The Communications Sector 2023

The report The Communications Sector 2023, prepared and published regularly by ANACOM, is now available. It characterises the electronic and postal communications sector in 2023 and explains its evolution during the year under review.

In 2023, the number of fixed accesses increased by 2% compared to the previous year. The fixed telephone service (FTS) recorded an increase of around 1.2%, the lowest growth since 2019, totalling 5.5 million at the end of the year. Both the Pay-TV signal distribution service (PTV) and the Internet service at a fixed location (FBB) recorded a total of 4.6 million accesses (+2.1% and +2.9% respectively compared to the previous year), with the number of FBB accesses exceeding the number of PTV accesses in 2023 (+16 thousand accesses). PTV growth was the lowest since 2013 and Internet access service (IAS) growth was the lowest since this information has been collected (2001), partly as a result of the already high penetration of each of these services.

The number of active mobile accesses decreased by 0.8% year-on-year, while the number of mobile accesses actually used increased by 0.4%. The number of mobile Internet access users increased by 6.3% compared to the previous year. Mobile broadband Internet (MBB) via PC/tablet/pen/router, which accounted for 7% of mobile Internet users, increased by 2.3% compared to the previous year.

In 2023, the penetration of services provided at a fixed location increased, namely fixed broadband (+1.2 p.p.), the Pay-TV signal distribution service (+0.9 p.p.) and the fixed telephone service (+0.6 p.p.).

Considering only the residential segment, the penetration rates of FTS and PTV stand out with 98 accesses per 100 households, followed by FBB with 94 accesses per 100 households, according to information provided by the operators and demographic data from the Instituto Nacional de Estatística (INE - the National Statistics Institute).

The growth in penetration of fixed services is due to the increasing take-up of bundled services, which reached a penetration rate of 94 per 100 households, 2 p.p. more than in 2022. It should be noted that operators have promoted the take-up of bundled offers with higher levels of service, namely convergent bundles, while the weight of service offers marketed independently (single play) is very low (1% of the total in the case of IAS, 2% in the case of PTV and 4% in the case of FTS). Isolated or single-play offers, which are characterised by the fact that they are not marketed as a package, accounted for 14.9% of fixed accesses.

In the case of mobile services, the penetration of the mobile telephone service (MTS) decreased by 1.5 p.p. compared to the previous year. On the other hand, there was an increase in the penetration of MBB (+5.9 p.p.), in particular access via mobile phone, which reached 99.9%. Isolated or single-play offers accounted for 70.5% of mobile accesses.

In terms of postal services, the postal capitation rate - postal traffic per inhabitant - amounted to 51.1 items per inhabitant in 2023, 2.6 items per inhabitant less than in the previous year.

In the residential segment, the combination of services most used by households (not necessarily as a bundle) included FTS, FBB, PTV and MBB (40.5%), followed by the three fixed services FTS+FBB+PTV (32.2%). The third most used combination of services did not include the fixed telephone service and consisted of FBB+PTV+MBB (4.8%). MTS was used by the overwhelming majority of the population aged 16-74 (97%).

Exclusive use of digital terrestrial television (DTT) in the main homes covered 8.3% of households (-0.7 p.p. compared to 2022).

Around 1.7% of families had no access to a telephone service (fixed or mobile), 12.4% of the population had never used the Internet and around 48.6% of families with FTS reported not using the service.

The main barriers identified by families to accessing services were cost and lack of usefulness (in the case of PTV and IAS), digital illiteracy (in the case of IAS) and fixed/mobile substitution (in the case of FTS).

The Lisbon Metropolitan Area (Lisbon M.A.) and the Autonomous Regions of the Azores (A.R. Azores) and Madeira (A.R. Madeira) recorded a higher proportion of households with access to fixed electronic communications services and in particular to bundled services (over 90%). PTV penetration in these regions was between 93% and 95% of households, FBB between 88% and 90% and FTS between 85% and 88%.

MBB penetration showed the least regional disparities, with the Lisbon M.A. being the only region with a penetration rate above 50%.

The younger and more educated population, those in employment or studying and those with higher incomes had a higher penetration of electronic communication services.

Internet penetration was 87.8% in micro enterprises and 96.6% in small enterprises. Almost all medium and large enterprises had access to the Internet.

Among enterprises with 10 or more persons employed, fixed broadband penetration was 95.0% (1.1 p.p. above the EU27 average). Fixed broadband penetration in Portugal was above the EU27 average in almost all enterprise sizes and in most economic sectors.

By the end of 2023, it is estimated that at least 6.1 million households were covered by a high-speed network (+0.5% compared to 2022). However, the growth in 2023 was lower than the average of the last four years in all NUTS II regions, reflecting the fact that coverage is reaching high levels. In total, 94.4% of households and businesses were covered by a high-speed network (+0.5 p.p. compared to 2022).

With the development of services based on new generation networks, fibre optic networks (FTTH/B) have become the main access networks for fixed Internet (66.2% of accesses) and PTV (63.9%). In the case of FBB, around 90.4% of accesses had advertised download speeds of 100 Mbps or more, 1.5 p.p. more than in the previous year and 12.9 p.p. more than in 2019. Portugal was the fourth European Union (EU) country in this ranking in 2023.

Nevertheless, 94% of municipalities and 64% of civil parishes in Portugal were found to have uncovered areas. The regions of Alentejo and Algarve had the highest percentage of civil parishes with uncovered areas. In December 2023, the Government launched a public tender for the installation, management, operation and maintenance of very high capacity electronic communications networks in these areas.

The three MTS operators in Portugal currently provide LTE (Long Term Evolution) networks with coverage of over 99% of the population. By the end of 2023, the same operators claim to have achieved 5G coverage rates of close to 90% of the national population. By 2023, all municipalities had 5G base stations installed. However, it should be noted that the number of base stations installed in the national territory with 5G technology only covered 69% of the civil parishes, where the majority of the population is concentrated.

