1. Investment costs

(a) Information on the whole of fixed assets (tangible and intangible)

According to MEO, in the scope of the CAS, costs concerning fixed assets were allocated to the DTT service in two different ways, taking into account the establishment of roughly clear correlations between identified costs and the costing object, fixed assets of the DTT product being classified as:

• Specific goods allocated directly to the DTT product
   
  Values of specific fixed assets identified by MEO and engaged to the DTT service are summarised in Table 27, Table 28 and Table 29¹, in Appendix 1, having MEO submitted an electronic file with detailed information.
• Goods allocated to the DTT product via allocation driver
   
  As regards this second category of fixed asset costs (goods allocated to the DTT product via allocation driver), MEO presented Table 33 (in Appendix 1), which identifies the value of depreciations and the cost of capital allocated to the DTT products, as well as the identification of the respective pseudo-department or pool of costs, as well as the allocation driver.

MEO further refers that there is a set of fixed asset costs that are engaged to the DTT product trough the allocation of other activities, namely those associated to drivers concerning staff or activities allocated to a set of other activities (recursive), which have not been discriminated. According to MEO, this option does not call into question at all the intended analysis, given the low representativeness of these costs, as well their high scattering in MEO’s CAS at the level of resources and activities.

In addition to fixed assets identified earlier, and which, according to MEO, were duly allocated to the DTT service in the scope of CAS, MEO identifies a set of specific investments which were incorrectly allocated to the ATT product, and which should have been allocated to the DTT product, which were summarized in Table 30, Table 31 and Table 32², in Appendix 1 (detailed information for identified goods were also sent in an electronic file by MEO).

In brief, the total of depreciations and cost of capital of the DTT service, for 2010, 2011 and 2012, identified by MEO in the electronic file submitted, is as follows:

Values in Euros
[ECI]

(b) Costs and revenues associated to subsidy and co-payment programmes, and the way they are considered in the CAS

According to MEO, amounts allocated under subsidy and DTH co-payment programmes are considered as investment, and registered, at accounting level, as fixed assets. Consequently, MEO informs that CAS results include the annual cost with depreciations and cost of capital for these programmes.

According to MEO, the total value assigned between 2011 and 2013 amounted to 3.5 million Euros, with the following breakdown³:

Values in Euros
[ECI]

According to MEO, total values registered in general accounting and that are reflected in the DTT product in the CAS are shown in the table below, having been detected negligible differences (0.2%) between values presented above and those included in MEO’s CAS for 2011 and 2012, but which, nonetheless, in its view, do not misrepresent the reality intended to be portrayed.

Values in Euros
[ECI]

Still according to MEO, both revenues of terminal equipment sold to final users, and respective costs of such equipment (known as cost of sales) whether or not they have been subsidized, are not engaged to the DTT service, but to the equipment sales product.

This means that the DTT product only covers amounts assigned under subsidy and DTH co-payment programmes, which are considered by MEO as investments made in the scope of DTT, and registered, at accounting level, as associated fixed assets.

After ANACOM enquired as to why MEO considered such costs to be investment costs and not operating costs, and which depreciation rules, including useful life periods, applied, MEO clarified that:

(a) Taking into account the provision laid down in the accounting and financial report standard (NCRF 6)⁸, the overall amount of commitments undertaken in the scope of rights of use for DTT frequencies⁹ were registered in financial statements as an intangible asset;

(b) This intangible asset is being amortised by MEO on the basis of the straight-line method, over a 30-year depreciation period, which was defined taking into account the provision in NCRF 6, namely point 93 thereof.