MOBILE SERVICES STATISTICAL INFORMATION

Transcription

1 MOBILE SERVICES STATISTICAL INFORMATION 2ND QUARTER 2015

2 Index HIGHLIGHTS Mobile service penetration rate Active mobile stations/ user devices Distribution of active mobile stations/user devices by provider Users of typical mobile broadband services Traffic Voice SMS MMS, Video calls and mobile TV International roaming Mobile service revenues Index of tables Table 1 - Active mobile stations / user devices with actual use and associated with Machineto-Machine communications (M2M)... 9 Table 2 Distribution of active mobile stations/user devices by provider...10 Table 3 - Distribution of mobile stations/user devices by provider...11 Table 4 - Users of typical mobile broadband services...12 Table 5 - Voice traffic: minutes...17 Table 6 - Text Messaging (SMS)...21 Mobile Service 2nd quarter /26

3 Table 7 - Multimedia messages (MMS)...22 Table 8 - Roaming in traffic...23 Table 9 - Roaming out traffic...24 Table 10 Revenues from the mobile telephone service...25 Table 11 Average monthly revenue per subscriber...25 Index of graphs Graph 1 MTS Penetration in EU Graph 2 - Evolution reported in active mobile stations / user devices and stations/devices with actual use... 8 Graph 3 - Penetration of broadband services...13 Graph 4 Use of other services on mobile phones...14 Graph 5 - Evolution in voice call traffic in minutes...15 Graph 6 - Average number of minutes per month per active mobile station with actual use, excluding Internet access cards and mobile stations associated with M2M communication...18 Graph 7 - Evolution in text message traffic (SMS)...19 Graph 8 Evolution in the percentage of mobile phone users using instant messaging services...20 Graph 9 - Average monthly charge payable by MTS customers aged 10 years and over 26 Mobile Service 2nd quarter /26

4 HIGHLIGHTS As at the end of 2Q15, penetration of mobile services was reported at per 100 inhabitants. The penetration rate reported for mobile stations with actual use was per 100 inhabitants. There were 16.4 million mobile stations eligible to use the service. Of these, 12.8 million (77.8 percent of the total) saw actual use during the quarter. Excluding cards/modems and mobile stations associated with Machine-to-Machine communications (M2M), the number of active mobile stations/user devices with actual use in 2Q15 totalled about 11.7 million, a decline of 0.1 percent versus the previous quarter and an increase of 0.7% over the same period of During the quarter, there was further migration of subscribers from pre-paid plans to combined/hybrid plans and, to a lesser extent, to post-paid plans, especially those associated with multiple-play offers which include fixed services and the mobile telephone service. As a result of this trend, at the end of the 2Q15, the proportion of pre-paid subscribers was reported at 52.4 percent, falling 10 percentage points from a year earlier. There were around 5.2 million actual users of services which are typical of mobile broadband (i.e. video telephony, broadband data transmission, mobile TV, etc.) increasing 5.2 percent versus the previous quarter and by 19.4 percent versus 2Q14, to represent 40.8 percent of total mobile stations with actual use. The growth reported in the use of these services (in year-on-year terms) is associated with mobile phone Internet access (increasing 30.6 percent versus 2Q14), especially as part of bundles, and with the increasing penetration of smartphones. The volume of conversation minutes originating on mobile networks increased by 4.1 percent compared to 1Q15 and by 10.6 percent compared to 2Q14. The reported year-on-year growth is mainly due to the growth in off-net traffic following the introduction of offers with included calls and the discontinuation of tariff differentiation between on-net and off-net calls, particularly in bundled offers that comprise the mobile service. Mobile Service 2nd quarter /26

