Over-the-top services (OTT) - 2017



This information is copyrighted to ANACOM

OVER-THE-TOP (OTT) SERVICES: Use of Internet-based instant messaging, voice calls and other apps in Portugal and the European Union

(residential population)

December 2017

ANACOM

OTT services in Portugal and the EU in 2017

This report presents the information available on the use of Over-the-Top (OTT) services in Portugal and in the European Union (EU) in 2017, as well as the rate of substitution from traditional services, and the principal characteristics of the users of these services.


44% of Internet users make voice and video calls

According to the survey conducted by the European Commission1 at the start of 2017, the percentage of Internet users making voice or video calls using the Internet in Portugal2 was 44%, 5 percentage points (p.p.) more than the previous year. This is the highest annual growth since 2013. Portugal was in 21st position in the EU28 ranking.

Graph 1 - Internet users making voice/video calls over the Internet, Portugal and EU28

According to the survey conducted by the EC at the start of 2017, the percentage of Internet users making voice or video calls using the Internet in Portugal was 44%, 5 percentage points (p.p.) more than the previous year.


Unit: %
Source: European Commission, Information and Communication Technologies in households and by individuals (2008 and 2017)
Base: Individuals aged between 16 and 74 who used Internet in the first three months of the year.

If the total number of individuals is considered, and not only Internet users, the penetration in Portugal would be 32%, 7 p.p. less than the EU28 average (this is the greatest difference recorded since 2012).

Graph 2 - Internet users making voice/video calls over the Internet, Portugal and EU28

If the total number of individuals is considered, and not only Internet users, the penetration in Portugal would be 32%, 7 p.p. less than the EU28 average (this is the greatest difference recorded since 2012).
 
Unit: %
Source: European Commission, Information and Communication Technologies in households and by individuals (2008 and 2017)
Base: Individuals aged between 16 and 74 years of age

According to Marktest's Telecommunications Barometer (BTC)3, at the end of the 3rd quarter of 2017 (3Q2017), 37% of mobile phone users made voice calls over the Internet. Voice calls through the Internet were the over-the-top service with most increased use in the last year (+10.3 percentage points than in 3Q2016).

Penetration of instant messaging exceeds 50% among mobile users

Instant messaging was used by 54% of mobile phone users.

Graph 3 - Mobile phone users using OTT services: voice calls and messaging

Instant messaging was used by 54% of mobile phone users.


Unit: %
Source: ANACOM based on microdata from the Marktest BTC, 4Q2013 - 3Q2017.
Base: Individuals aged 10 years or over with a mobile phone.
Note: All estimates are reliable (coefficient of variation of less than 10%)4. An upward arrow signals a statistically significant increase compared to the same quarter in the previous year5.

Contrary to what is the case with voice services, the penetration of instant messaging is higher among mobile phone Internet users than with fixed Internet users.

Graph 4 - OTT services (voice calls and messaging): Mobile Internet v. Fixed Internet

Contrary to what is the case with voice services, the penetration of instant messaging is higher among mobile phone Internet users than with fixed Internet users.


Unit: %
Source: ANACOM based on microdata from the Marktest BTC, 3Q2016 and 3Q2017.
Base: Individuals aged 10 and over with mobile phone Internet; individuals aged 15 and over with fixed Internet at home
Note: All estimates are reliable (coefficient of variation of less than 10%)4. An upward arrow indicates a statistically significant increase compared to the same quarter in the previous year5.

Paid videostreaming users increase

Services offering the consumer a collection of films and series for a monthly fee started in Portugal in the second quarter of 2015.

According to Marktest's Telecommunications Barometer (BTC), in 3Q2017, 5.5% of individuals aged 10 or over subscribed to at least one of these services (i.e. Netflix, NPlay6, FOXPlay and Amazon Prime Video), +2.3 percentage points than in the same quarter of the previous year.

Netflix users accessed this service using a PC or laptop (1 out of 2) and 45% accessed it through an app on a smartphone or tablet.

Graph 5 - Awareness of and subscription to videostreaming on demand services

Netflix users accessed this service using a PC or laptop (1 out of 2) and 45% accessed it through an app on a smartphone or tablet.


Unit: %
Source: ANACOM based on microdata from the Marktest BTC, 3Q2017.
Base: Individuals aged 10 or older
Note: Key to estimates: (#) Unreliable estimate; (*) Acceptable estimate; (no sign) Reliable estimate4.

Social networks are the main applications used

Data from Marktest's Telecommunications Barometer for 3Q2017 shows that, among mobile phone Internet users, about 80% accessed social networks, 68% watched videos and consulted maps, 47% listened to music, 27% played online games, 21% accessed mobile banking, and 11% watched online TV.

In the case of fixed Internet users, the main applications are access to social networks (70%), map browsing (53%) and watching videos (60%).

