Communication prices are 20% higher than EU

in News · 13-12-2019 01:00:00 · 0 Comments

Prices of communications in Portugal are 20 percent higher than the EU average, with the Internet 31 percent more expensive, according to analysis by the Competition Authority (PCA).

In the analysis, published on the PCA website for public consultation, the regulator said that packages sold in Portugal are 13 percent more expensive than the European average and identified the higher prices in Portugal as a vulnerability in terms of competition, such as the reduced mobility of consumers and the high number of complaints.

The PCA analysis focused on customer loyalty and switching costs which contribute to the perception of reduced competition in the sector by Portuguese consumers.

“The current loyalty policy reduces the fraction of consumers available to change operator, reducing the disciplinary effect on market prices, innovation and quality of service and, as a result, incentives to competition, which makes consumers more vulnerable to the exercise of market power,” the PCA said.

Last November, the president of the National Communications Authority (Anacom), João Cadete de Matos, in a speech at the opening of the 29th Communications Congress (APDC), argued that a reduction in the price of communications and internet access in Portugal was essential, creating conditions to reverse the disparity.

He also said that in Portugal, telecommunications prices increased by 12.5 percent, which corresponds to the largest increase observed in that period in the countries of the EU and compares with a reduction of 10.9 percent observed in the EU.

In November, Apritel, an association of the telecommunications sector, published a study that placed Portugal in second place, out of a group of 10, of the countries with the lowest package of communi-cations services in Europe.

Meanwhile, the Competition Authority (AdC) has assessed customer retention in telecomm-unications and concluded that there are competitive barriers that require a change in the rules.

In analysis published on its website, the authority advocates a change in the law to make the subsidisation of new equipment and the installation of new services the “only exceptions” to the prohibition of customer contract renewals, and the elimination of the exception to the obligation to provide information to consumers in contracts made electronically at a distance.

The recommendations also include transposing measures of the European Code to increase mobility and ease of access to information, obliging all mechanisms for contracting services to allow cancellation under equal conditions of simplicity and expense for the consumer, assessing the duration of the contract to amortize the operator’s investments, defining rules that increase transparency in the advertising and dissemination of charges, and studying the automatic transfer of services.

The authority’s analysis also reveals that there is “reduced mobility” of consumers in Portugal, with more than half of customers never changing operators and of those who have changed, more than 50 percent found it difficult to change operators.

The “high” number of complaints in this sector last year (more than 34,000 complaints to Deco and more than 81,000 to ANACOM, the sector regulator), leads telecommunications to be perceived as the “least competitive” sector, and higher prices than the average charged in the EU, are also pointed out in the PCA analysis.

Services that include minimum contractual terms and charges for consumers who terminate contracts on their own initiative during the loyalty period predominate. Operators claim that these are the conditions that allow them to offer discounts on equipment prices, activation/installation and provision of services.

“However, these contractual conditions result in effective restrictions on mobility”, consumers are “more vulnerable to the exercise of market power” in Portugal.


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