5 Average duration per call originating on the mobile network (excluding cards/modems and M2M devices) was reported at 159 seconds, increasing by 6 seconds versus 2Q14. Users of the text messaging service (64.6 percent of total mobile stations with actual use, excluding Internet access cards and M2M communications equipment) sent 8.7 percent fewer messages versus 2Q14. Users of this service sent an average of 242 messages per month (versus 258 messages in 2Q14), representing about 8 messages per day. Message traffic has seen a significant reduction due to the emergence of alternative forms of communication. The number of users of roaming international services outside Portugal represented 7.8 percent of total mobile stations with actual use (excluding cards/modems and M2M devices). Roaming out traffic increased over the same quarter of 2014, in particular the volume of internet traffic (increasing percent). This increase may be associated, among other factors, with the entry into force of the new caps on retail charges for roaming services within the European Union and European Economic Area on 1 July Roaming in traffic increased from the previous quarter as is usual for this time of year. Compared to the same quarter of 2014, there were increases reported in all types of traffic, particularly in Internet traffic (increasing percent). The volume of accumulated revenues 1 from services to customers were reported at about 737 million euros up to June 2015, representing a decline of 19.3 percent compared to the same period of Average monthly revenue per subscriber was 9.5 euros. 1 Excludes revenues from mobile service included in bundles with fixed services. Mobile Service 2nd quarter /26

6 Latvia Sweden Finland Estonia Bulgaria Italy Portugal Austria Lithuania Denmark Luxembourg Germany Poland Malta United Kingdom Czech Republic Cyprus Ireland Belgium Netherlands Spain Slovenia Greece France Hungary Slovenia Romania Croatia 1. Mobile service penetration rate As at the end of 2nd quarter 2015 (2Q15), the penetration of mobile services in Portugal was reported at per 100 inhabitants 2. If only mobile stations with actual use were considered, the penetration rate in Portugal would be reported at per 100 inhabitants. Excluding Internet access cards/modems and mobile stations associated with the Machineto-Machine (M2M) service, the penetration rate is reported at per 100 inhabitants. According to data from the EC 3, as at the end of 2014, the average penetration rate of the mobile telephone service in the EU28 was per 100 inhabitants. Portugal has the seventh highest rate of penetration. Graph 1 MTS Penetration in EU Unit: MTS Subscribers (active SIM cards) per 100 inhabitants Source: EC Digital Agenda Scoreboard Resident population (No.); Annual - INE (Statistics Portugal), Annual Population Estimates. Data reference period: 31/12/2014. In this report, and for purposes of calculating penetration rates, the most recent population estimates are used, subsequent to Census 2011, as published by INE (Statistics Portugal) on 16 June For this reason, the values published in this report are not comparable with the values in previous reports. 3 Digital Agenda key indicators. Mobile Service 2nd quarter /26

7 According to data from Marktest's Barómetro de Telecomunicações (Telecommunications Barometer) 4, 94.9 percent of residents in Portugal were customers of the Mobile Telephone Service (MTS) this quarter. The difference between the penetration rate given above and this value is due to several factors (for example users with more than one card to access the service). 2. Active mobile stations/ user devices 5 As at the end of 2Q15, there were approximately 16.4 million active mobile stations in Portugal 6 associated with post-paid tariff plans, pre-paid plans and combined/hybrid plans (falling 0.2 percent on the previous quarter and rising 1.2 percent compared to the same quarter of 2014). The number of active mobile stations in 2Q15 is within the forecast range resulting from the historical trend. About 12.8 million active mobile stations (77.8 percent of the total) saw actual use in the last month of the quarter (in line with the previous year and 0.1 percent less than in the previous quarter). The reported value of this indicator this quarter is above the upper limit of the forecast range resulting from the historical trend and the estimated seasonal effect. Excluding Internet access cards/modems and mobile stations associated with Machine-to- Machine communications (M2M), there were 11.7 million mobile stations/devices with actual use in 2Q15 (a decline of 0.1 percent over the previous quarter and an increase of 0.7 percent over 2Q14). 4 The Barómetro Telecomunicações (Telecommunications Barometer) is a regular study conducted by Marktest for the Telecommunications sector. The universe of the Barómetro de Telecomunicações - Rede Móvel (Telecommunications Barometer Mobile Network) comprises people aged 10 and over living in mainland Portugal or in the Autonomous Regions of Madeira and the Azores; a sample is compiled on a monthly basis which is proportional to and representative of the study's universe, corresponding to 1350 interviews per month. 5 Information compiled on 05 August The quarterly data presented in this report is subject to in the event of any revisions or updates. 6 Active mobile stations are mobile stations which are eligible to use service regardless of actual use. Mobile Service 2nd quarter /26

