Trends in telecommunications prices - April 2021

Executive summary

• In April 2021, telecommunication prices, measured through the Consumer Price Index (CPI) sub-index, were unchanged from the previous month.
• Compared with the same month of the previous year, the change in prices was -0.8%. Since November 2017, the year-on-year change in telecommunication prices has been lower than CPI growth.
• The average rate of change in telecommunications prices over the last twelve months was -0.9%, i.e., 1.0 percentage point (p.p.) below that recorded by the CPI (0.1%). This price reduction also reflects the impact of the entry into force on 15 May 2019 of the new European rules regulating intra-EU communications prices, and the reduction of the monthly fee of some post-paid mobile broadband offers via PC/Tablet and of some bundled offers.
• In April 2021, the average rate of change in telecommunications prices in Portugal was lower than in the European Union (-0.8 p.p.). The average rate of change over the past 12 months in telecommunications prices in Portugal was the 10th lowest (18th highest) among the EU countries. The country where prices increased the most was Poland (+5.5%) while the biggest decrease was in Denmark (-3.6%). On average, telecommunication prices in the EU decreased by 0.1%.
• From a long-term perspective and in cumulative terms, telecommunications prices grew by 8.9 p.p. since the end of 2010, while the CPI grew by 10.4 p.p. The divergence between the evolution of the two indices began in 2015 and became more pronounced in 2016; it is associated with the "price adjustments" made by the main providers. As of May 2019, the decrease in the divergence between the two indices was mainly due to the entry into force of Regulation (EU) 2018/1971 of the European Parliament and of the Council which imposed a maximum price for international intra-EU calls and SMS.
  
  If it was not for the price reduction in intra-EU calls, it is estimated that telecommunications prices would have increased by 12.5 p.p. since the end of 2010, being, in cumulative terms, 2.1 p.p. above the change in the CPI over this period.
• Between the end of 2009 and April 2021, telecommunications prices in Portugal increased by 6.9%, while in the EU they decreased by 9.8%. The gap has narrowed with the entry into force on 15 May 2019 of new European rules regulating intra-EU communications prices.
  
  A finer comparative analysis with some Nordic and Baltic countries shows that between the end of 2009 and April 2021 telecommunications prices fell by 32.3% and 16.9% in Denmark and Lithuania, respectively, while in Portugal, Latvia and Finland they increased by 6.9%, 0.6% and 0.1%, respectively
• Minimum monthly fees are offered by NOWO in seven cases from a range of 13 services/offers, while the providers MEO, NOS and Vodafone offered the lowest monthly fees for two types of services/offers each.
• Compared with the same month of the previous year, there were 16 price changes for minimum monthly fees for services/offers, of which 13 were price increases and three were price decreases.
• The following price variations are noteworthy: the minimum monthly fee for the 4P offers decreased 1.1% (due to the 50% reduction in the monthly fee of NOWO's offer with box in the first 6 months); and the minimum monthly fee for individualized fixed broadband (BLF) increased 4.3%, due to the end of the first monthly fee offer of NOWO's base service.
• Per provider, MEO cut the minimum monthly fee of one service/offer compared to the same month of the previous year and raised the monthly fee in three services/offers. The MEO service whose monthly fee decreased significantly was the offer of mobile phone service with Internet on the mobile phone (UZO offer), which now has values close to the minimum monthly fee (provided by NOWO). NOS increased the minimum monthly fees for five services/offers and Vodafone increased the minimum monthly fees for four services/offers. Particularly noteworthy is the increase in the monthly fees of the triple play offer of MEO, NOS and Vodafone that occurred in October and November 2020¹.