In Portugal, separate service offers, or single play (1P) offers are relatively rare, compared to bundled offers and also, in some cases, in the international context. Not all operators provide a complete range of 1P solutions for all fixed services considered individually. The minimum monthly charges of these offers are, in general, more expensive compared to bundled offers and their quality has evolved less.
ANACOM's first report on 1P offers, disclosed today, presents the available information on the penetration, availability, monthly charges and features of the existing residential 1P offers of electronic communications in Portugal in 2020.
The report addresses the advantages and disadvantages of the increased penetration of bundled electronic communication services, as opposed to the reduction of the penetration of 1P offers. This discussion is fundamental in seeking to prevent bundled offers from unreasonably limiting the competition or tying the consumers to a single provider in a manner that lowers the consumer's surplus and social wellbeing.
According to the analysis conducted by ANACOM, the difference between the minimum monthly charge of 1P offers and bundled offers in 2020 was almost always more than 10 euros, with this value doubling to 20 euros in the case of 4P and 5P offers. The analysis by ANACOM found that the difference has been falling in 3P offers and increasing in the case of 4P/5P offers, which are the most expensive bundled services.
An international comparison of 23 European providers (of which 11 with 1P offers), the difference between the sum of the monthly charges of the separate services and the minimum monthly charge of a 4P bundle varied between -33% and +43%. 1P offers are only cheaper than bundles when they have features that are very inferior to those of the bundled offers.
The comparative analysis carried out by ANACOM, relative to 2020, also concluded that on average the download speeds of the 1P offers of the internet access service were lower than the speeds of the bundled offers. The average download speed of the internet access separate offers actually subscribed by residential clients was about 155 Mbps in the case of bundled offers, while the speed of the separate offers was about 50 Mbps.
Over the last five years, the average speed of the bundled offers increased by about 112%, while the average speed of the offers only increased by about 11%.
In an international comparison of 23 European providers, among the 13 providers that offered fixed broadband separately, the Portuguese providers were among the 7th and 9th place in the ranking of the highest median download speeds. The median download speeds of the separate offers of Portuguese providers were also among those showing higher negative deviations in relation to the median download speed of the bundled offers.
Concerning the offer of television services in Portugal, the average number of channels included in the offers actually subscribed by residential clients of TV signal distribution service by subscription was 72 for separate offers and 148 for bundled offers.
Among the seven European providers considered that offer this service in a separate manner, the Portuguese operators with these offers were among the 3rd and 5th places in the ranking of the median number of channels.
In contrast to the case of the attribution of fixed service offers, the mobile data traffic ceilings of the 1P offers were higher than those of the bundled offers. On average, the individualised offers of internet on the mobile phone showed higher traffic ceilings (7 GB) than those of the bundled offers (3 GB).
The average traffic ceiling of the 1P separate mobile broadband offers (14 GB) was also higher than the figure of the bundled offers (7 GB). In the case of these services, the number of 1P offers, although moving in a downward trend, still represent between 60% and 70% of mobile accesses.
The following table shows the main potential advantages and disadvantages associated with bundled communications services:
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Potential advantages |
Potential disadvantages |
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From the point of view of the providers, there are cost savings associated with economies of scale and range, and simplification of the distribution and marketing. |
Providers may use bundles to: - leverage their market power, for example, by bundling a service that competes with others that have market power, or by changing the prices of their separate offers so as to cause compression of margins or by not permitting replicability of the offer; - increase the costs of changing provider for the consumers and discourage the acquisition of separate offers; - mitigate the competitive edge of separate service providers or others that do not have access to all the bundle's inputs (e.g., access to infrastructures, sports contents, mobile services). Furthermore, this could increase the concentration in markets, as the bundles boost the consolidation between mobile and fixed operators. |
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Consumers may also benefit from discounts arising from the allocation of fixed costs to various services compared to the acquisition of separate services. |
The economic literature sustains that bundles enable the providers to discriminate prices and seize the consumer's surplus without significantly reducing prices. It also reduces the variability of the consumers' “willingness to pay”, facilitating the fixing of prices. |
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Integration of services, the possibility of using them in various types of equipment and new innovation opportunities (integration of non-traditional services and services of other sectors).
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Could restrict consumer choice if the bundle includes services and equipment that the consumer is not interested in (when the alternatives are not competitive). This is especially important in the case of consumers who wish to subscribe to over-the-top (OTT) services, that require only access to the internet (separately). |
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Could reduce complexity if, in relation to the basic offer, “à la carte” options are permitted. |
Could increase complexity, making the comparison between prices and offers more difficult, reducing pricing transparency. |
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Single invoice. |
Could make invoices more complex and less easily understandable by the consumers. |
Source: ANACOM based on OECD, ''Triple and Quadruple Play Bundles of Communications'' (DSTI/ICCP/CISP(2014)1/FINAL), 2015.
