STATISTICAL INFORMATION FIXED TELEPHONE SERVICE 1ST QUARTER 2015

Transcription

1 STATISTICAL INFORMATION FIXED TELEPHONE SERVICE 1ST QUARTER 2015 Fixed Telephone Service 1st quarter 2015

2 Index HIGHLIGHTS Providers of the Fixed Telephone, Voice over Internet, nomadic VoIP and Telephone Voice Traffic Resale Services Penetration of the Telephone Service at a Fixed Location Number of installed accesses of the Telephone Service at Fixed Location Fixed Telephone Service and nomadic VoIP service customers Traffic originating on the fixed network FTS revenues and monthly charge Index of Graphs Graph 1 - Trend in penetration rate of main telephone accesses... 7 Graph 2 Trend in main accesses... 8 Graph 3 - Trend in Grupo PT s share of main FTS accesses Graph 4 Trend in direct access customers Graph 5 - Evolution in the number of nomadic VoIP customers Graph 6 Evolution in FTS voice traffic (minutes) Graph 7 - Monthly average number of minutes per main access Graph 8 Average monthly spend on FTS (stand-alone) Index of Tables Table 1 - Number of FTS providers... 5 Table 2 - Number of telephone voice traffic resale providers... 6 Table 3 - Number of voice over Internet providers... 6 Table 4 - Number of nomadic VoIP providers... 6 Table 5 - Number of FTS accesses... 9 Table 6 - Evolution in the provider shares of main FTS accesses /25

3 Table 7 - Number of FTS and nomadic VoIP customers Table 8 - Provider shares of direct access customers of the Telephone Service at a Fixed Location Table 9 - Traffic originating on the fixed network Minutes, Table 10 - Average duration of calls by traffic type Table 11 - Percentage of traffic routed through indirect access modes of the FTS (minutes) Table 12 - Trend in provider shares of FTS voice traffic (Minutes Table 13 - FTS revenues and revenues from bundles which include FTS /25

4 HIGHLIGHTS At the end of 1st quarter 2015 (1Q15), the penetration rate of main telephone accesses in Portugal was reported at 44.6 per 100 inhabitants, the highest level recorded since these statistics were first compiled (4Q06). The total stock of main telephone accesses was reported at 4.66 million accesses (an increase of 1.5 percent over 4Q14 and an increase of 2.6 percent compared to 1Q14). The quarter's growth (an increase of 67 thousand equivalent accesses) was due to an increase in the number of accesses supported over optical fibre and cable TV networks (+61 thousand accesses), ISDN (+29 thousand accesses) and in GSM/UMTS/LTE (+9 thousand accesses). The increase in ISDN accesses is associated with new large-sized non-residential customers reported by NOS. The number of installed public pay-telephones increased to around 22 thousand (increasing 0.4 per cent versus the previous quarter and increasing 2.4 percent year-on-year). At the end of this period, Grupo MEO was responsible for 52.6 percent of total main accesses (a decline of 1.4 percentage points versus 4Q14). Grupo NOS was the 2nd largest provider with a market share of 31.8 percent (+1.1 percentage points) and was the provider to report the largest increase in this period. Vodafone reported a share of 10.3 percent (+0.7 percentage points). The volume of fixed voice minutes fell by 5.3 percent over 3Q14 and 13.4 percent in relation to 1Q14, falling below the forecast range resulting from the estimated trend and seasonal effects. In 1Q15, each access consumed an average of 98 minutes per month in fixed-fixed calls (8 minutes fewer than in the previous quarter), 10 minutes in fixed-mobile calls (1 minute fewer than in the previous quarter) and 8 minutes in international calls (1 minute fewer than in the previous quarter).. 4/25

5 1. Providers of the Fixed Telephone, Voice over Internet, nomadic VoIP and Telephone Voice Traffic Resale Services 1 At the end of 1st quarter 2015 (1Q15), there were 17 undertakings authorised to provide the Fixed Telephone Service in Portugal (Table 1). Of the companies authorised to provide this service, 13 were operational 2, and of these, five provided direct access only and the rest provided services using both types of access direct and indirect. Table 1 - Number of FTS providers Q14 2Q14 3Q14 4Q14 1Q15 Authorised providers Operational providers Providers with direct and indirect access traffic Providers with direct access traffic only Providers with indirect access traffic only Unit: Number of providers There were 16 undertakings authorised to provide the telephone voice traffic resale service in 1Q15, while only five were operational. 1 The present report contains information compiled up to 30/04/2015. The information presented in this report w as compiled from the providers of this service and may be subject to alteration in the event that data is revised or updated. Follow ing the entry into force of the questionnaire on electronic communication services at a fixed location and nomadic VoIP, certain of the variables given in previous reports have been amended.. 2 Undertakings w hich, according to available statistical data, recorded traffic during the period being reported. 3 Undertakings w hich, according to available statistical data, recorded traffic during the period being reported. 5/25

