BUNDLED SERVICES FOR ELECTRONIC COMMUNICATIONS. Version 1 /

Transcription

1 BUNDLED SERVICES FOR ELECTRONIC COMMUNICATIONS 2017 ANACOM, April 2018 Version 1 /

2 Contents Summary Introduction Providers with bundled services deals Structure of deal and change of provider Principled changes to the commercial deals for bundled services in Number of subscribers Revenues Penetration of bundled services Value of the services integrated in bundles Bundled services for electronic communications /27

3 Index of graphs Graph 1 - Trends in the number of providers that reported statistical information on bundled deals... 6 Graph 2 Intention to switch provider of the bundled service in the ensuing three months by residential customers Graph 3 Binding contract period in bundled offers Graph 4 Distribution of the number of subscribers of bundled services, by type Graph 5 Trends in number of bundled services subscribers and forecast range Graph 6 New subscribers of bundled services (in net terms) Graph 7 Average monthly invoice for residential customers with multiple play deals Graph 8 Average monthly invoice for residential customers with multiple play deals, by type Graph 9 Trends in the penetration of bundled services subscribers Index of tables Table 1 - Entities that reported statistical information on bundled services - end of Table 2 Number of providers that reported statistical information by type of deal... 8 Table 3 Shares of subscribers of services provided in multiple play bundles... 9 Table 4 Shares of subscribers of services provided in bundles by type end of Table 5 Shares of revenues from services provided in a multiple play bundle Table 6 Shares of revenues from services provided in bundles by type end of Table 7 Number of subscribers of bundled services, by type Table 8 Quarterly trends in bundled services subscribers, by type Table 9 Revenue from bundled services, by type Table 10 Average monthly revenue per bundled services subscriber, by type Table 11 Penetration rate of subscribers of bundled services per 100 families, by type Table 12 Value of the integrated services in bundles as considered by consumers Bundled services for electronic communications /27

4 Summary Bundled services subscribers reached 3.74 million The number of bundled services subscribers reached 3.74 million at the end of 2017 (+222 thousand or +6.3 percent than at the end of the previous year) 1. In recent years, growth in the number of bundled services subscribers has been slowing, in part linked to the high penetration rate attained. At the end of 2017, the number of bundled services subscribers was equivalent to 91.6% of private households 2. The growth which occurred during 2017 resulted in an increase in the number of 5P bundle subscribers FTS+FBB+STV+MBB+MTS (+8.9%), the 3P bundle - FTS+FBB+STV (+7.5%) and to a lesser extent the 2P bundle - STV+MBB. 5P is the most popular bundle; convergent bundles 3 accounted for 47% of the total The most popular bundled deals continued to be the 5P offer with million subscribers (42.0%), followed by the 3P offer FTS+FBB+STV, with million subscribers (40.9%). Convergent bundles reached 1.76 million subscribers (+10% than at the end of 2016) to represent 47% of bundled offers. Revenues increased 4.9% and unit revenue decreased 2.2% Revenues from bundled services reached around million euros in 2017 (+4.9% than in 2016). Revenues from 5P bundles accounted for 57% of the total. 1 The bundled deals analysed in this chapter contain at least one fixed electronic communications service. Therefore, any bundled deals made up entirely of mobile services (MTS+MBB) are excluded from this analysis. 2 According to INE (Statistics Portugal), private household is the set of persons who live in the same accommodation and who have relations of kinship (de jure or de facto) with each other and they can occupy all or part of the accommodation. Any independent person who occupies a part or the whole of a housing unit is also considered as a private household (See 3 Packages that combine services provided at a fixed location with mobile services. Bundled services for electronic communications /27

5 In 2017, the average monthly invoice per subscriber per bundle, which includes both residential and non-residential customers, was not including VAT (-2.2% than in 2016). According to data from the Marktest's Telecommunications Barometer 4, the average monthly invoice for residential customers was 52.24, including VAT (-0.8% than in 2016), thus reversing the upward trend which had been recorded in recent years. MEO leads; Vodafone was the provider which most increased its share In terms of the number of subscribers, and at the end of 2017, MEO had the highest share of bundled services subscribers (40.1% at the end of 2017), followed by the NOS Group (38.0%), Vodafone (17.0%) and the Apax Group 5 (4.8%). Vodafone was the provider that most increased its share of subscribers during 2017, +1.1 percentage points (p.p.) and MEO attracted most subscribers in net terms (+102 thousand). 1. Introduction This report shows the development in bundled offers (multiple play) which took place in A bundle is understood to mean a commercial deal which includes two or more services marketed as a single deal and with a single invoice 6. 4 The Telecommunications Barometer (BTC) is a regular study developed by Marktest for the telecommunications sector. The population of the Telecommunications Barometer Fixed Network (Barómetro de Telecomunicações Rede Fixa) is made up of households in mainland Portugal and in the Autonomous Regions of Madeira and Azores. A sample is compiled on a monthly basis which is proportional to and representative of the study's respondents, corresponding to 1,150 interviews per month. The population of the Telecommunications Barometer Mobile Network (Barómetro de Telecomunicações Rede Móvel) comprises people aged 10 and over living in mainland Portugal and in the Autonomous Regions of Madeira and Azores. A sample is compiled on a monthly basis which is proportional to and representative of the study's respondents, corresponding to 1,200 interviews per month. Analysis of the BTC data is made for a quarterly period. The sample of households provides an absolute maximum margin of error of 1.7 p.p. (questions put to all households) and the sample of individuals 10 years of age and over ensures an absolute maximum margin of error of 1.6 p.p. (questions put to all individuals). 5 Covers Onitelecom and NOWO. 6 The bundled deals analysed in this chapter contain at least one fixed electronic communications service. Therefore, any bundled deals made up entirely of mobile services (MTS+MBB) are excluded from this analysis. Bundled services for electronic communications /27