8 4Q91 1Q92 2Q92 3Q92 4Q92 1Q93 2Q93 3Q93 4Q93 1Q94 2Q94 3Q94 4Q94 1Q95 2Q95 3Q95 4Q95 1Q96 2Q96 3Q96 4Q96 1Q97 2Q97 3Q97 4Q97 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q14 2Q15 Graph 2 - Evolution reported in active mobile stations/user devices and stations/devices with actual use Active Mobile Stations Forecast Active Mobile Stations with Actual Use Forecast range* Unit: millions of mobile stations/user devices Note: * Forecast range at a significance level of 95 percent. To model the Active Mobile Stations series, a regression model was used: Yt = Q Q PP*t OP*t 2 + ( t 2 ) UMTS + ( t t 2 ) CG + ( t 7.741t 2 )CE with all significant independent variables at a 95 percent confidence level, including, seasonal dummies for the 2nd and 4th quarter, dummy for the introduction of pre-paid plans (PP) with positive quadratic trend from 3rd quarter 1995, the entry of Optimus (OP) with negative quadratic trend from 3rd quarter 1998, dummies for the allocation of UMTS licences (UMTS) with negative quadratic trend from 4th quarter 2000, dummies for the launch of commercial 3G offers (CG) with positive quadratic trend from 2nd quarter 2004, dummies for the to the economic backdrop in Portugal (CE) with negative quadratic trend from 3rd quarter The adjusted coefficient of determination (adjusted R2) is To model the Active Mobile Stations with Actual Use series a linear regression model was used with linear and quadratic trend (t and t 2 ): Y t = t t 2. The following seasonality indices were calculated (additive model): Q1= ; Q2= ; Q3= and Q4= The adjusted coefficient of determination (adjusted R2) is Mobile Service 2nd quarter /26

9 Table 1 - Active mobile stations / user devices with actual use and associated with Machine-to- Machine communications (M2M) 2nd Quarter 2015 Total number of active mobile stations / user devices associated with post-paid, pre-paid and combined/hybrid tariff plans Quarterly Year-on-year % % % with actual use % % 2 0.0% associated with M2M % % % Post-paid plans % % % with actual use % % % associated with M2M % % % Pre-paid plans % % % with actual use % % % associated with M2M 0 0.0% % % Combined/hybrid tariff plans % % % with actual use % % % associated with M2M % % % Unit: thousands of mobile stations / user devices Pre-paid plans were the plans that gave rise to the reported decline in the number of active mobile stations/user devices over the quarter and over the last year. Post-paid plans (increasing 7.1 percent over the quarter and increasing 33.6 percent over the last year), and combined/hybrid plans (increasing 1.5 percent over the quarter and increasing 24.2 percent over the last year) remain in an upward growth trend. The trend is mainly associated with increased penetration of multiple-play tariffs which include the mobile telephone service 7. According to Marktest's Barómetro de Telecomunicações (Telecommunications Barometer), in March 2015, 29.6 percent of residential mobile telephone service customers had a multiple-play offer, compared to 25.7 percent as at the end of 4Q14. From another perspective, in 2Q15, 42.8 percent of homes with multiple-play offers (bundles) had an offer which included the mobile telephone service 8. 7 The number of mobile stations/user devices associated with post-paid and hybrid plans may be affected by the accounting criteria used by the operators as regards subscribers to multiple-play offers. 8 See MARKTEST - Estudo Barómetro de Telecomunicações (Telecommunications Barometer), June 2015 [Base: Homes with bundles of services (Total)]. Mobile Service 2nd quarter /26

10 3. Distribution of active mobile stations/user devices by provider The table below shows the distribution of total active mobile stations by provider 9 associated with post-paid, pre-paid and hybrid tariff plans. MEO continued to be the leading provider with 47.1 percent of active mobile stations, followed by Vodafone with 31.1 percent. With a share of 20 percent, NOS was the only provider that added active mobile stations, with a 1.1 percentage point increase reported in its overall share over the period. Table 2 Distribution of active mobile stations/user devices by provider 2Q14 1Q15 2Q15 Quarterly (p.p) Year-onyear (p.p) MEO Vodafone NOS Other providers Unit:%, p.p 9 Active mobile stations are mobile stations which are eligible to use service, regardless of actual use. Mobile Service 2nd quarter /26

