Trends in telecommunications prices - December 2020

Executive Summary

• In December 2020, telecommunications prices, measured by the sub-index of the Consumer Price Index (CPI), fell by 0.1% compared to the previous month. This change was due to a price change in a triple-play bundle.
• Compared to the same month of the previous year, the observed variation in prices was -1.0%. The year-on-year variation of telecommunications prices has been lower than the growth of the CPI since November 2017.
• The average variation rate of telecommunications prices of the last twelve months was -2.1%, i.e., 2.1 percentage points (p.p.) below that recorded by the CPI (0.0%). This price reduction also reflects the entry into force on 15 May 2019 of the new European rules regulating the prices of intra-EU communications.
• In December 2020, the average variation rate of telecommunications prices in Portugal was lower than that observed in the European Union (-2.1 p.p.). The average variation rate of telecommunications prices of the last twelve months in Portugal was the 5th lowest (23rd highest) among EU countries. The country that recorded the highest increase of prices was Poland (+4.1%) while the strongest reduction occurred in Ireland (-3.6%). On average, telecommunications prices in the EU remained unchanged.
• Between the end of 2009 and December 2020, telecommunications prices in Portugal increased by 6.5%, while in EU they fell by 10.8%. The difference narrowed following the entry into force on 15 May 2019 of the new European rules regulating the prices of intra-EU communications.
  
  A finer comparative analysis of some countries reveals that a divergent price trend was installed from 2011-2012 onwards. In particular, telecommunications prices in Portugal increased by 6.5%, while in Spain, Italy and France they fell by 9.4%, 16.9% and 24.3%, respectively, between the end of 2009 and December 2020.
• Minimum monthly charges are offered by NOWO in seven cases of a range of 13 services/offers, while MEO, NOS and Vodafone each showed the lowest monthly charges for two types of services/offers.
• Compared to the same month of the previous year, the following price variations stand out in particular: the minimum monthly charge of the most common quadruple play (4P) bundles fell by 0.4%, due to changes of the NOWO offers; the minimum monthly charge of the mobile telephone service with internet on the mobile phone fell by 36.1%, due to the reduction of the monthly charge of the NOWO offer from 7.5 euros to 5 euros and the introduction of the free offer of the first monthly charge; and the minimum monthly charge of individualised fixed broadband (BLF) increased by 4.3%, due to the end of the free offer of the first monthly charge of the basic service provided by NOWO.
• By provider, MEO decreased its monthly charge of two services/offers in relation to the same month of the previous year and increased the monthly charge in four services/offers. One of the MEO services whose monthly charge decreased significantly was the offer of mobile telephone service with internet on the mobile telephone (UZO offer), which now has values close to the minimum monthly charge (provided by NOWO). NOS increased the minimum monthly charges of seven services/offers, and Vodafone increased the minimum monthly charges of four services/offers. Particular note should be made of the increased monthly charge of the triple play offer of MEO, NOS and Vodafone, which occurred in October and November of 2020¹.