Compared with the same period of the previous year, there was an increase in the use of online videos and music among mobile Internet users, and social networks, online videos and mobile banking among fixed Internet users (significant variations greater than 3 percentage points).


Graph 6 - Over-the-top (OTT) services using Internet access

Compared with the same period of the previous year, there was an increase in the use of online videos and music among mobile Internet users, and social networks, online videos and mobile banking among fixed Internet users (significant variations greater than 3 percentage points).
 
Unit: %
Source: ANACOM based on microdata from the Marktest BTC, 3Q2016 and 3Q2017.
Base: Individuals aged 10 and over with mobile phone Internet; individuals aged 15 and over with fixed Internet at home
Note: All estimates are reliable (coefficient of variation of less than 10%)4. There were no significant differences from the previous quarter.

Portugal above the EU average for non-professional applications, below the average for mobile banking and e-commerce

According to the survey "Information and Communication Technologies in households and by individuals" regarding early 2017, usage of this type of application showed a higher service penetration rate in Portugal than the average in the EU28, with the exception of mobile banking and e-commerce.

Table 1 - Activities carried out over the Internet in the last 3 months by consumers, Portugal and EU28, 2017
  EU28 (%) Portugal Ranking var. EU28 (p.p. var. Portugal 2016/17 (p.p.)
Activities carried out on the Internet for non-professional purposes
Participating in social networks 65 76 8th 11 2
Posting self-created content on a website to be shared or viewed by other people 40 60 3rd 20 3
Sending/Receiving emails 86 80 18th -6 -1
Access to information and entertainment
Reading news on websites, online newspapers or magazines 72 80 13th 8 2
Searching for information on products or services 78 82 14th 4 -1
Searching for information on health 61 69 9th 8 0
Activities carried out over the Internet linked to civic participation and professional life
Published opinions or comments on civic or political issues on websites 14 18 3rd 4
Participated in online enquiries or polls to contribute to decision making for civic or political issues 10 15 3rd 5
Participated in professional networks (created a user profile, posted messages or other contributions, such as in LinkedIn, Xing, etc.) 15 16 12th 1
Carrying out other activities on the Internet
Using travel or accommodation related services  50 33 21th -17 6
Selling goods or services, after contacting and negotiating with the buyer through the Internet (e.g. eBay) 22 11 21th -11 0
Purchase of goods or online services 57 34 22th -23 1
Carrying out banking operations using Internet banking  61 42 24th -19 1

Unit: %, p.p.
Source: Eurostat, European ICT survey: "Information and Communication Technologies in households and by individuals" (2017); Data collected in the first quarter of the year.
Base: Individuals aged between 16 and 74 who used Internet in the first three months of the year.

According to consumer perception, there is a high degree of substitution between traditional services and over-the-top services, although this is decreasing.

According to data from Marktest’s BTC, in the 2Q2017 and on a scale from 1 (there is no substitution) to 10 (total substitution), consumers considered that the level of substitution between traditional services and OTT services was 6.9 and 7.0, respectively, for mobile voice and fixed voice.

Additionally, around 27% and 28% of consumers “totally agree" with substitution between traditional and OTT services, although this was less than that registered in the previous year (-3 percentage points).

Graph 7 - The use of Internet voice or messaging services has been replacing the use of traditional services

 Additionally, around 27% and 28% of consumers ''totally agree'' with substitution between traditional and OTT services, although this was less than that registered in the previous year (-3 percentage points).

Unit: %; scale 1 (totally disagree) to 10 (totally agree) 
Source: ANACOM based on microdata from the Marktest BTC, 2Q2016.
Base: Individuals aged 10 or older
Note: All estimates are reliable (coefficient of variation of less than 10%)4.

Internet messaging and voice services through the Internet are used by younger people and by users with higher levels of educations

The social-demographic and economic profile of consumers of over-the-top services (users of Internet voice calls and users of instant messaging) was outlined, based on an estimate of an econometric discrete choice model - logit7 and using microdata from the Marktest's Telecommunications Barometer (BTC) concerning the 3rd quarter of 2017.

From this analysis it was concluded that8:

  • Individuals aged less than 35 years of age with higher levels of education (secondary and higher education) are more likely to use instant messaging and voice calls over the Internet;
  • Voice calls over the Internet tend to be greater among mobile Internet users living in Greater Lisbon and in Madeira, and among students with fixed Internet.

Between the end of 2015 and 3Q2016 the use of voice calls over the Internet increased. In the case of mobile Internet, the use of the services grew mainly among individuals aged 15-24 years of age and 45-54 years of age, along medium/high social classes (A/B) and among individuals with higher educational studies. In the case of fixed Internet, growth occurred in the 25 to 34-year age range9.

Portugal was above the EU28 average in the use of voice or video calls among Internet users for individuals with a higher level of education (with secondary and higher educational studies, +4 and +1 percentage points, respectively).