6 Table 2 - Number of telephone voice traffic resale providers Q14 2Q14 3Q14 4Q14 1Q15 Authorised providers Operational providers Unit: Number of providers There were six operational providers of voice over Internet services 5 provided at a fixed location (according to conditions perceived by users as being equivalent to traditional FTS) as at the end of 1Q15 (Table 3). Table 3 - Number of voice over Internet providers Q14 2Q14 3Q14 4Q14 1Q15 Operational providers Unit: Number of providers There were 22 providers authorised to provide VoIP Services 7, as at the end of 1Q15 (Table 4), thirteen of these providers were operational. Table 4 - Number of nomadic VoIP providers Q14 2Q14 3Q14 4Q14 1Q15 Authorised providers Operational providers Unit: Number of providers 4 Undertakings w hich, according to available statistical data, recorded traffic during the period being reported. 5 See position of ICP-ANACOM on VoIP services available at ''Synthesis of the regulatory approach to VoIP services''. 6 Undertakings w hich, according to available statistical data, recorded traffic during the period being reported. 7 See position of ICP-ANACOM on VoIP services available at "Synthesis of the regulatory approach to VoIP services". 8 Undertakings w hich, according to available statistical data, recorded traffic during the period being reported. 6/25

7 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 2. Penetration of the Telephone Service at a Fixed Location The penetration rate of main telephone accesses was reported at 44.6 accesses per 100 inhabitants this quarter 9 (Graph 1), increasing 0.6 percentage points over the previous quarter. The penetration rate this quarter is the highest reported since ANACOM started compiling this information. Graph 1 - Trend in penetration rate of main telephone accesses Unit: Accesses per 100 inhabitants The penetration rate of residential direct access customers was reported at 56.5 per 100 conventional dwellings 10 (+0.3 percentage points versus 4Q14) and 82.4 per 100 private households 11 (+0.5 percentage points versus 4Q14). 9 In the present report, and for the purpose of calculating the penetration rate, use is made of the most recent estimates of population, conventional dw ellings and private households follow ing the 2011 Census and as published by INE (Statistics Portugal). As such, the values now reported are not comparable w ith the values given in previous reports. 10 Source: INE (Statistics Portugal) - Private households estimates (1998 series - no.) derived from Employment Statistics. 11 Source: INE (Statistics Portugal) - Private households estimates (1998 series - no.) derived from Employment Statistics. 7/25

8 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 1Q15 3. Number of installed accesses of the Telephone Service at Fixed Location There were 4.66 million main telephone accesses in Portugal in 1Q15 (Table 5). This value is above the upper limit of the forecast range resulting from the estimated historical trend. In relation to the previous quarter, the number of accesses increased by 1.5 percent (+66.7 thousand) - the largest increase in 5 years. The decline reported in analogue accesses (-1.7 percent) was offset by growth in GSM/UMTS/LTE accesses (+1.8 percent, +9 thousand accesses), in ISDN accesses (+6.1 percent, +29 thousand accesses) 12 and in VoIP/VoB accesses (+3.6 percent, +61 thousand accesses). The increase reported in the number of ISDN accesses is associated with new nonresidential customers and is the largest increase since ANACOM first started compiling this information. Graph 2 Trend in main accesses main accesses Forecast Forecast range* Unit: Accesses Notes: * Forecast range at a significance level of 95 percent. A logarithmic trend regression model w as used and a change of structure from 4Q2012 w ith a negative linear trend (significant variables at a confidence level of 95 percent). Regression equation: Y= ,1 ln(t)+4726,1d- 4072,5D_t. Modelling is from 2Q09. Adjusted R2 is The grow th in ISDN is the highest on record and is subject to validation. 8/25