4G and 5G mobile networks were used by 85.8% and 22.1% of mobile Internet access users respectively.

The 2020-2021 COVID-19 pandemic period affected electronic communications traffic, with a strong increase in several categories of voice and data traffic and a more substantial decrease in SMS and international roaming traffic. From 2022 onwards, the trend previously observed for most categories of electronic communications traffic resumed.

In 2023, fixed data traffic grew by 17.7% and mobile data traffic increased by 39.2%. On the other hand, fixed voice traffic fell by 16.2%, mobile voice traffic fell by 4.4% and the number of SMS fell by 10.9%.

Each FBB access generated an average of 285 GB per month (+13.9% compared to 2022). For MBB, monthly traffic per user was 10.0 GB, up 30.0% year-on-year. Traffic on 5G networks is estimated to have accounted for around 10.3% of total mobile data traffic, or 5.4 GB per month per access. On the other hand, the average monthly mobile voice traffic per access decreased by 13 minutes (to 216 minutes per month) and the average monthly fixed voice traffic per access decreased by 9 minutes (to 42 minutes per month per access). The average number of monthly SMS messages per access was 61, the lowest figure since this information has been collected (2010).

It should be noted that the use of over-the-top (OTT) services is increasing. In 2023, around 70.7% of the population made voice or video calls over the Internet (+1.8 p.p. compared to the previous year) and 79.1% used instant messaging (+1.5 p.p. compared to the previous year).

In 2023, postal traffic fell by 4.9 % compared to the previous year, to reach 535 million items. Direct mail, editorial mail and correspondence saw a decrease in traffic of 9.1%, 6.7 % and 6.5% respectively.

Parcels, which have increased by 51.4% since 2018, continued to grow (+8.7% in 2023), reaching a new all-time high and accounting for 14.2% of total traffic. E-commerce also continued to grow, although at a lower rate than during the pandemic. In 2023, 44.0% of the population aged 16-74 made a purchase over the Internet in the three months prior to the survey, 1.3 p.p. more than in the previous year.

Employment in the postal sector increased by 4.6%, the number of network access points increased by 16.2% and the number of vehicles increased by 5.8%.

The number of CTT post offices remained the same as the previous year, while the number of post branches increased by 0.2 %, representing an increase of four post branches compared to 2022.

In 2023, retail revenues from the main electronic communications services totalled EUR 4.01 billion, an increase of 6.0% compared to the previous year. This development was mainly driven by bundling revenues, which increased by 9.0% compared to the previous year, the highest growth since 2016.

Revenue from postal services totalled approximately EUR 722 million, an increase of 1.5% compared to the previous year. Average revenue per item increased by 6.7%, continuing the growth trend that began in 2018.

The year-on-year change in telecom prices was 6.4% in December 2023, the highest since April 1994 - data from the National Statistics Institute. Over the last twelve months, the average rate of change in telecom prices was 4.1%. Compared to the Consumer Price Index (CPI), the year-on-year rate of change in telecom prices was 5.0 p.p. higher and the average rate of change in recent months was 0.3 p.p. lower.

Compared to the European Union (EU), the average rate of change of telecom prices in Portugal over the past twelve months was above average (+2.7 p.p.), with Portugal being the 8th country with the highest price change. Compared to the same month of the previous year, the change in telecom prices in Portugal was the third highest among the 27 countries considered.

Comparing Portugal’s price levels with those of EU countries belonging to the OECD, the prices of individual fixed telephone service offers, double-play offers combining fixed broadband and fixed telephone service, triple-play offers and quadruple-play offers were above the average prices in the EU for all residential usage profiles, according to the methodology and usage profiles developed by the OECD and taking into account information from TechInsights.

On the other hand, prices for mobile voice and mobile Internet offers were lower than the EU average for all usage profiles, except for high voice consumption profiles. In the case of double-play offers integrating fixed broadband and Pay-TV signal distribution, prices in Portugal were lower than the EU average for some bundles with a high consumption profile.

At the end of 2023, the four largest companies in the Portuguese electronic communications market were MEO, the NOS Group, Vodafone and NOWO. MEO had the highest share of fixed voice (44.9%), PTV (41.5%), fixed Internet (41.1%) and mobile telephone services (38.1%). The NOS Group had the second highest share of PTV (36.4%), FBB (33.7%), FTS (32.4%) and MTS (29.8%). Vodafone was the third operator with the highest share of MTS (28.3%) and of electronic communications services provided at a fixed location (shares of 22.0% for FBB, 19.6% for FTS and 19.2% for PTV). The shares of NOWO were 2.7% for PTV and FBB, 2.1% for FTS and 2.0% for MTS.

In terms of bundled offers, MEO had the highest number of subscribers (41.6%), followed by the NOS Group (35.1%), Vodafone (20.6%) and NOWO (2.7%). In all types of bundles (2P, 3P and 4/5P) MEO had the highest share of subscribers. In the residential segment, MEO was the main provider of the fixed telephone, Pay-TV signal distribution and fixed Internet access services (40.8%, 39.9% and 39.4% respectively). In the case of services provided at a fixed location, Vodafone increased its share of fixed location subscribers by between 0.3 p.p. and 0.5 p.p., while MEO’s share varied between -0.1 p.p. and 0.5 p.p.. The subscriber shares of the NOS Group and NOWO fell between 0.1 p.p. and 0.7 p.p. and between 0.1 p.p. and 0.2 p.p. respectively.

CTT was the main provider of postal services in Portugal. The CTT group’s share of traffic amounted to 83.3% at the end of the year under review (-1.8 p.p. compared to 2002).