Portugal was slightly below the average in all age groups.

Graph 8 - Use of voice or video calls among Internet users by age group

Portugal was slightly below the average in all age groups.

Unit: %
Source: Eurostat, European ICT survey: "Information and Communication Technologies in households and by individuals" (2017); Data collected in the first quarter of the year.
Base: Individuals aged between 16 and 74 who used Internet in the first three months of the year.

Between 2016 and 2017, the use of these services among younger users (16-24 years) and students grew more in the EU28 than in Portugal.

In addition, in different income quartiles, Portugal tends to use voice or video calls over the Internet among Internet users less when compared to the EU28 average.

Table 2 - Percentage of Internet users who made voice or video calls over the Internet, in terms of income, age group, level of education and employment status quartiles, Portugal and EU28
  2016 2017
EU28 Portugal Ranking var. EU28 (p.p. EU28 Portugal Ranking var. EU28 (p.p.
Income quartiles        
    1st quartile 36 41 15th 5 43 43 18th 0
    2nd quartile 34 35 18th 1 42 39 20th -3
    3rd quartile 36 34 18th -2 45 40 17th -5
    4th quartile 43 44 17th 1 51 49 18th -2
Age group        
   16 to 24 years of age 54 59 14th 5 63 60 21th -3
   25 to 34 years of age 46 41 22th -5 54 49 22th -5
   35 to 44 years of age 38 36 22th -2 46 45 21th -1
   45 to 54 years of age 33 33 18th 0 40 36 21th -4
   55 to 64 years of age 31 31 17th 0 36 34 19th -2
   65 to 74 years of age 29 26 22th -3 33 31 22th -2
Level of schooling        
  Up to the 9th year 34 34 22th 0 41 35 22th -6
  Secondary education 36 39 17th 3 44 48 15th 4
  Higher education 47 48 20th 1 52 53 17th 1
Employment status        
  Employed 39 37 21th -2 47 42 21th -5
  Unemployed 36 36 22th 0 42 42 22th 0
  Student 57 60 16th 3 65 61 22th -4
  Retired and other non-working individuals 32 31 21th -1 36 32 24th -4

Unit: %, p.p.
Source: Eurostat, European ICT survey: "Information up and Communication Technologies in households and by individuals" (2016 and 2017); Data collected in the first quarter of the year.
Base: Individuals aged between 16 and 74 years of age, who used the Internet in the first 3 months of the year according to the respective characteristic

Notes
nt_title
 
1 Information and Communication Technologies in households and by individuals carried out by EU national statistical institutions and harmonized and compiled by Eurostat. This survey is conducted annually. The respondents were made up of resident households in Portugal with at least one individual aged between 16 and 74 years of age. The sample size was 7478 households in 2017. The reference period of the information is the interview for data on households, and the first quarter of 2017 for data relating to individuals.
2 Voice or video calls over the Internet made between January and March of the respective year by individuals aged between 16 and 74 and who used the Internet in the first three months (excluding calls for professional purposes).
3 The Telecommunications Barometer (BTC) is a regular study developed by Marktest for the telecommunications sector. The population of the Telecommunications Barometer (BTC) - Fixed network comprises homes in Portugal with a sample size of 1,250 monthly interviews. The population of the Telecommunications Barometer - Mobile Network comprises individuals aged 10 and over living in Portugal with a sample size of 1,350 monthly interviews. Analysis of the BTC data is made for a quarterly period.
4 The coefficient of variation is used as a sampling error indicator, based on the variance of the ''proportion'' estimator of a simple random sample. The following classification is considered: reliable estimate when the coefficient of variation is less than 10%; acceptable estimate where the coefficient of variation is greater than or equal to 10% and less than 25%; unreliable estimate when the coefficient of variation is greater than or equal to 25%. The accuracy of the estimates does not only depend on the sample size, but is also influenced by the value of the estimate itself (e.g. for a fixed sample size, the reliability measured by the coefficient of variation is lower when the estimate value is lower).
5 This uses the statistical test of the difference between two proportions for large and independent samples, assuming a confidence level of 95 %.
6 At the beginning of November 2017, NPlay was renamed as Nos Play.
7 This type of model makes it possible to identify, in an integrated manner, the factors which distinguish users of services such as ''Internet voice calls” and “instant messaging'' among mobile phone Internet users (aged 10 and over) and among fixed Internet users (15 and over). The dependent variable is a binary variable which takes the value 1 where the individual uses the respective OTT service and 0 otherwise. The following discrete variables were taken as explanatory variables for the Marktest region, social class, age group, level of education, employment status, family size. The methodology used (logit model) is described in more detail in footnote 65 of ANACOM's 2011 State of Communications report.
8 Analysis carried out by and responsibility lying with ANACOM.
9 See attachment for more details.