9 In year-on-year terms, the number of main telephone accesses increased by 2.6 percent. There was notable growth reported in VoIP/VoB 13 (+13.7 percent) - these accesses include optical fibre accesses (FTTH/B), which increased by 31.5 percent, and cable TV accesses (+2.2 percent). Accesses supported by alternative networks to the traditional network represented 48.3 percent of main accesses in 1Q15, an increase of 0.8 percentage points over the previous quarter and an increase of 4.5 percentage points over the same quarter of Table 5 - Number of FTS accesses 1Q14 4Q14 1Q15 Variation No. Accesses Nº % Nº % Nº % 1Q15/4Q14 1Q15/1Q14 Total Main Accesses % 2.6% Analogue Accesses % -6.1% (of which) Public paytelephones % 2.4% ISDN and Diginet Accesses % -3.6% Basic % -16.8% Primary % 11.0% Fractioned % -5.3% Other digital accesses < < % -74.5% GSM/UMTS/LTE % 11.4% VoIP/ VoB % 13.7% Unit: Thousands of accesses, % Note: The data on FTS accesses w ith regard to the previous quarter has been amended follow ing updates pr ovided by certain operators. 13 These accesses include xdsl accesses, accesses based on optical fibre and VoB accesses s upported over the cable netw ork. See Synthesis of position of ICP-ANACOM on the regulatory approach to VoIP services at "Synthesis of the regulatory approach to VoIP services". 14 This indicator corresponds to the sum of the indicators for ''number of analogue accesses'' and ''number of equivalent digital accesses'', number of GSM/UMTS/LTE accesses and number of VoIP/VoB accesses w ith respect to direct access, including accesses installed at customer request, public pay-telephones and the providers' ow n complement. The providers' ow n complement of accesses is understood to be the complement of accesses for use by the provider itself (accesses pertaining to companies w ith w hich the provider has a dominant or group relationship are not included in its ow n complement and are accounted for as ''accesses installed at customer request ). 15 In addition to accesses installed at customer request, analogue accesses include the provider's ow n accesses and analogue cable telephony accesses. 16 The ''number of equivalent digital accesses'' corresponds to the sum of the number of lines pertaining to the fixed telephone service supported in each installed digital access. In ISDN accesses the number of equivalent accesses is tw o for each basic ISDN access and 30 for each primary ISDN access. Fractioned accesses are parts of primary ISDN accesses. ISDN accesses include the provider's ow n accesses and digital cable telephony accesses. The ''Others'' category mainly encompasses accesses of the ''Diginet'' type and FWA accesses. 17 These accesses include xdsl accesses, accesses based on optical fibre and VoB accesses supported over the cable netw ork. See ANACOM's position on the guidelines governing the regulatory approach to VoIP services at "Synthesis of the regulatory approach to VoIP services". 9/25

10 The number of installed public pay-telephones increased this quarter, rising to about 22 thousand in 1Q15, (an increase of 0.4 per cent over the previous quarter and an increase of 2.4 percent compared to 1Q14). FTS Provider shares The majority of installed accesses continued to belong to MEO 18 (Table 6 and Graph 3). At the end of 1st quarter 2015, Grupo MEO held about 52.6 percent of total main accesses (3.3 percentage points less than a year earlier and 1.4 percentage points less than in 4Q14) 19. The second largest operator is Grupo NOS 20 with a share of 31.8 percent (1.1 percentage points more than in the previous and 1 percentage point more than in 1Q14). Vodafone is the 3rd largest operator, which a share of 10.3 percent (+0.7 percentage points versus 4Q14 and +3 percentage points year-on-year). NOS was the provider that gained the most subscribers in net terms over the period. 18 On 29 December 2014, MEO - Serviços de Comunicações e Multimédia, S.A. w as acquired by PT Comunicações, S.A. - PT Comunicações, S.A. then changed its name to MEO - Serviços de Comunicações e Multimédia, S.A SLRO based offers are reported as direct accesses of the alternative providers. 20 On 16 May 2014, ZON TV Cabo Portugal, S.A. w as acquired by Optimus - Comunicações, S.A., and on the same date, Optimus - Comunicações, S.A. changed its name to NOS Comunicações, S.A.. On 24 June 2014, ZON TV Cabo Madeirense changed its name to NOS Madeira Comunicações, S.A. and ZON TV Cabo Açoreana changed its name to NOS Açores Comunicações, S.A., making up Grupo NOS. 10/25