11 Table 3 - Distribution of mobile stations/user devices by provider 2nd Quarter 2015 CTT Lyca mobile MEO Mundio Mobile NOS Vodafone Mobile stations / Active user devices with post-paid, pre-paid and hybrid tariff plans Mobile stations / Active user devices with post-paid, pre-paid and hybrid tariff plans in actual use 0.2% 1.4% 47.1% 0.2% 20.0% 31.1% 0.2% 1.2% 44.8% 0.2% 19.6% 34.0% Mobile stations / Active user devices with post-paid, pre-paid and hybrid tariff plans in actual use, excluding cards/modems used for Internet access 0.2% 1.3% 45.0% 0.2% 18.8% 34.5% Mobile stations / Active user devices with post-paid, pre-paid and hybrid tariff plans in actual use, excluding cards/modem used for Internet access and mobile stations associated with M2M communications Unit:% 0.2% 1.3% 45.8% 0.2% 18.2% 34.2% Note: The definitions of the indicators used for calculation are those set out in the mobile services form currently in use. These definitions may differ from those used by the providers. It is also noted that the data given according to these indicators may have been affected by the e-iniciativas programme; as such the shares of each provider may partly reflect the different commitment assumed in the context of tenders to allocate UMTS licensing for the purpose of the promotion of the information society by each provider. 4. Users of typical mobile broadband services In 2Q15, there were about 12.6 million users eligible 10 to use typical mobile broadband services (an increase of 0.5 percent over the previous quarter). Users eligible to use typical mobile broadband services now represent 76.9 percent of the total active mobile stations. 10 Eligible user refers to a mobile station/user device of a user which contractually and technically has capacity to access broadband services, regardless of whether access is actually made during period being reported. Mobile Service 2nd quarter /26

12 Table 4 - Users of typical mobile broadband services 2nd Quarter 2015 Quarterly Year-on-year Total number of users of mobile broadband services (eligible) of which are users of 3rd generation services, active equivalent upgrades and standards (who recorded traffic in the last month of the period being reported) of which are users of broadband Internet access service % % % % % % of which are users with a specific tariff for broadband Internet access % % of which have connection to Internet using card/modem % % Unit: thousands of users, %. Meanwhile, there were about 5.2 million active users who actually used characteristic 3rd/4th generation services (i.e. video-telephony, broadband data transmission, Mobile TV, etc.), 5.2 percent more than in the previous quarter and 19.4 percent more than in 2Q14. Users of such services make up 40.8 percent of total mobile stations with actual use (6.6 percentage points more than in 2Q14). Mobile Service 2nd quarter /26

13 Graph 3 - Penetration of broadband services Percentage of cards/modems out of total users of 3G services, upgrades and equivalent standards Percentage of users of 3G services, upgrades and equivalent standards out of total mobile stations with actual use Percentage of users of 3G services, upgrades and equivalent standards out of total users eligible to use broadband services Percentage of users eligible to use broadband services out of total active mobile stations 2Q15 1Q15 4Q14 3Q14 2Q14 10,7% 11,7% 12,3% 14,0% 15,7% 40,8% 38,8% 39,6% 37,2% 34,2% 41,3% 39,5% 41,1% 40,4% 37,6% 76,9% 76,3% 74,9% 72,6% 71,5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Unit: %. The growth (in year-on-year terms) reported in the number of users of 3G/4G services is associated with the significant increase in mobile phone Internet access (increasing 30.6 percent versus 2Q14), especially associated with bundled offers and the widespread takeup of smartphones 11. According to Marktest's Barómetro de Telecomunicações (Telecommunications Barometer), residential use of mobile phones to access the Internet has been increasing, totalling 51.8 percent in 2Q15. Meanwhile, smartphone penetration continued to grow at a significant pace, reaching 62.2 percent in June According to Marktest's Barómetro de Telecomunicações (Telecommunications Barometer), there are around five million smartphone users resident in Portugal. 11 Study from gfk available at: 12 See MARKTEST - Estudo Barómetro de Telecomunicações (Telecommunications Barometer), June 2015 [Base: People possessing a mobile phone (Total). Excludes non-responses]. Mobile Service 2nd quarter /26

