Adaptation of the methodology for calculation of CLSU borne by MEO as USP of the component of provision of connection to a public communications network at a fixed location and of publicly available telephone services between 1 January and 31 May 2014, and AS USP of the component of the provision of public pay-phones between 1 January and 8 April 2014
The adaptation of the methodology for calculation of CLSU borne by MEO as USP of the component of provision of connection to a public communications network at a fixed location and of publicly available telephone services between 1 January and 31 May 2014, and as USP of the component of the provision of public pay-phones between 1 January and 8 April 2014, consists in the application of the following steps:
1st step:
Establishment of profitable and unprofitable areas and the net cost of the latter areas up to 31 May 2014, MEO being assumed as the USP for both components under consideration (FTS and PPP) up to that date and in the conditions in force prior to the tender designation of a new USP.
2nd step:
Determination of CLSU, obtained separately for each of the CLSU components: FTS and PPP.
This calculation must adopt the following procedures:
a) Unprofitable areas
In unprofitable areas determined by the area model, net costs are calculated in separate for each of the components (FTS and PPP).
For the purpose, the establishment of the FTS component must not consider revenues, costs and other indicators associated to public pay-phones. Likewise, the establishment of results for PPP must only take account of data for these services.
On the basis of results obtained separately for FTS and PPP, the proportion of each component in the net costs for unprofitable areas is then determined, this proportion being applied to broad results of the “area model” obtained in the first step so as to establish the contribution of each of the components (FTS and PPP) for the net cost of unprofitable areas.
b) Unprofitable customers living in profitable areas and low-income retired persons and pensioners
Results obtained using the model of unprofitable customers living in profitable areas must be fully allocated to the FTS component, no alterations being required. Likewise, the determination of costs allocated to low-income retired persons and pensioners must be taken into account fully in the FTS component.
c) Unprofitable public pay-phones in profitable areas
Results obtained using the public pay-phones model must be fully allocated to that component, no alterations being required.
d) Indirect benefits
- Corporate reputation and brand enhancement
The calculation must be performed according to the methodology used so far, the allocation to the FTS component and to the PPP component being distributed according to the proportion of the number of unprofitable accesses for each of these components compared to the range of unprofitable accesses.
- Ubiquity
The ubiquity value is calculated taking into account customers that would choose the USP when moving from unprofitable areas to profitable areas and the current net value of the margin created by customers in profitable areas.
As this indirect benefit solely concerns the ability of the USP to provide FTS throughout the national territory, it is considered that it should be fully allocated to the FTS component. - Advertising in public pay-phones
The benefit associated to advertising in public payphones corresponds to the advertising value that the USP derives from being able to use public pay-phone spaces for advertising purposes. The calculation of the value associated to this indirect benefit takes only into account unprofitable public pay-phones, as they would no longer exist where the USP was not required to provide the US. As such, the value of this benefit must be fully allocated to the public pay-phones component. - Mailing
Mailing consist in an indirect benefit, given that the USP is able to attach different sorts of ads to invoices at a very low additional cost.
As only the FTS invoices are concerned, it is deemed that the total value of this benefit must be fully allocated to the FTS component. - Regulation fees
The methodology for calculating CLSU deems that not considering, for the purpose of the calculation of fees due for the provision of electronic communications networks and services, revenues resulting from the universal service provision, in the part concerning revenues associated to retired people and pensioners, constitutes a benefit.
As such, the value of the “regulation fees” indirect benefit results from the difference obtained from the calculation of regulation fees due by the USP, taking or not into account revenues associated to retired people and pensioners.
In the described conditions, it is considered that this benefit concerns only the FTS component, namely retired people and pensioners, thus values obtained must be fully allocated to the FTS component.
As regards inputs (operational, financial and cost inputs) to be used in the calculation of CLSU, indicators which concern the period concerned, that is, inputs for the first 5 months of 2014, should be used as much as possible.
In the scope of such inputs, in case average unit values calculated on the basis of annual CAS data for 2014 are used, the following issues must be safeguarded:
a) average unit costs determined for the period the US was provided must not be significantly different from average costs of the 2014 operation, namely as regards operational costs, costs of capital and amortizations; and
b) Operational indicators (no. of installations, monthly payments, etc.) and financial indicators used to calculate costs must not be influenced by seasonal effects.
In this context, MEO must fully demonstrate that average unit costs for 2014, as well as the operational and financial indicators used to calculate net costs, adequately reflect the company’s operation in the referred period. It is stressed that in case significant differences are identified, MEO must identify and apply the necessary adjustments to remedy these differences.
The information to be provided by MEO must be detailed, duly substantiated and susceptible to validation by an audit to take place in due course.
3rd step:
After CLSU are calculated for each of the US components for the period between 1 January and 31 May 2014, the CLSU value for the FTS component constitutes CLSU for that component.
As regards the CLSU allocated to PPP, a pro-rata is performed taking into account the period up to which MEO was the PPP USP prior to the tender designation (8 April 2014). As such, the value to be taken into account, in the case of PPP, is obtained by multiplying the obtained value for this component by 98/151 (number of days).