6 It should be noted that, during the period considered in this analysis, the concept of bundle used was altered for the collection of indicators 7. This should be considered whenever comparisons between different time periods are made. The bundle offers combine voice services telephone service at a fixed location (FTS) and mobile telephone service (MTS), access to the Internet fixed broadband (FBB) and mobile broadband (MBB), and the subscription television signal distribution service (STV). In turn, MBB is divided into mobile phone Internet deals and Internet access deals through PC/tablet. The following sections show the available information about the penetration of bundled services, the number of subscribers, value of revenues, the structure of the supply and change of provider. Wherever possible, the indicators shown are disaggregated according to the number of services integrated within the bundle (double play, triple play, quadruple play or quintuple play or 2P, 3P, 4P and 5P) and the combination of services in each bundle (for example FTS+FBB, FTS+FBB+STV or FTS+MTS+FBB+MBB+STV) 8,9. The sources of information used were the following: Quarterly statistics reported by providers to ANACOM on a quarterly basis; Marktest's Telecommunications Barometer (BTC) 10 ; 7 Until 2010, service bundles comprised all commercial deals from a single operator which included two or more services, and which had an integrated tariff and a single invoice. From 2011, a bundle was redefined to mean a commercial deal from a single operator which includes two or more services marketed as a single deal and with a single invoice. As of 2014, the reference to single operator was eliminated (see ANACOM Determination of : Until the 2nd quarter of 2014, the bundles reported by the providers did not consider the Mobile phone Internet traffic ceiling as an additional service. The situation was changed as of the 2nd quarter of However, the number of subscribers and the revenues from bundles from previous periods have not changed in accordance with this understanding. This change in the concept of bundled used for collecting indicators should be taken into consideration whenever comparisons are made between values before and after FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called Mobile phone Internet ). 9 The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers Mobile phone Internet as an autonomous mobile broadband Internet access service. 10 The Telecommunications Barometer (BTC) is a regular study developed by Marktest for the telecommunications sector. The population of the Telecommunications Barometer Fixed network (Barómetro de Telecomunicações Rede Fixa) is made up of households in mainland Portugal and in the Autonomous Regions of Madeira and Azores. A sample is compiled on a monthly basis which is proportional Bundled services for electronic communications /27

7 2. Providers with bundled services deals At the end of 2017, 11 providers reported statistical information on bundled services deals for electronic communications 11 (Graph 1). Graph 1 - Trends in the number of providers that reported statistical information on bundled deals Unit: number of providers The entities that made this type of commercial deal available are listed in Table 1. to and representative of the study's respondents, corresponding to 1,150 interviews per month. The population of the Telecommunications Barometer Mobile Network (Barómetro de Telecomunicações Rede Móvel) comprises people aged 10 and over living in mainland Portugal and in the Autonomous Regions of Madeira and Azores. A sample is compiled on a monthly basis which is proportional to and representative of the study's respondents, corresponding to 1,200 interviews per month. Analysis of the BTC data is made for a quarterly period. The sample of households provides an absolute maximum margin of error of 1.7 p.p. (questions put to all households) and the sample of individuals 10 years of age and over ensures an absolute maximum margin of error of 1.6 p.p. (questions put to all individuals). 11 The bundled deals analysed in this chapter contain at least one fixed electronic communications service. Therefore, any bundled deals made up entirely of mobile services (MTS+MBB) are excluded from this analysis. Bundled services for electronic communications /27