14 As well as Internet access (browsing), the main activities associated with such services include social networking, instant messaging and SMS, the use of and making calls (VoIP). Graph 4 Use of other services on mobile phones ,3 17,5 20,4 16,6 21,6 18,9 14,3 18, ,7 19,4 10, ,5 18,8 31,7 20,5 9,1 8,8 18,5 28,3 8 20,2 19,9 18,2 20,1 25, ,5 36,6 21,2 17,8 29,8 21,1 20,4 20,2 25,5 20,9 23,6 31,5 37,3 38,2 11,7 12,4 13,8 16,2 17,2 17,6 22,8 24,1 28,4 16,9 18,9 20,3 26,9 29,5 30,7 36,5 37,9 41,6 45,8 49,9 54,6 77,7 77,4 78,1 78,6 78,3 77,2 79,2 77,1 76,6 Jun.13 Sep.13 Dec.13 Mar.14 Jun.14 Sep.14 Dec.14 Mar.15 Jun.15 Mobile banking Voice calls using VOIP apps - Skype, Viber Roaming service None of above Messenger (ex:what'sapp, Imo, Facebook Messenger) via apps Social networks via apps Internet access SMS - Text messaging service Unit: %. Source: MARKTEST - Barómetro de Telecomunicações (Telecommunications Barometer), June 2013 to June Base: People possessing a mobile phone (Total) Among users of mobile broadband services who registered traffic in the last month of the report, 10.7 percent are users of the Internet access service with cards/modems. Since the current questionnaire was introduced (1Q10), the number of cards/modems has fallen by 56.8 percent, in the most part as a result of the end of the Government's e-iniciativas scheme. 13 MARKTEST - Barómetro de Telecomunicações (Telecommunications Barometer), June 2013 to June Services that you normally use on your mobile phone, as well as making and receiving calls (suggested question). Mobile Service 2nd quarter /26

15 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2T15 5. Traffic 5.1. Voice The number of conversation minutes originating on mobile networks totalled 6.6 billion in 2Q15 (increasing by 10.6 percent compared to 2Q14), remaining within the limits of the forecast range resulting from the historical trend and estimated seasonal effect. Graph 5 - Evolution in voice call traffic in minutes Unit: Millions of minutes Minutes(Y) Forecast Forecast range* Notes: * Forecast range at a significance level of 95 percent. A regression model was used: Yt = t Q Q CE + ( *t)P with all significant independent variables at a 95 percent confidence level, including, positive quadratic trend up to 3Q2010, seasonal dummies for the 1st and 3rd quarters, dummy for the to the economic backdrop in Portugal (CE) with effect between 4th quarter 2010 and 4th quarter 2012 (CE) and dummy related to the introduction of bundled offers with MTS (P) with increasing linear trend from 1st quarter The adjusted coefficient of determination (adjusted R2) is The increase in traffic seen compared to 2Q14 stems from increases in off-net traffic (increasing 47.5 percent). Traffic to short and non-geographic numbers (increasing 21.4 percent) and mobile-fixed traffic (increasing 18.7 percent) also report significant rates of growth. In contrast, on-net traffic and international traffic decreased compared to 2Q14. Mobile Service 2nd quarter /26