11 Table 6 - Evolution in the provider shares of main FTS accesses Q14 2Q14 3Q14 4Q14 1Q15 Grupo MEO 55.9% 55.5% 54.8% 54.0% 52.6% PT Comunicações / MEO % 55.5% 54.8% 54.0% 52.6% TMN / MEO % 0.1% 0.1% 0.1% - Grupo ZON Optimus 24 / NOS % 30.4% 30.5% 30.7% 31.8% ZON Portugal / TV Cabo Optimus/ NOS Comunicações % 28.8% 29.0% 30.2% ZON Madeira/ NOS Madeira - 1.1% 1.1% 1.1% 1.1% ZON Açores/ NOS Açores - 0.6% 0.6% 0.6% 0.6% Vodafone 7.3% 8.1% 8.8% 9.6% 10.3% Grupo Altice % 5.4% 5.3% 5.1% 4.9% Cabovisão 4.9% 4.8% 4.7% 4.6% 4.4% ONITELECOM 0.6% 0.6% 0.6% 0.6% 0.5% Other providers 0.5% 0.5% 0.5% 0.5% 0.4% Unit: % Grupo MEO s share of accesses has been falling over time and has shrunk by 23.6 percentage points since the beginning of 2007 (Graph 3) and by 3.3 percentage points over the last year. 21 There are certain operators w hich are active in specific market segments. The relative position of the operators in this table should in no w ay be taken as an indicator of the quality of the service w hich these operators provide or of their performance in the segments w hich they are active. 22 On 29 December 2014, MEO - Serviços de Comunicações e Multimédia, S.A. w as acquired by PT Comunicações, S.A. - PT Comunicações, S.A. then changed its name to MEO - Serviços de Comunicações e Multimédia, S.A. 23 From 27 January 2014, TMN - Telecomunicações Móveis Nacionais, S.A. changed its name to MEO Serviços de Comunicações e Multimédia, S.A.. 24 On 27 August 2013, ZON Multimédia - Serviços de Telecomunicações e Multimédia, SGPS, S.A. acquired OPTIMUS - SGPS, S.A. (and changed its name to ZON OPTIMUS, SGPS, S.A. 25 On 16 May 2014, ZON TV Cabo Portugal, S.A. w as acquired by Optimus - Comunicações, S.A., and on the same date, Optimus - Comunicações, S.A. changed its name to NOS Comunicações, S.A.. On 24 June 2014, ZON TV Cabo Madeirense changed its name to NOS Madeira Comunicações, S.A. and ZON TV Cabo Açoreana changed its name to NOS Açores Comunicações, S.A., making up Grupo NOS. 26 In August 2013, Altice Holdings S.a.r.l. ("Altice"), shareholder of Cabovisão, acquired exclusive control of Winreason, S.A. ("Winreason"), controller of Onitelecom, by acquiring all shares representing the social capital and subsidiar ies. 11/25

12 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 Graph 3 - Trend in Grupo PT s share of main FTS accesses 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Unit: % 4. Fixed Telephone Service and nomadic VoIP service customers There were around 3.77 million fixed telephone service customers using direct access in 1Q15, 0.5 percent more than reported in the previous quarter and slightly above the upper limit of the forecast range resulting from the estimated historic trend. Compared to 1Q14, the number of customers increased by 2.2 percent. 12/25

13 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 Graph 4 Trend in direct access customers Direct access customers Forecast Forecast range* Unit: Customers Notes: * Forecast range at a significance level of 95 percent. A quadratic trend regression model w as used with the f ollowing significant independent variables at a confidence level of 95 percent: trend, trend squared. Regression equation: Y= , ,8t 1428,3t 2. Modelling from 4Q08. Model adjusted R2 is There has been a sustained increase in the number of customers of this service since 4Q08 (although with a slowdown occurring in 2013). This growth stems from the popularity of bundled offers which include the fixed telephone service, subscription television and/or Internet, with free calls to fixed numbers. Initially, the increase in the service's penetration was driven by offers of alternative providers supported over cable TV networks, but is currently being driven by optical fibre-based offers. Around 8 out of every 10 FTS customers acquired their service as part of a bundle. 13/25