8 Table 1 - Entities that reported statistical information on bundled services - end of 2017 Company Name COLT Technology Services, Unipessoal, Lda. CYCLOP NET Informática e Telecomunicações, Lda. IPTV TELECOM Telecomunicações, Lda. MEO Serviços de Comunicações e Multimédia, S.A. 12 NOS Açores Comunicações, S.A 13 NOS Madeira Comunicações, S.A 13 NOS Comunicações, S.A. 13 NOWO COMMUNICATIONS, S.A. 14, 15 ONITELECOM Infocomunicações, S.A. 15 PINKHAIR - Unipessoal, Lda. VODAFONE PORTUGAL Comunicações Pessoais, S.A. 12 On 29 December 2014, the merger by incorporation of MEO - Serviços de Comunicações e Multimédia, S.A. into PT Comunicações, S.A. took place and the company's name changed to MEO - Serviços de Comunicações e Multimédia, S.A. On 2 June 2015, Altice completed the acquisition of 100% of the share capital of PT Portugal, SGPS, owners of MEO - Serviços de Comunicações e Multimédia S.A. Consequently, the European Commission required Altice to disinvest from ONI and Cabovisão. 13 On 16 May 2014, the company ZON TV Cabo Portugal, S.A. was incorporated by merger, within the company Optimus - Comunicações, S.A. (incorporating company). Also on this 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., to form the NOS Group. 14 From 18 October 2016, Cabovisão Televisão por Cabo S.A. changed its name to Nowo Communications, S.A. 15 The former Cabovisão and Onitelecom were acquired by the APAX Group in 2015: on 2 June 2015, Altice completed the acquisition of 100% of the share capital of PT Portugal, SGPS, which owns MEO - Serviços de Comunicações e Multimédia S.A., and the European Commission imposed the divestment of Altice on ONI and Cabovisão. On 15 September 2015, Altice announced that it had agreed with the investment fund APAX France to divest its Portuguese operators, ONI and Cabovisão (the transaction would have to be subject to approvals from the European Commission and Portuguese Authorities). On 12 October 2015, the Competition Authority was notified of the acquisition of sole control of Cabovisão-Televisão por Cabo, Winreason and Oni SGPS by Cabolink, a company controlled by Apax Partners Midmarket S.A. and by Apax France. On 11 November 2015, the ERC ruled that it was not opposed to the merger operation; on 27 November 2015, the Competition Authority also decided not to oppose the same transaction. On 21 December 2015, it was reported that the European Commission had approved Apax as an appropriate buyer for Cabovisão and Oni. On 20 January 2016, Altice announced the conclusion of the transfer of ONI and Cabovisão to the Apax France investment fund. Bundled services for electronic communications /27

9 These entities include the four major electronic communications operators which provide wide-area networks and generalized offers for all segments (MEO, NOS, Vodafone and NOWO). There are also smaller operators that operate in specific geographic segments or which provide services to the business sector. Table 2 shows the development in the number of providers per type of bundle. Table 2 Number of providers that reported statistical information by type of deal double play bundles of which: FTS+FBB of which: FTS+STV triple play bundles of which: FTS+FBB+STV quadruple/quintuple play bundles quadruple play bundles quintuple play bundles Multiple play Unit: number of providers Note: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called Mobile phone Internet ). From 2013, the providers with mobile networks (MEO, Vodafone and NOS) started offering bundles which included MBB and MTS. In May 2016, Cabovisão/NOWO also started offering convergent bundles 16. In 2017, PINKHAIR offered FBB+STV bundles for the first time (1Q2017). Furthermore, in October 2017, STV, which offered 2P and 3P packages, transferred its customer base to NOWO. 16 Packages that combine services provided at a fixed location with mobile services. Bundled services for electronic communications /27

10 3. Structure of deal and change of provider In terms of subscribers, at the end of 2017, MEO was the main provider of bundled services, with a share of 40.1%, followed by the NOS Group (38.0%), Vodafone (17.0%) and the Apax Group 17 (4.8%) See Table 3. Vodafone was the provider that most increased its share of subscribers during 2017 (+1.1 p.p.) and MEO attracted most subscribers in net terms (+102 thousand). Table 3 Shares of subscribers of services provided in multiple play bundles Annual var. (p.p.) MEO 39.7% 40.1% 0.4 Grupo NOS 39.3% 38.0% -1.3 NOS Comunicações 36.8% 35.5% -1.3 NOS Madeira 1.7% 1.7% 0.0 NOS Açores 0.8% 0.8% 0.0 Vodafone 15.9% 17.0% 1.1 Grupo Apax 5.0% 4.8% -0.1 NOWO 5.0% 4.8% -0.1 Onitelecom 0.0% 0.0% 0.0 Other providers 0.0% 0.0% 0.0 Unit: %, p.p. Note 1: There are operators which work in specific segments of the market. The relative position they occupy in this table should not be interpreted as an indicator of the quality of the services provided or the performance of these operators in the segments in which they operate. Note 2: The variation shown may not correspond exactly to the values in the table due to rounding up. In 2017, the level of concentration decreased (i.e. the Herfindahl-Hirschman index 18 was in 2017, a value lower than that registered at the end of 2016). 17 Covers Onitelecom and NOWO. 18 The Herfindahl-Hirschman Index (HHI) is often applied by the European Commission to assess market concentration levels. This index is calculated by adding the squares of the individual market shares of all market participants. Its theoretical values range from approximately zero (in a fragmented market) to 10,000 (in the case of an absolute monopoly). When the HHI is greater than 1,800 the market is considered to be extremely concentrated. Between 1,000 and 1,800 the market is considered as moderately concentrated. Bundled services for electronic communications /27

