by “Serious”, “wrong”, “hoax”, “really shocking”. This is how the president of the National Communications Authority (Anacom), João Cadete de Matos, in another hearing at the Assembly of the Republic, described the loyalty proposals of telecommunications providers in Portugal, which he considers anti-competitive and harmful to the interests of consumers.
The regulator has strongly urged the government to change the law to limit credit to a maximum of six months, compared to the current two years, because the 5G auction secured the entry of two new providers. And it accused incumbents of boosting loyalty campaigns during the 5G auction, classifying some of them as abusive loyalty programs, in order to minimize switching to new, potentially cheaper services.
“We are no longer asking the government to consider changing the law,” he explained. “We ask the government to do it. And do it quickly.”
In the regulator’s initial intervention to MPs of the Committee on Economy, Public Works, Planning and Housing, at a hearing requested by the PCP on price increases in telecommunications and postal services guaranteed by CTT, Cadete de Matos said that, if the credit regime is not revised urgently, consumers are subject to further inflationary price increases in the coming years, equal to those already applicable to the incumbent.
This in a country that pays for telecommunications already 20% above the prices applied in the European Union. Portugal, he said, had seen an 8% increase in telecommunications costs over the past 12 years, when prices fell in 27 years over the same period.
“Even more serious is that Portugal helped, in particular when the frequency auction campaign lasted [5G], increasing repeat loyalty and abusive repeat subscriptions,” said Cadete de Matos. “The number of consumers complaining about the abuse of reward offers,” which are not authorized or remotely authorized, or without presenting “all the information about what these reward payments entail,” is dramatic.
“Many customers only find out at the end of the contract, because they don’t understand why they were loyal again,” he added. “It’s really shocking (…) we will be very active and draw conclusions on this issue,” he guaranteed.
“We received complaints in January and February” with consumers who “in January had been approached by companies with new offers” and with guarantees that they would not raise prices, said João Cadete de Matos.
“After a week or two they got word that the price would go up” at the rate of inflation, he said.
“There is no reason” for the current prices
The entry of two new operators, Dense Air and Digi, will stimulate competition. But to stimulate the drop in prices, it is necessary to revise the law on the maximum duration of credit, said Cadete de Matos.
“What we hope will happen, already this year and the next, with the investment of these companies, is that there will be in Portugal the offers that exist in Spain and Italy. But for that we need to exempt consumers from 24-month offers,” he argued.
He gave an example of a fiber optic contract, which “can be concluded for a monthly fee of €20” in Spain, “with a commitment period of 3 months”.
“In Portugal, the lowest price available is 30 euros, and it is the price provided by the operator Nowo”, the operator with the lowest quota. The remaining operators apply minimum prices of 38 euros, but with a two-year credit, he said.
“It was presented to the Portuguese that with faith, communications were cheaper,” he said. “It’s a joke what they say to the Portuguese, what are the advantages, the discounts,” he added. And he wondered, after referring to the prices: “what is the reason” for services like the Internet “to cost twice as much in Portugal? There is absolutely no reason”.
“Faith is a mistake the country has fallen into,” he summed up.