14 Table 7 - Number of FTS and nomadic VoIP customers 1Q14 4Q14 1Q15 1Q15/ 4Q14 Variation 1Q15/ 1Q14 Direct access customers % 2.2% Indirect access customers % -60.0% Pre-selection % -70.1% Call-by-call selection % -4.6% Nomadic VoIP customers % -13.4% Unit: Thousands of customers, % Note: The values presented for pre-selection indirect access customers for 1Q15 report a sharp decline given that one operator w ho presented pre-selection indirect access customers w as incorporated into the supporting operator. The number of indirect access customers continued to fall, following on from the declining trend begun in 2Q06. This trend is explained initially by new tariff offers from the incumbent operator and subsequently by the focus given by new providers to other business models with better prospects for profitability and by new bundled offers which include free calls. The sharp decline reported this quarter follows the incorporation of one of the providers into the respective supporting operator. Meanwhile, as at the end of 1Q15, there were around 51 thousand active nomadic VoIP customers, representing a decline of 2.2 percent over the previous quarter (Table 7 and Graph 5). Since the beginning of 2009, the number of nomadic VoIP customers has been in a downward trend, which can be put down to the migration by one operator of a significant set of its customers to other types of fixed voice telephony solutions. 27 Includes customer receiving SLRO. 14/25

15 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 Graph 5 - Evolution in the number of nomadic VoIP customers Unit: No. of customers In the present quarter, Grupo MEO retained a 49.1 percent share of customers (a decline of 0.7 percentage points compared to 4Q14 and a decline of 2.2 percentage points compared to 1Q14) 28. The share reported by Grupo MEO this quarter is the lowest since liberalisation. Grupo NOS reported a share of 35.4 percent (an increase of 0.4 percentage points versus 4Q14 and a decline of 1 percentage point versus 1Q14). During the quarter being reported, Vodafone remained the third largest provider in terms of direct access customers with a 10.1 percent share (+0.6 percentage points versus 4Q14 and +3 percentage points versus 1Q14). 28 SLRO based offers are reported as direct accesses of the alternative providers. 15/25

16 Table 8 - Provider shares of direct access customers of the Telephone Service at a Fixed Location Q14 2Q14 3Q14 4Q14 1Q15 Grupo MEO 51.3% 51.1% 50.5% 49.8% 49.1% PT Comunicações / MEO % 51.0% 50.4% 49.8% 49.1% TMN / MEO % 0.1% 0.1% 0.1% - Grupo ZON Optimus 32 / NOS % 34.8% 34.8% 35.0% 35.4% ZON Portugal / TV Cabo Optimus/ NOS Comunicações % 32.8% 33.0% 33.4% ZON Madeira/ NOS Madeira - 1.3% 1.3% 1.3% 1.3% ZON Açores/ NOS Açores - 0.7% 0.7% 0.7% 0.7% Vodafone 7.1% 8.0% 8.8% 9.5% 10.1% Grupo Altice % 5.9% 5.7% 5.5% 5.3% Cabovisão 5.9% 5.9% 5.7% 5.5% 5.3% ONITELECOM < 0.05% < 0.05% < 0.05% < 0.05% < 0.05% Other providers 0.2% 0.2% 0.2% 0.2% 0.2% Unit: % 5. Traffic originating on the fixed network Total voice traffic originating 35 on the fixed network during 1Q15 totalled around 1.75 billion minutes and 461 million calls. 29 There are certain operators w hich are active in specific market segments. The relative position of the operators in this table should in no w ay be taken as an indicator of the quality of the service w hich these operators provide or of their performance in the segments w hich they are active. 30 On 29 December 2014, MEO - Serviços de Comunicações e Multimédia, S.A. w as acquired by PT Comunicações, S.A. - PT Comunicações, S.A.. 31 From 27 January 2014, TMN - Telecomunicações Móveis Nacionais, S.A. changed its name to MEO Serviços de Comunicações e Multimédia, S.A.. 32 On 27 August 2013, ZON Multimédia - Serviços de Telecomunicações e Multimédia, SGPS, S.A. acquired OPTIMUS - SGPS, S.A. (and changed its name to ZON OPTIMUS, SGPS, S.A. 33 On 16 May 2014, ZON TV Cabo Portugal, S.A. w as acquired by Optimus - Comunicações, S.A., and on the same date, Optimus - Comunicações, S.A. changed its name to NOS Comunicações, S.A.. On 24 June 2014, ZON TV Cabo Madeirense changed its name to NOS Madeira Comunicações, S.A. and ZON TV Cabo Açoreana changed its name to NOS Açores Comunicações, S.A., making up Grupo NOS. 34 In August 2013, Altice Holdings S.a.r.l. ("Altice"), shareholder of Cabovisão, acquired exclusive control of Winreason, S.A. ("Winreason"), controller of Onitelecom, by acquiring all shares representing the social capital and subsidiaries. 35 Includes national Fixed-Fixed, Fixed-Mobile and Fixed-Short/non-geographic nos. traffic, national calling card traffic, traffic originating from public pay-telephones and outgoing international traffic, through direct access and indirect access (pre-selection and call-by-call selection). 16/25