11 According to available information, and considering the share of subscribers, the NOS Group continues to lead in the 3P and 4P bundles (with shares of 35.5 and 72.5%, respectively), while MEO led in the 2P and 5P bundles (43.8 and 47.8%, respectively) See Table 4. During 2017, and according to the type of bundle, the providers who most increased their shares were: MEO in the 2P bundles (+6.7 p.p.), mainly in the STV+MBB type; Vodafone with respect to 3P bundles (+1.9 p.p.); and NOS in 5P bundles (+2.1 p.p.), in part due to the upgrade of 4P offers. Table 4 Shares of subscribers of services provided in bundles by type 19 end of 2017 Unit: % Multiple play Double play Triple play Quadruple play Quintuple play MEO 40.1% 43.8% 33.2% 9.1% 47.8% Grupo NOS 38.0% 31.5% 35.5% 72.5% 40.4% NOS Comunicações 35.5% 29.7% 32.9% 35.7% 40.1% NOS Madeira 1.7% 1.3% 1.8% 23.3% 0.3% NOS Açores 0.8% 0.6% 0.8% 13.5% 0.0% Vodafone 17.0% 17.0% 25.9% 7.1% 8.9% Grupo Apax 4.8% 7.5% 5.5% 11.2% 2.9% NOWO 4.8% 7.5% 5.5% 11.2% 2.9% Onitelecom 0.0% 0.0% : : : Other providers 0.0% 0.2% : : : Note: There are operators which work in specific segments of the market. The relative position they occupy in this table should not be interpreted as an indicator of the quality of the services provided or the performance of these operators in the segments in which they operate. In terms of revenue, at the end of 2017, MEO was the main provider of bundled services, with a share of 41.2%, followed by the NOS Group (40.4%), Vodafone (15.0%) and the Apax Group 20 (3.3%) See Table The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers Mobile phone Internet as an autonomous mobile broadband Internet access service. 20 Covers Onitelecom and NOWO. Bundled services for electronic communications /27

12 Table 5 Shares of revenues from services provided in a multiple play bundle Annual var. (p.p.) MEO 43.1% 41.2% -1.9 Grupo NOS 39.1% 40.4% 1.3 NOS Comunicações 36.8% 37.9% 1.1 NOS Madeira 1.6% 1.7% 0.1 NOS Açores 0.7% 0.8% 0.1 Vodafone 13.5% 15.0% 1.5 Grupo Apax 4.2% 3.3% -0.9 NOWO 4.2% 3.3% -0.9 Onitelecom 0.0% 0.0% 0.0 Other providers 0.0% 0.0% 0.0 Unit: %, p.p. Note: There are operators which work in specific segments of the market. The relative position they occupy in this table should not be interpreted as an indicator of the quality of the services provided or the performance of these operators in the segments in which they operate. The NOS Group had the highest share of revenues from 3P and 4P bundles (38.6 and 78.8%, respectively) while MEO led the 2P and 5P bundles share of revenues (39.6 and 48.1%, respectively) See Table 6. Table 6 Shares of revenues from services provided in bundles by type end of 2017 Unit: % Multiple play Double play Triple play Quadruple play Quintuple play MEO 41.2% 39.6% 32.7% 8.6% 48.1% Grupo NOS 40.4% 32.1% 38.6% 78.8% 40.2% NOS Comunicações 37.9% 30.0% 35.4% 44.4% 39.9% NOS Madeira 1.7% 1.4% 2.2% 23.0% 0.2% NOS Açores 0.8% 0.6% 1.0% 11.5% 0.0% Vodafone 15.0% 18.4% 23.8% 7.4% 10.2% Grupo Apax 3.3% 9.4% 4.8% 5.2% 1.5% NOWO 3.3% 9.4% 4.8% 5.2% 1.5% Onitelecom 0.0% 0.0% : : : Other providers 0.0% 0.5% 0.0% : : Note: There are operators which work in specific segments of the market. The relative position they occupy in this table should not be interpreted as an indicator of the quality of the services provided or the performance of these operators in the segments in which they operate. Bundled services for electronic communications /27