16 The increase in traffic versus 2Q14 is due to the effect of offers with included calls. The increase in off-net traffic and mobile-fixed traffic, and the consequent of traffic structure that has been occurring, results from the discontinuation of price differences in a number of tariff offers between on-net calls and off-net calls and the appearance of offers with "unlimited traffic" to all national networks. There is also evidence that this tariff may reduce the strength of the so-called "network effect". According to Marktest s Barómetro de Telecomunicações (Telecommunications Barometer) 14, in June 2014, around 27.5 percent of people with a mobile phone (in cases where the main mobile phone was not included in a bundle) reported that their choice of operator stemmed from the fact that the people they communicated with were connected to the same network. In June 2015, this figure had fallen 7.8 percentage points to 19.7 percent. Likewise, according to Marktest's Barometer, in June 2015, only 13 percent of people possessing a mobile phone who switched operator did so because friends and family were connected to the same network. A year earlier, in June 2014, this reason was cited by 22 percent of the people surveyed. The combination of services/bundles is now the second reason most often given by people with mobile phones who have switched operator (17.3 percent), followed by pricing. On-net traffic now makes up 62.5 percent of originated traffic, the lowest level since 2010 and 6.8 percentage points less than in 2Q See Source: MARKTEST - Barómetro de Telecomunicações (Telecommunications Barometer), June 2013 to June 2015 [Base: People possessing a mobile phone in cases where the main mobile phone was not included in a bundle (Total)]. Mobile Service 2nd quarter /26

17 Table 5 - Voice traffic: minutes 2nd Quarter 2015 Distribution of traffic type Quarterly Year-on-year By traffic origin % % % To own provider (on-net) % % % To other national MTS providers (off-net) % % % To national FTS providers % % % To short and non-geographical numbers % % % To providers of international networks % % % By traffic termination % % % From own provider (on-net) % % % From other national MTS providers (off-net) % % % From national FTS providers % % % From providers of international networks % % % Short and non-geographical numbers % % % Unit: thousands of minutes, %. The number of minutes terminated on mobile networks was reported at 6.4 billion (increasing 4.6 percent compared to 1Q15 and increasing 10.3 percent compared to 2Q14). Meanwhile, international traffic saw a decline of 31.7 percent compared to 2Q In 2Q15, the average number of conversation minutes per mobile station with actual use (excluding cards/modems and M2M equipment) was reported at 187 minutes per month. Of these, 117 minutes were on-net, 53 minutes were off-net, 9 were associated with calls to the fixed network, 4 minutes with calls to short/non-geographic numbers and 5 minutes with calls to international networks. 15 The reduction in international traffic results from activity data reported by one provider and is currently being validated. Mobile Service 2nd quarter /26

18 Graph 6 - Average number of minutes per month per active mobile station with actual use, excluding Internet access cards and mobile stations associated with M2M communications Minutes to intenrational networks per mobile station with actual use Minutes to short and non-geographical numbers per mobile station with actual use Minutes to national FTS per mobile station with actual use Off-net minutes per mobile station with actual use On-net minutes per mobile station with actual use 2Q15 1Q15 4Q14 3Q14 2Q14 5,2 4,9 5,1 5,4 6,0 3,6 3,5 3,6 3,6 3,0 8,9 8,5 8,0 7,9 7,5 52,5 46,5 44,3 40,8 35,8 116,9 114,5 119,4 122,6 117, Unit: minutes Average duration per call originating on the mobile network (excluding cards/modems and M2M equipment) this quarter was reported at 159 seconds per call, 6 seconds less than in 2Q SMS In 2Q15, about 5.5 billion text messages were sent (an increase of 3.5 percent over the previous quarter and a decline of 8.7 percent compared to the same period of 2014). The increase this quarter mainly stems from messages sent at this time of year by corporate clients to their customers (promotional campaigns). As in previous quarters, the value corresponding to the period being reported is below the lower limit of the forecast range resulting from the historical trend and the estimated seasonal effect. Mobile Service 2nd quarter /26

19 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Graph 7 - Evolution in text message traffic (SMS) Messages(Y) Forecast Forecast range* Unit: millions of messages Notes: * Forecast range at a significance level of 95 percent A linear regression model was used with logistic trend sms= /(1+exp(-0,267332*(t-5,285584))) considering the following seasonal indices according to the additive model: Q1= ; Q2= ; Q3= ; Q4= Adjusted model R2 is The decline in text message traffic seen over recent years stems, in the most part, from the appearance of alternative forms of communication. According to Marktest s Barómetro de Telecomunicações (Telecommunications Barometer) 16, about 35 percent of mobile phone users aged 10 years or older used instant messaging services The Barómetro Telecomunicações (Telecommunications Barometer) is a regular study conducted by Marktest for the Telecommunications sector. The universe of the Barómetro de Telecomunicações - Rede Móvel (Telecommunications Barometer mobile network) comprises people aged 10 and over living in mainland Portugal or in the Autonomous Regions of Madeira and the Azores; a sample is compiled on a monthly basis which is proportional to and representative of the study's universe, corresponding to 1200 interviews per month (3500 interviews per quarter). 17 The question in the survey refers to "services that you often use on your mobile phone". Mobile Service 2nd quarter /26