17 Table 9 - Traffic originating on the fixed network Minutes 36,37 1Q14 4Q14 1Q15 1Q15/ 4Q14 Variation 1Q15/ 1Q14 FTS voice traffic % -13.4% National traffic (voice) % -13.7% National Fixed -Fixed traffic % -14.8% Originating from Public Paytelephones n.a. - - National Fixed -Mobile traffic % -9.7% National traffic: Fixed-short. and nongeographic nos n.a. - - National traffic: calling cards n.a. - - International outgoing traffic % -9.7% Originating from Public Paytelephones n.a. - - Internet access traffic n.a. - - Other traffic originating on fixed network n.a. - - Nomadic VoIP traffic % -29.4% Unit: Thousand of minutes, % Note: The national traffic values reported for Fixed-Short numbers and non-geographic numbers, national traffic using calling cards and other traffic originating on the fixed netw ork w ith respect to 1Q15, are being analysed w ith operators. A breakdow n of traffic originating from Public Pay-telephones is not available for the present quarter.. Compared to 1Q14, FTS volume, in terms of voice minutes, declined by 13.4 percent, with a general reduction reported in all types of traffic except for other traffic originating on the fixed network. An annual reduction in traffic in terms of minutes has been seen since 3Q12, strengthening since 4Q13, and impacting larger providers in particular. Likewise, compared to the previous quarter, the volume of minutes has decreased (falling 5.3 percent). 36 Includes direct and indirect access traffic via pre-selection and call-by-call selection and public pay-telephone traffic, national calling card/pre-paid card traffic etc., traffic to numbers w ith the follow ing prefixes: 800, 802, 808, 809, 884, 707, 708, 760, 761 and 762, minutes of national traffic to short numbers and minutes of other national traffic originating on the fixed telephone netw ork. 37 The traffic values reported in the previous quarter have been amended follow ing updates submitted by certain operators. 17/25

18 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 Meanwhile, the volume of minutes reported in 1Q15 is slightly below the lower limit of the forecast range resulting from the historical change and estimated seasonal effect. The decline in traffic may stem from increased penetration by bundles which include fixed and mobile services. Graph 6 Evolution in FTS voice traffic (minutes) Voice traffic (minutes) Forecast Forecast range* Unit: Thousand of minutes Notes: * Forecast range at a significance level of 95 percent. A regression model w as used with quadratic trend and the follow ing significant independent variables at a confidence level of 95 percent: trend, trend squared, outlier in 2Q04, seasonal dummy relative to the third quarter and event dummies related to 1Q05 (entry of GSM providers), 2Q06 (strong grow th of GSM providers) and 4Q07 (spin-off of PT Multimédia w hich no longer belonged to Grupo PT). Regression equation: Y= , ,8-662,1t ,8T ,1Outlier2Q ,1D1Q ,2DQ ,9D4Q2007. Model s adjusted R2 is The average duration of calls decreased by 2 seconds versus 4Q14, in line with 1Q14. 18/25

19 Table 10 - Average duration of calls by traffic type Q14 2Q14 3Q14 3Q14 1Q15 Voice traffic National traffic National Fixed -Fixed traffic (includes public pay-telephones) of which national traffic originating from public paytelephones n.a. National Fixed -Mobile traffic n.a. National traffic: Fixed-short. and non-geographic nos n.a. National traffic: calling cards n.a. International outgoing traffic (includes public pay-telephones) of which international traffic originating from public paytelephones n.a. Internet access traffic n.a. Other traffic originating on fixed network n.a. Nomadic VoIP traffic Unit: minutes Note: The national traffic values reported for Fixed-Short numbers and non-geographic numbers, national traffic using calling cards and other traffic originating on the fixed netw ork w ith respect to 1Q15, are being analysed w ith operators. A breakdow n of traffic originating from Public Pay-telephones is not available for the present quarter. In 1Q15, 98 minutes per month were consumed on average per access in fixed-fixed calls (8 minutes fewer than in the previous quarter), 10 minutes in fixed-mobile calls (1 minute fewer than in the previous quarter) and 8 minutes in international calls (1 minute fewer than in the previous quarter). 38 The value given for the average duration of Internet access calls in 2Q14 results from the activity of a single provider. The value has been confirmed by this provider. 19/25