13 As can be seen, the revenue shares of MEO and NOS (Table 5) are higher than their respective shares of subscribers (Table 3), whereas in the case of Vodafone and NOWO the opposite is the case. This is due to the different unit revenues of the various providers which are influenced by the different subscriber structures See Graph 4 (i.e. providers with a large number of 4P and 5P customers will, all else being the same, have higher revenues), and by the different levels of prices practised (i.e. providers which charge lower monthly payments will, all things being the same, have lower revenues). These factors, together with the diverse levels of customer attraction, also justify the different - and sometimes opposite - changes in revenues and subscribers. Change of provider According to Marktest's Telecommunications Barometer, at the end of 2017 around 5.5% of bundled services residential customers indicated that they intended to change providers in the next three months (-2.2 p.p. than in the previous year) and 71.3% mentioned that they had no intention of doing so (a value similar to that of previous years) See Graph 2. Over the same period, the reasons cheaper price/ lower prices and single operator in the area / it is what works best in the area continued to be the two main reasons for selecting the bundled services provider (27.2% and 7.9%, respectively). Bundled services for electronic communications /27

14 Graph 2 Intention to switch provider of the bundled service in the ensuing three months by residential customers ,3 65,9 71,4 69,9 71,3 No intention of changing provider in the next three months (10) Indecision (5 to 9 and Ns/Nr) 20 0 Unit: % 31,2 28,1 22,0 22,4 23,2 6,5 5,9 6,6 7,7 5,5 4Q2013 4Q2014 4Q2015 4Q2016 4Q2017 Evidence of intention to change provider in the next three months (1 to 4) based on microdata from the Marktest BTC, 4Q2013 to 4Q2017 Base: Homes with bundled contracted services. Note 1: The original response scale is: 1 It will change for sure...,10 It will not change for sure. Note 2: All estimates are reliable 21 Note 3: The upward-pointing arrow refers to a statistically significant increase between the t-1 and t moments and the downward-pointing arrow translates into a statistically significant decrease between these two movements, through the statistical test of the difference between two proportions for large and independent samples, assuming a confidence level of 95%. Of note is that in February , 20% of homes with bundled services had exceeded the binding contract period of the contract and 9% did not have a binding contract period associated with the contract (Graph 3). 21 The coefficient of variation is used as a sampling error indicator, based on the variance of the proportion estimator of a simple random sample. The following classification is considered: reliable estimate when the coefficient of variation is less than 10%; acceptable estimate where the coefficient of variation is greater than or equal to 10% and less than 25%; unreliable estimate when the coefficient of variation is greater than or equal to 25%. The accuracy of the estimates does not only depend on the size of the sample, but is also influenced by the value of the estimate itself (for example, for a fixed size sample, the reliability measured by the coefficient of variation is smaller the smaller the estimate value). 22 Additional question included in Marktest s Telecommunications Barometer in February Bundled services for electronic communications /27

15 Graph 3 Binding contract period in bundled offers No binding contract period 9%* Already passed the binding contract period 20% Binding contract period in force 71% 24 months 57% 12 months 12% 6 months 2%* Unit: % based on microdata from the Marktest BTC, monthly data February Base: Homes with contracted bundled services (does not include non-responses). Note 1: The rate of non-responses to this question was high (18%) and is not included in the figures presented. Note 2: Key to estimates: (#) Unreliable estimate; (*) Acceptable estimate; (no sign) Reliable estimate Principled changes to the commercial deals for bundled services in 2017 During 2017, the offers of the four main providers underwent some changes, of which the following were particularly of note: Introduction of new 4P offers without fixed telephony and 2P deals that include STV by satellite TVS and a mobile broadband card for PC/tablet with 1 GB; Some providers launched fixed broadband deals with 1 Gbps download speed and 200 Mbps upload speed, firstly for 4P and 5P deals and then for 2P and 3P deals; 23 The following classification is considered: reliable estimate when the coefficient of variation is less than 10%; acceptable estimate where the coefficient of variation is greater than or equal to 10% and less than 25%; unreliable estimate when the coefficient of variation is greater than or equal to 25%. The accuracy of the estimates does not only depend on the size of the sample, but is also influenced by the value of the estimate itself (for example, for a fixed size sample, the reliability measured by the coefficient of variation is smaller the smaller the estimate value). Bundled services for electronic communications /27

