The regulator has laid out guidance for operators in an attempt to mitigate the need for further intervention
Given two consecutive inflation linked increases already, the regulator is asking for restraint
On 13 November 2023, ANACOM recommended that operators ‘adopt due constraint’ in passing through any price rises either for new or existing customers (front and back book). It has become increasingly common for operators' contracts to be linked to the CPI with MEO, Vodafone and NOS all linking prices to the measure of inflation. ANACOM’s concern over the increases comes against the backdrop of prices for telecoms services in Portugal being 21.2% above the EU average (using 2022 data) and the fact prices have already risen by 12.4% over the last two years.
ANACOM outlines guidance for operators to help reduce the impact of price rises for consumers
The regulator has previously highlighted its expectation of telecoms operators to support struggling households, and fined operators €15m for the poor communication of price rises. In an attempt to mitigate any further impact on the economically vulnerable, ANACOM has presented providers with recommendations on how to restrain the magnitude of price rises. They include:
Providing tools for customers to be aware of lower priced products and special offers
Offering and increased promotion surrounding standalone services (i.e. other than bundles)
Waiving early termination charges when switching to social tariffs
Contractual reductions or ‘fractional payments’ for the economically vulnerable
What is the situation elsewhere in Europe?
Contractual price rises have become common across Europe over the last 12 months. Research we did last year found the majority of operators have tied their prices to a measure of inflation (usually CPI), as well as adding a fixed percentage (+ x%). The size of this additional component has tended to range from 3% to 3.9%. ANACOM isn’t the only regulator urging operators to reconsider passing through such increases, particularly at a time when inflation is running high. In Italy, AGCOM has similarly reviewed inflation-based price rises and determined any inflation-linked rise may not occur in the first 12 months of a contract, with proposals that would limit any later increases above the rate of CPI. Operators in the UK have been criticised by Ofcom regarding how they’ve communicated index-linked pricing mechanisms, with an investigation currently ongoing.
Portugal is one of only a handful of countries where a regulated social tariff exists
Unlike most of Europe, Portugal is one of perhaps four EU countries that has mandated a social tariff, but for which there has been limited adoption. The current regulated tariff only applies to fixed broadband services with a speed of 12Mbps/2Mbps, a capped activation fee, and a price that’s reviewed annually. In the midst of the price rises, ANACOM may move to campaign awareness of the tariffs in collaboration with various stakeholders (such as local authorities and housing associations). Although ANACOM doesn’t look set to be regulating for further social tariffs, the recommendations laid out in the statement should provide a useful framework for the operators to incorporate, and avoid potential further intervention.