20 Graph 7 - Monthly average number of minutes per main access National Fixed-fixed minutes per access National Fixed-mobile minutes per access Minutes to international networks per access Minutes of national calls to short and nongeoographic numbers 1Q15 4Q14 3Q14 2Q14 1Q n.d Unit: minutes Note: The national traffic values reported for Fixed-Short numbers and non-geographic numbers w ith respect to 1Q15 are being analysed w ith operators. When it comes to indirect access, it can be seen that 1 percent of all voice minutes in 1Q15 were originated through indirect access, 0.3 percentage points below the figure reported in the same quarter of 2014 (Table 11). Table 11 - Percentage of traffic routed through indirect access modes of the FTS (minutes) Q14 2Q14 3Q14 4Q14 1Q15 Voice traffic 1.3% 1.2% 1.2% 1.1% 1.0% National Traffic 1.3% 1.2% 1.2% 1.1% 1.0% Outgoing International Traffic 1.2% 1.1% 1.0% 0.9% 0.9% Unit: % 39 Includes direct and indirect access traffic via pre-selection and call-by-call selection. 20/25

21 Provider traffic shares During the quarter being reported, Grupo MEO s share of FTS voice traffic was reported at 50.2 percent, falling by 0.3 percentage points compared to the previous quarter and declining by 1.5 percentage points over the same quarter of Grupo MEO is followed by Grupo NOS with a share of 32.8 percent (falling by 0.5 percentage points compared to the previous quarter and by 1.6 percentage point compared to the same quarter of 2014). Vodafone remains the third largest provider in terms of voice traffic in minutes, with a share of 10.4 percent (increasing by 0.7 percentage points from the previous quarter and by 3.1 percentage points compared to the same quarter of /25

22 Table 12 - Trend in provider shares of FTS voice traffic (Minutes Q14 2Q14 3Q14 4Q14 1Q15 Grupo MEO 51.7% 50.9% 50.8% 50.5% 50.2% PT Comunicações / MEO % 50.7% 50.7% 50.4% 50.2% TMN / MEO % 0.2% 0.2% 0.1% - Grupo ZON Optimus 43 / NOS % 34.3% 33.8% 33.3% 32.8% Optimus / NOS Comunicações % 31.5% 31.1% 30.6% ZON / TV Cabo Portugal ZON Madeira/ NOS Madeira - 1.2% 1.3% 1.2% 1.2% ZON Açores/ NOS Açores - 1.0% 1.0% 1.0% 1.0% Vodafone 7.3% 8.5% 9.1% 9.7% 10.4% Grupo Altice % 4.6% 4.5% 4.4% 4.3% Cabovisão 4.0% 3.9% 3.9% 3.8% 3.7% ONITELECOM 0.8% 0.6% 0.6% 0.6% 0.5% AR Telecom 0.6% 0.6% 0.7% 1.0% 1.1% Colt Telecom 0.7% 0.7% 0.6% 0.7% 0.8% Other providers 0.4% 0.4% 0.4% 0.4% 0.5% Unit: % 40 There are certain operators w hich are active in specific market segments. The relative position of the operators in this table should in no w ay be taken as an indicator of the quality of the service w hich these operators provide or of their performance in the segments w hich they are active. 41 On 29 December 2014, MEO - Serviços de Comunicações e Multimédia, S.A. w as acquired by PT Comunicações, S.A. - PT Comunicações, S.A. then changed its name to MEO - Serviços de Comunicações e Multimédia, S.A. 42 From 27 January 2014, TMN - Telecomunicações Móveis Nacionais, S.A. changed its name to MEO - Serviços de Comunicações e Multimédia, S.A.. 43 On 27 August 2013, ZON Multimédia - Serviços de Telecomunicações e Multimédia, SGPS, S.A. acquired OPTIMUS - SGPS, S.A. (and changed its name to ZON OPTIMUS, SGPS, S.A. 44 On 16 May 2014, ZON TV Cabo Portugal, S.A. w as acquired by Optimus - Comunicações, S.A., and on the same date, Optimus - Comunicações, S.A. changed its name to NOS Comunicações, S.A.. On 24 June 2014, ZON TV Cabo Madeirense changed its name to NOS Madeira Comunicações, S.A. and ZON TV Cabo Açoreana changed its name to NOS Açores Comunicações, S.A., making up Grupo NOS. 45 In August 2013, Altice Holdings S.a.r.l. ("Altice"), shareholder of Cabovisão, acquired exclusive control of Winreason, S.A. ("Winreason"), controller of Onitelecom, by acquiring all shares representing the social capital and subsidiaries. 22/25