16 These bundled offers with integrated mobile services also include 30 GB of Internet traffic through PC/tablet and 10 GB per card for mobile Internet which added 20 GB for specific apps (option which initially required an additional payment); Launch of a new 5P bundle for residents in areas covered by satellite (DTH) by MEO. This new bundle offers Internet access speeds up to 40Mbps download and 4Mbps upload, with this service being supported on the LTE network. Some 2P deals were eliminated. Vodafone eliminated one of the deals for FTS+FBB through LTE at a fixed location and NOWO eliminated its FBB+STV deal, to market an FTS+FBB+STV deal at euros per month without a box included (this is the lowest publicly announced monthly fee currently available) Number of subscribers The number of bundled offers subscribers reached 3.74 million at the end of 2017, 222 thousand more or 6.3% greater than in the previous year. (Table 7). In annual terms, the growth in the number of bundled services subscribers has been slowing, with growth in 2017 being lower than in 2016 (266 thousand subscribers more or +8.2%) and, on average, than the growth verified in the 2013/2017 period. This slowdown is in part associated with the high rate of penetration of bundled services. 24 This monthly fee does not include fixed voice traffic and offers 33 STV channels and 100 Mbp download speed. Bundled services for electronic communications /27

17 Table 7 Number of subscribers of bundled services, by type Var. 2016/ 2017 Average annual var. 2013/2017 Accumulat ed var. 2013/2017 double play bundles % -5.0% -18.4% of which: FTS+FBB % 4.2% 18.0% of which: FTS+STV % -14.0% -45.3% of which: STV+MBB 0 64 : : : triple play bundles % : : of which: FTS+FBB+STV % -5.6% -20.8% quadruple/quintuple play bundles % : : of which: FBB+FTS+STV+MTS+MBB % : : Multiple play % 9.2% 42.2% Units: thousands of subscribers, % Note: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called Mobile phone Internet ). The trends in the number of bundled services subscribers resulted mainly from the increase in the number of subscribers to the 5P bundles (+128 thousand subscribers or +8.9% in the last 12 months), the FTS+FBB+STV bundle (+107 thousand subscribers or +7.5%) and, to a lesser extent, the STV+MBB bundle (+64 thousand subscribers). This latter type was launched by a provider in 2Q2017. At the end of 2017, the 5P offer (FBB+FTS+STV+MTS+MBB) was the most used, reaching million subscribers (42% of the total), followed by the FTS+FBB+TVS offer, with million subscribers (40.9%) and the FTS+STV offer with 232 thousand subscribers (6.2%) See Graph The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers so-called Mobile phone Internet as an autonomous mobile broadband Internet access service. Bundled services for electronic communications /27

18 Graph 4 Distribution of the number of subscribers of bundled services, by type P 14,2 13,9 4Q2016 FTS+FBB FTS+STV 3P FTS+FBB+STV 4/5P 5P 5,2 4,8 7,8 6,2 4Q ,1 41,3 40,4 40,9 44,6 44,8 41,0 42,0 Unit: % Note: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service Convergent bundles 27 reached 1.76 million subscribers (+10% more than the end of 2016), now representing 47% of bundled services offers. Most 4P/5P subscribers have more than one mobile card integrated into their bundled services. According to Marktest's Telecommunications Barometer data for 4Q2017, approximately 42.2% of mobile telephone service (data/voice) customers aged 15 or over subscribed to the integrated service in a bundle with other fixed services. 26 The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers so-called mobile phone Internet as an autonomous mobile broadband Internet access service. 27 Bundles that combine services provided at a fixed location with mobile services. Bundled services for electronic communications /27

19 4Q2011 4Q2012 4Q2013 4Q2014 4Q2015 4Q2016 4Q2017 Quarterly trends in the number of subscriptions In overall terms, the number of subscribers recorded in 2017 was greater than what would be expected given the recent historical trend (Graph 5). This situation is partially explained by the launch of the new type of 2P bundle (STV+MBB) by MEO 28. Graph 5 Trends in number of bundled services subscribers and forecast range Subscribers of bundled services Forecast Forecast range Unit: thousands of subscribers Note 1: Forecast range with a significance level of 95%. Note 2: A non-linear logistic model was used Y= ,500,148/(1+exp( *(t-11,592))). The modelling was carried out as of the 2nd quarter of Forecast range with a significance level of 95% and adjusted R 2 of An analysis of 2017 disaggregated by quarter shows that in the 1st and 4th quarters of 2017, the growth verified was the lowest in recent years (+35 thousand subscribers or +1% and +40 thousand subscribers or +1.1 %, respectively) - See Graph Single play STV satellite deals with the possibility of adding a Mobile Internet Card with 1 GB included for use in equipment with access to the MEO network. Bundled services for electronic communications /27

