000 - 2010
Table 22 - Broadband subscriber annual change year-on-year - 2002 - 2010
Table 23 - Broadband penetration by sector - 2007 - 2010
Table 24 - Share of broadband accesses by operator - 2007 - 2010
Table 25 - Fixed-line broadband traffic in Terabytes - 2009 - 2011
Table 26 - Fixed-line and mobile broadband traffic per month per customer - 2008 - 2010
Table 27 - Share of cable broadband accesses by operator - 2003 - 2010
Table 28 - Sonaecom equipped exchanges - 2008 - 2010
Table 29 - Mobile broadband subscribers by type - 2008 - 2010
Table 30 - Mobile broadband traffic - 2009 - 2010
Table 31 - Broadcasting operational statistics - 2007 - 2010
Table 32 - Proportion of TV subscribers by type - 2007 - 2010
Table 33 - Proportion of subscriber by bundled service - 2009
Table 34 - Market share of bundles service subscribers by operator- 2009
Table 35 - TV subscriber share by operator - 2004 - 2010
Table 36 - Cable TV households and subscribers - 2009 - 2010
Table 37 - ZON Multimédia financial data - 2007 - 2010
Table 38 - ZON Multimédia subscribers by type - 2007 - 2010
Table 39 - Mobile operators, subscribers and annual change - June 2010
Table 40 - MTRs - 2009 - 2011
Table 41 - TMN ARPU and data percentage - 2006 - 2010
Table 42 - Vodafone Portugal subscribers, proportion prepaid - 2006 - 2010
Table 43 - Optimus operational statistics - 2006 - 2010
Table 44 - Optimus financial data and annual change - 2006 - 2010
Table 45 - Mobile subscribers, proportion prepaid - 2003 - 2010
Table 46 - SMS messages sent annually and annual change - 2004 - 2010
Table 47 - Mobile Internet sessions and traffic - 2007 - 2010
Table 48 - Forecast broadband subscribers - higher market growth scenario - 2009 - 2012; 2020
Table 49 - Forecast broadband subscribers - lower market growth scenario - 2009 - 2012; 2020
Chart 1 - Telecom market investment - 2004 - 2011
Chart 2 - Telecom market value - 2000 - 2011
Chart 3 - Telecom market value by sector - 2007 - 2009
Chart 4 - Portugal Telecom wholesale lines - 2008 - 2010
Chart 5 - Portugal Telecom’s share of direct access customers - 2005 - 2010
Chart 7 - Fixed-line revenue - 2007 - 2010
Chart 8 - Portugal Telecom financial data - 2005 - 2010
Chart 9 - Sonaecom fixed-line subscribers by sector - 2008 - 2010
Chart 10 - ZON Multimédia financial data - 2007 - 2010
Chart 11 - Internet subscribers by access type - 2005 - 2010
Chart 12 - Proportion of broadband subscribers by access type - 2007 - 2010
Chart 13 - ZON Multimédia cable broadband subscribers - 2004 - 2010
Chart 14 - Portugal Telecom DSL broadband subscribers - 2006 - 2010
Chart 15 - Sonaecom broadband subscribers - 2008 - 2010
Chart 16 - Portugal Telecom wholesale accesses - 2006 - 2010
Chart 17 - FttX subscribers - 2008 - 2010
Chart 18 - Mobile broadband subscribers - 2007 - 2010
Chart 19 - Share of mobile broadband subscribers by operator- June 2010
Chart 20 - Subscribers to bundled services - 2007 - 2010
Chart 21 - Population uptake of bundled services by type - 2008 - 2010
Chart 22 - ZON Multimédia triple-play subscribers - 2007 - 2010
Chart 23 - Portugal Telecom IPTV subscribers - 2008 - 2010
Chart 24 - Satellite TV subscriber households - 2003 - 2011
Chart 25 - VoIP subscribers - 2006 - 2011
Chart 26 - Mobile subscribers and SIM penetration rate (regulator data) - 2002 - 2011
Chart 27 - Mobile operators’ market share - 2004 - 2010
Chart 28 - Roaming in call traffic volume and messages - 2004 - 2010
Chart 29 - European roaming charges - 2007 - 2011
Chart 30 - Cumulative ported mobile numbers - 2004 - 2010
Chart 31 - 3G video calls and traffic data - 2007 - 2010
Chart 32 - 3G subscribers - 2007 - 2010
Chart 33 - TMN subscribers - 2007 - 2010
Chart 34 - TMN financial data - 2006 - 2010
Chart 35 - Vodafone Portugal subscribers - 2006 - 2010
Chart 36 - Vodafone monthly ARPU: prepaid, contract and blended - 2005 - 2010
Chart 37 - Vodafone financial data (year to Mar) - 2007 - 2010
Chart 38 - Optimus mobile subscribers - 2003 - 2010
Chart 39 - Mobile subscribers, contract and prepaid - 2003 - 2010
Chart 40 - MMS sessions - 2007 - 2010
Chart 41 - Forecast UMTS subscribers - 2009 - 2012; 2015
Chart 42 - Forecast mobile monthly ARPU - 2009 - 2010; 2015
Exhibit 1 - EU - The New Regulatory Framework (NRF)
Exhibit 2 - Access and the local loop
Exhibit 3 - Overview of media convergence

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