20 Meanwhile, tariffs have appeared with include data traffic, possibly leading to a migration of users from SMS services to the Internet access service. Likewise, new voice service tariffs (as mentioned above) may also be contributing to a reduction in the use of SMS. Graph 8 Evolution in the percentage of mobile phone users using instant messaging services ,7 34,5 28,3 25,3 21,2 17,8 11,7 12,4 13,8 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 Instant Messaging Services (e.g.:whatsapp, Viber, Imo, Facebook Messenger) Unit: %. based on microdata from Marktest's BTC, 2Q2013-2Q2015 Base: Individuals aged 10 years or over with a mobile phone On the other hand, there is a notable increase in the number of SMS messages sent to other mobile networks (increasing 26.6 percent compared to 1Q15 and increasing percent compared to 2Q14). This increase in off-net traffic results from the growth of offers that allow users to send free SMS messages to all mobile networks. The number of SMS messages sent to the users own networks fell for the eighth consecutive quarter, with a decrease of 0.9 percent from the previous quarter and a drop of 20 percent versus 2Q14. Mobile Service 2nd quarter /26

21 Table 6 - Text Messaging (SMS) 2nd Quarter 2015 Distribution of traffic type Quarterly Year-on-year Number of originated SMS % % % SMS to own network % % % SMS to other national MTS % % % SMS to national FTS % % % SMS to international networks % % % Unit: thousands of messages An average of 242 messages were sent by users of this service each month (258 in 2Q14), representing about 8 messages per day. A total of 26 million value-added messages were sent in 2Q15, representing 0.5 percent of total messages sent. The number of users of the text messaging service represents, on average, about 64.6 percent of total mobile stations with actual use, excluding Internet access cards and M2M devices (an increase of 0.9 percentage points over 2Q14) MMS, Video calls and mobile TV In 2Q15, users of the mobile service sent around 28 million MMS messages (a decline of 4.4 percent over the previous quarter and a decline of 22 percent over 2Q14). Mobile Service 2nd quarter /26

22 Table 7 - Multimedia messages (MMS) 2nd Quarter 2015 Quarterly Year-on-year No of originated MMS % % No of video-calls Calls % % Video-call traffic volume Minutes % % Unit: thousands The number of users using the multimedia messaging service remains relatively low (representing just 13.3 percent of total mobile stations with actual use in 2Q15, excluding cards/modems and M2M devices). Absolute volume of traffic generated by this service also remains low: each user sent an average of 6 multimedia messages per month during the quarter. Meanwhile, 672 thousand video-calls were made during 2Q15, 7.8 percent more calls than in the previous quarter and 54 percent more than in 2Q14. This increase stems from the increased use of devices which are compatible with the service, with widespread take-up of smartphones and the inclusion of free video-calls in tariffs. As at the end of 2Q15, there were around 5.2 thousand users of the Mobile TV service (representing around 0.1 percent of total mobile stations with actual use of broadband services) International roaming The average number of users of the international roaming service represents 7.8 percent of total active mobile stations with actual use excluding Internet access cards/modems and M2M devices. Compared to the previous quarter, roaming traffic reported significant increases for all traffic types, such as typically occurs in the second quarter of each year (seasonality). Mobile Service 2nd quarter /26