20 Graph 6 New subscribers of bundled services (in net terms) Units: thousands of subscribers, % Table 8 Quarterly trends in bundled services subscribers, by type 29 Net additions Relative var. (%) Structure (%) 1Q2017 2Q2017 3Q2017 4Q2017 1Q2017 2Q2017 3Q2017 4Q2017 1Q2017 2Q2017 3Q2017 4Q2017 4Q2011 4Q2012 4Q2013 4Q2014 4Q2015 4Q2016 4Q Quarterly net addition 1,9% 1,8% 1,6% 1,5% 1,9% 2,1% 2,8% 2,5% 2,6% 2,2% 2,1% 2,2% 1,7% 1,4% 1,0% 1,1% 2,1% 1,8% 2,7% 2,3% 3,2% 3,8% 3,4% 3,3% 5,2% 240 6% % 4% 3% 2% 1% 0% Quarterly relative variation (%) double play bundles of which: FTS+FBB of which: FTS+STV of which: STV+MBB > triple play bundles of which: FTS+FBB+STV quadruple/quintuple play bundles of which: FBB+FTS+STV+MTS+MBB Multiple play Units: thousands of subscribers, % Note: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called Mobile phone Internet ). 29 The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers mobile phone Internet as an autonomous mobile broadband Internet access service. Bundled services for electronic communications /27

21 6. Revenues Revenues from bundled services reached around million euros in 2017 (+4.9% than in 2016) See Table 9. The growth rate of revenues from bundles since the beginning of 2017 has been significantly lower than that registered in previous periods (in 4Q2016 revenues had risen 11.5% and in 4Q2015 around 29.8%). Revenues from 5P bundles accounted for 57% of the total. Table 9 Revenue from bundled services, by type Var. 2016/2017 (%) Weighting (%) 2017 double play bundles % 7.5 of which: FTS+FBB % 2.6 of which: FTS+STV % 3.8 triple play bundles % 31.7 of which: FTS+FBB+STV % 31.0 quadruple/quintuple play bundles % 60.8 of which: FBB+FTS+STV+MTS+MBB % 57.4 Multiple play % Units: thousands of euros (excluding VAT), % Note 1: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called mobile phone Internet ). Note 2: The individualized revenues of the bundled mobile services are not counted, except for the additional card monthly fees. Note 3: The definition of revenue from bundled services was changed in 2015, so comparable information is only available since that date. On average, the monthly revenue per subscriber in 2017, which includes residential and non-residential customers, was euros, excluding VAT (-2.2% than in 2016). All the most subscribed types showed a drop in monthly revenue per subscriber (Table 10). 30 The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers so-called mobile phone Internet as an autonomous mobile broadband Internet access service. Bundled services for electronic communications /27

22 Table 10 Average monthly revenue per bundled services subscriber, by type Var. 2016/2017 (%) double play bundles % of which: FTS+FBB % of which: FTS+STV % triple play bundles % of which: FTS+FBB+STV % quadruple/quintuple play bundles % of which: FBB+FTS+STV+MTS+MBB % Multiple play % Unit: euros (excluding VAT), % Note 1: For both periods, the calculation of average monthly revenue used the average number of subscribers in the respective year. Note 2: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called mobile phone Internet ). Note 3: The definition of revenue from bundled services was changed in 2015, so comparable information is only available since that date. Average monthly household bill According to Marktest's Telecommunications Barometer, in 2017 the average monthly household bill for residential customers with bundled deals was euros, including VAT. The average bill decreased 0.8% compared to the previous year, thus reversing the upward trend that had been recorded in recent years (Graph 7). 31 The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers mobile phone Internet as an autonomous mobile broadband Internet access service. Bundled services for electronic communications /27

23 Graph 7 Average monthly invoice for residential customers with multiple play deals % 49, % 51, % -0.8% 52,63 52,24 47, Unit: euros (with VAT included) based on microdata from the Marktest BTC, from 2013 to Base: Total households with multiple play bundles (does not consider non-responses) Note 1: The relative error margins for the averages are less than 1%. Note 2: The annual variation refers to the variation of average expenditure by residential customers with bundled services, reflecting the annual variation of the price of the bundled services as well as the variation of the quality associated with the deals (for example, number of channels, download speed, new services, among others) and the consumption pattern of the users. The average monthly invoice for the most used bundles (FTS+MTS+FBB+STV 32 and FTS+STV+FBB) decreased 3% and 4.8%, respectively (Graph 8). 32 This may include the so-called mobile phone Internet within Marktest's Telecommunications Barometer. Bundled services for electronic communications /27

24 Graph 8 Average monthly invoice for residential customers with multiple play deals, by type FTS+MTS+FBB+MBB+STV 75,07 75,47 FTS+MTS+FBB+STV 65,82 63,82 FTS+FBB+MBB+STV FTS+FBB+STV FBB+STV 49,92 45,79 41,72 39,71 37,04 35,77 FTS+STV FTS+FBB 29,91 30,03 27,62 26, Unit: euros (with VAT included) based on microdata from the Marktest BTC, 2016 and 2017 Base: All homes with bundled services according to the type in question (not including the non-responses). Note 1: The relative error margins for the averages are less than 4.5%, except for the 4P bundle FTS+FBB+MBB+STV which reached 7.2%. Note 2: In Marktest s BTC, the MBB in the bundle does not consider mobile Internet access through mobile phone. Note 3: Only the seven most used types by residential users are shown. Note 4: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service (including the so-called mobile phone Internet ); MBB Mobile broadband (on PC/tablet). 7. Penetration of bundled services According to information collected by the providers of electronic communications, at the end of 2017, the number of bundled services subscribers was equivalent to 91.6% of private households 33, 5.4 percentage points more than the previous year. When calculated in terms 33 Set of persons who live in the same accommodation and who have relations of kinship (de jure or de facto) with each other and may occupy all or part of the accommodation. Any independent person who occupies a part or the whole of a housing unit is also considered as a private household (See ). Bundled services for electronic communications /27