23 6. FTS revenues and monthly charge Revenues derived from FTS and from bundles of services which include the FTS, totalled 448 million euros by the end of 1st quarter of Of this value, 92 million euros (20.6 percent) corresponds to stand-alone FTS offers, 34 million euros (7.6 percent) corresponds to double-play bundles and 322 million euros (71.8 percent) corresponds to triple-play, quadruple-play and quintuple-play bundles. Compared to the same period of 2014, stand-alone FTS revenues declined by 21.5 percent. In the following table, the variations reported in total and unit revenues, in particular as regards triple/quadruple/quintuple-play bundles, partly reflect the inclusion, as of the present quarter, of the mobile component of bundles sold by MEO, following the merger that took place at the end of Up until 4Q14, revenues derived from the mobile component of bundles sold by MEO w ere 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 such the values reported for rev enues from bundles are not comparable w ith previously reported values. 23/25

24 Table 13 - FTS revenues and revenues from bundles which include FTS January March 2014 January March 2015 % % YoY Variation Separable FTS revenues % % -21.5% Revenues from subscriptions and installation charges % % -15.2% Revenues from calls and SMS originating on fixed network % % -27.2% Revenues from multiple-play with FTS % % 34.8% Revenues from Double-Play offers % % -14.3% Revenues from 3, 4 and 5-Play offers % % 43.4% Total Revenues % % 17.4% Units: thousands of euros, % Note 1: During 2Q14, changes w ere made to the accounting criteria for bundles comprising mobile phone internet access. According to the new criteria, providers reporting bundles consider the "mobile phone internet" traffic plafond as an additional service. How ever, the number of bundles and revenues reported for prior periods have not been changed ac cordingly, so that 4Q2014 revenues are not comparable w ith revenues reported in prior periods. Note 2: The data reported w ith regard to revenues from calls and SMS originating on fixed netw ork do not include other revenue. Note 3: Up until 4Q14, revenues derived from the mobile component of bundles sold by MEO w ere 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 such the values reported for revenues from bundles are not comparable w ith previously reported values. In the case of residential customers, and according to Marktest's Barómetro de Telecomunicações (Telecommunications Barometer), the average monthly charge in 1Q15 was 13.9 euros, 4.5 percent more than in the previous quarter and 4.8 percent less than a year earlier. 47 Does not include "other revenues", such as revenues derived from equipment sales. 48 Includes revenues derived from local, regional and national communications, fixed -mobile calls (originated on fixed network), outgoing international traffic originated on fixed network, revenues from public paytelephones, revenues from SMS originated on fixed network, revenues from virtual calling card traffic originated on fixed network, revenues from freephone traffic (800 prefix), revenues from shared cost calls (800 and 809 prefixes), revenues from traffic to personal number services (884 prefix), revenues from traffic to universal access services (707 and 708 prefixes), revenues from traffic to flat-rate services (760,761 and 762 prefixes) and revenues from traffic to short numbers. 24/25

25 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Euros Graph 8 Average monthly spend on FTS (stand-alone) Unit: Euros Source: MARKTEST - Barómetro de Telecomunicações (Telecommunications Barometer) Base: Homes w ith fixed voice service not receiving service as part of a bundle Marktest's Barómetro de Telecomunicações (Telecommunications Barometer) also provides information on how average monthly expenditure by households on multiple-play offers has changed. In 1Q15, average monthly expenditure by households on bundled offers which include the FTS range between 76.1 euros in the case of FTS+MTS+FBB+MBB+STV bundles (-0.7 percent versus 4Q14) and 30.1 euros in the case of FTS+FBB bundles (+4 percent versus 4Q14). The FTS+STV bundle had an average monthly charge of 31.2 euros (+8.3 percent versus 4Q14), the FTS+FBB+STV bundle 45.8 euros (+0.7 percent versus 4Q14), the FTS+FBB+MBB+STV bundle 47 euros (-9.5 percent versus 4Q14) and the FTS+MTS+FBB+STV bundle had an average monthly charge of 67.2 euros (+0.3 percent versus 4Q14). 25/25