The broadband market in Portugal

The last year of ANACOM’s activity was marked by an increase of the regulatory action in the scope of the broadband market, with emphasis on the alterations in the “ADSL PT Network” wholesale offers and the Reference Unbundling Offer (RUO), and on the definition of broadband markets, which for the first time include the access over the cable distribution network.

ANACOM intervened in the scope of the “ADSL PT Network” wholesale offers, compelling PT Comunicações to provide a higher number of access points, and more appropriate ones, thus enabling alternative operators to use the available resources more efficiently and making possible an increased flexibility as regards the definition of retail offer conditions, namely concerning high speed local access, contention ratio as well as other elements such as quality of service. The ATM access at regional and national level was introduced, and several classes of service and new classes of local access were made available. Some prices regarding this offer were also decreased, having regard to the principle of cost orientation of prices as well as the coherence between the RUO, the ATM and IP interconnection and the retail offers of the PT Group¹.

The intervention of ANACOM regarding the provision of a class of service of 2 Mbps within the “ADSL PT Network” wholesale offer² was also reflected at the level of the maximum high speed provided to the final client, in view of which subsequent offers of 4 Mbps, 8 Mbps and 16 Mbps were launched, supported both in the LLU and in the “ADSL PT Network” offer³.

* The upstream speed for this class was reduced from 512 kbps to 128 kbps.

* Draft decision of  09.05.2005.

In the scope of the RUO, the intervention of ANACOM concentrated mainly on the reduction of the maximum time limits associated to the supply of active and non-active loops and the decrease of prices of services provided within that offer (including the signal transport service), aiming to ensure coherent conditions between the different wholesale and retail offers of the PT Group⁴.

Note: PT Comunicações is responsible for these time-limits, no tests having been included.

In the scope of market assessments carried out, the wholesale supply of broadband access, including broadband access services supported over the public switched telephone network and also the cable distribution networks, was identified as relevant market, and the undertakings of the PT Group operating in the market under consideration were identified as significant market power operators⁵. As far as obligations imposed are concerned, the non-discrimination obligation and the price control obligation (through the retail-minus rule) should be highlighted, such obligations providing that the “ADSL PT Network” wholesale offer shall enable alternative operators to reply and compete (with an appropriate return level) with the retail offers of broadband internet access provided by the PT Group, regardless of the technology used. According to the defined schedule for the process of market assessment⁶, the public consultation and draft decision concerning this market were pursued in November 2004, and the final determination is expected to be issued in the course of May 2005.

ANACOM intends to ensure the existence of several additional wholesale offers, coherent between them (IP, ATM and LLU), which demand different levels of investment on the part of competitive operators, and, in compensation, enable different levels of differentiation of offers provided to end-users. To this extent, the regulatory action shall enable the development of a higher level of competition and the diversification of services provided, and shall also promote an efficient investment of those operators, upgrading at the same time the existing infrastructures and ensuring that end-users derive the maximum benefit in terms of choice, price and quality.

To this end, ANACOM’s action has shown a gradual approach, in the light of the new regulatory framework, favouring the promotion of competition in the market of electronic communications, having due regard to the proportional nature of its measures. By means of coherence between the wholesale prices of different offers, alternative operators are given the opportunity to climb the “investment ladder”. Alternative operators may opt for migrating from one form of access to a higher level, through the investment in their own infrastructures, and subsequently, by adding value to their offers as they go up the value chain.

The regulatory action in the broadband market – in parallel, naturally, with the initiatives of the different market operators and initiatives of other public entities – has presented the opportunity for the development and growth of that market. The coverage expansion of wholesale offers (both the “ADSL PT Network” offer and the LLU) has contributed, among other factors, towards the increase of the broadband penetration.

Graphic 1 – Evolution of the number of unbundled accesses

(see the original document)

Graphic 2 – Evolution of the penetration of broadband in Portugal

(see the original document)

Graphic 3 – Evolution of the penetration of broadband in the EU

(see the original document)

ANACOM takes the view that, following a stage of relatively intense regulatory activity, there are conditions for a higher level of competition in the broadband market, with expected results in the provision of more and better services, at better prices for consumers, which shall contribute towards the increase of the adoption of broadband access services.

ANACOM shall continue monitoring closely the broadband market, with a special focus on the assessment of time limits and conditions in the scope of the RUO and the verification of the stipulated and available quality of service, following complaints on time limits and unbundling faults, and shall take the appropriate measures to ensure the compatibility with the market needs and the safeguard of interests of users.

Consult:

• O Mercado da Banda Larga em Portugal
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