25 4Q2011 4Q2012 4Q2013 4Q2014 4Q2015 4Q2016 4Q2017 of conventional dwellings the penetration of these deals reached 63 out of 100 dwellings (59.2 per 100 dwellings in 2016) 34 See Graph 9. Graph 9 Trends in the penetration of bundled services subscribers Subscribers per 100 private households Subscribers per 100 conventional dwellings Unit: Subscribers per 100 dwellings / 100 families, INE (Statistics Portugal) Note: In this report, and for the calculation of penetrations, annual estimates of population, conventional dwellings and private households are used, published by Statistics Portugal (INE), after the 2011 Census. 34 Using the annual estimates of conventional dwellings from INE (Statistics Portugal). INE (Statistics Portugal) defines conventional dwelling as family accommodation consisting of a room or suite of rooms and their accessories in a permanent building or a structurally separate part of the building, which should have an independent entrance that provides direct access or through a garden or land to a path or a common walkway inside the building (stairway, corridor or gallery, among others). (See Bundled services for electronic communications /27

26 Table 11 Penetration rate of subscribers of bundled services per 100 families, by type Var. (p.p.) 2016/2017 Average annual var. 2013/2017 Accumulate d var. 2013/2017 double play bundles of which: FTS+FBB of which: FTS+STV triple play bundles : : of which: FTS+FBB+STV quadruple/quintuple play bundles : : of which: FBB+FTS+STV+MTS+MBB : : Multiple play Units: number of deals per 100 private households; p.p. Note 1: The annual estimates of private households from INE (Statistics Portugal) were used. Note 2: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB Mobile broadband (including mobile broadband over PC/tablet and the so-called mobile phone Internet ). Note 3: The variations shown may not correspond exactly to the values in the table due to rounding up. The number of 4P/5P bundle and convergent bundle subscribers 36 was equivalent to 41% and 43.1% of households, respectively (Table 11). 8. Value of the services integrated in bundles In November 2017 consumers were asked about the usefulness of each of the services included in their bundle (on a scale of one to ten) The classification of offers in triple play, quadruple play and quintuple play is not necessarily identical to that used by providers, given that ANACOM considers so-called mobile phone Internet as an autonomous mobile broadband Internet access service. 36 Bundles which combine services provided at a fixed location with mobile services. 37 Additional question added to the Marktest's Telecommunications Barometer: Considering the services that you currently have in your bundle, what value do you give to each of them, considering how useful they are for your household. Use a scale from 1 to 10, where 1 means has limited usefulness and 10 has considerable usefulness. Bundled services for electronic communications /27

27 Consumers gave a similar value to the MTS, mobile phone Internet, STV and FBB services (between 8.4 and 8.7 points, on average). FTS and MBB (PC/tablet) showed a lower value (6.3 and 7.4 points, respectively) See Table 12 There were no significant differences from the previous year. Table 12 Value of the integrated services in bundles as considered by consumers FTS STV FBB MTS MBB (mobile phone) MBB (PC/tablet) Average range double play bundles FTS+STV : : : : 0.9 STV+FBB : : : : 0.7 triple play bundles FTS+STV+FBB : : : 2.1 triple play packages quintuple play bundles Multiple play Unit: Scale from 1 ( not very useful ) to 10 ( extremely useful ). Source: Marktest s Telecommunications Barometer, November 2017 (additional question) Base: STV, FBB, STV: Households with the respective service integrated in their bundle according to the type of bundled services; MTS, MBB (PC/tablet): Individuals with the respective service integrated in their bundle according to the type of bundled services; MBB (mobile phone): Mobile phone holders who have their main mobile phone integrated into the home services bundle and use mobile phone Internet according to the type of bundled services. Note 1: FTS Fixed telephone service; FBB Fixed broadband; STV Subscription TV signal distribution service; MTS Mobile telephone service; MBB (mobile phone) Mobile broadband through mobile phone; MBB (PC/tablet) Mobile broadband over PC/tablet Note 2: Range of average responses: difference between the maximum and minimum average values per service. Note 3: Only some of the most used types by residential users are shown. Bundled services for electronic communications /27