23 Compared to 2Q14, roaming in traffic 18 increased by 7.3 percent in terms of calls, 12.4 percent in terms of minutes and 12.9 percent in terms of messages. There have been also significant increases in the case of Internet traffic (increasing by 151 percent in terms of number of sessions and by percent in terms of traffic in GB). Table 8 - Roaming in traffic 2nd Quarter 2015 Originated Received Quarterly Year-on-year Number of calls % 36.2% % % Number of minutes % 40.4% % % Text messages % 70.9% % % Number of Internet access sessions Volume of Internet access (GB) n.a. n.a % % n.a. n.a % % Average length of calls (secs) Unit: thousands Roaming out 19 voice and Internet traffic increased this quarter versus 2Q14; increases were reported in all types of traffic, with the exception of Internet sessions, which declined by 18 percent. Growth in Internet traffic volume versus 2Q14 has been significant (increasing by percent). For thirteen consecutive quarters, this type of traffic has been posting yearon-year increases of over 40 percent. 18 Traffic routed (originated and terminated) on national networks by subscribers of foreign networks. 19 Traffic generated and terminated by subscribers of national operators as users of the networks of other operators abroad. Mobile Service 2nd quarter /26

24 Table 9 - Roaming out traffic 2nd Quarter 2015 Originated Received Quarterly Year-on-year Number of calls % 53.7% % % Number of minutes % 56.6% % % Text messages n.a. n.a % % Number of Internet access sessions Volume of Internet access (GB) n.a. n.a % % n.a. n.a % % Average length of calls (secs.) Unit: thousands These trends, especially the significant increases reported in Internet traffic, may have been impacted, among other factors, by the entry into force, on 1 July 2014, of new caps on roaming retail tariffs within the European Union. In the case of calls made, these caps represent a reduction of 21 percent in the price. In the case of calls received, the price has been cut by 28.5 percent, while the maximum price of text messages has fallen 25 percent. The cost of roaming data traffic in the European Union has been cut by 55.5 percent. On the other hand, the reduction in Eurotariff prices may have had a negative impact on SMS traffic which has fallen in year-on-year terms by 10.6 percent. The proliferation of Wi- Fi Hotspots 20 and their increasing popularity among frequent travellers will also have contributed to this trend See ABI Research study available at: 21 See Ericsson study available at: Mobile Service 2nd quarter /26

25 6. Mobile service revenues Revenues from services provided to end-users up to 2nd quarter 2015 totalled around 737 million euros. Table 10 Revenues from the mobile telephone service January- June 2014 January - June 2015 Year-on-year Revenues from provision of services to retail customers Units: millions of euros, % % Note 1: Revenues accumulated from beginning of year. According to available data, average monthly revenue per customer is estimated at 9.5 euros over the same period. Table 11 Average monthly revenue per subscriber January- June 2014 January - June 2015 Year-on-year Average monthly revenue per subscriber Units: euros, % % Note 1: Active subscribers with actual use. The significant variations reported in total and unit revenues partly reflect the non-inclusion, as from 1Q15, of revenues derived from the mobile component of bundles sold by MEO, following the merger occurring at the end of Up until 4Q14, revenues derived from the mobile component of bundles sold by MEO were reported as revenues from Mobile Services. As from 1Q15, revenues derived from the mobile component of the monthly charges for "bundles of services" reported by MEO are reflected in the revenues indicator for bundles, as published in the reports on telephone services provided ata fixed location and bundles. As such the values reported for revenues from bundles are not comparable with previously reported values. Mobile Service 2nd quarter /26

26 Mar.10 Jun.10 Sep.10 Dec.10 Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 Jun.12 Sep.12 Dec.12 Mar.13 Jun.13 Sep.13 Dec.13 Mar.14 Jun.14 Sep.14 Dec.14 Mar.15 Jun.15 According to data from Marktest's Barómetro de Telecomunicações (Telecommunications Barometer), the average monthly charge of the mobile service at the end of 2Q15 was 2.3 euros 23, falling1.5 euros from 2Q14 and falling 36.8 percent compared to the same period of Graph 9 - Average monthly charge payable by MTS customers aged 10 years and over Unit: euros Source: MARKTEST - Barómetro de Telecomunicações (Telecommunications Barometer), 1Q2010 to 2Q2015 Base: People in possession of mobile phone (up to April 2013) / People in possession of mobile phone not included in a bundle of services (May 13) 23 See MARKTEST - Estudo Barómetro de Telecomunicações (Telecommunications Barometer), June 2014 [Base: People in possession of mobile phone not included in a bundle of services]. Mobile Service 2nd quarter /26