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Portugal Readies for Fourth Mobile Operator
31 Mar 08
Anacom is set to launch a tender for a fourth mobile operator for Portugal.
Global Insight Perspective | | Significance | Portugal is set to welcome its fourth mobile operator. | Implications | The emergence of a fourth player would cause a stir in the market and would likely trigger a momentary shake-up in the sector. | Outlook | Although a fourth licence represents an attractive proposition, any new operator in the country will struggle to gain market share in Portugal's mature mobile market. |
The Portuguese telecoms watchdog, Anacom, is set to auction a chunk of radio spectrum in a move that would introduce a fourth mobile operator in the country. Anacom is auctioning off the licence, which is in the 450–470 MHz frequency band, for 15 years. Citing tender documents published on Anacom's website, Thomson Financial reports that there will now be a 30-day public consultation period, after which interested parties will have 25 working days to submit their proposals. On 17 January 2008, the regulator approved the decision to limit the number of frequency usage rights to be allocated for the provision of the Land Mobile Service (LMS) in the 450–470 MHz band. Anacom said it has approved the allocation procedure and would tweak its rules to allow the providers of the mobile trunking service (MTS) to supply LMS. Outlook and Implications Renewing Competition in the Market: The eventual emergence of a fourth mobile operator in the market is bound to reinvigorate a sector that has almost become a duopoly between Portugal Telecom's TMN and Vodafone Portugal. Unlike much of Europe, Portugal does not yet have any active mobile virtual network operators (MVNOs) and has largely coped with three mobile operators. Previous moves, including by the Phone House, to launch MVNO services in the country have so far been unsuccessful. Importantly, however, Anacom is signalling a desire for a new face in the market and has barred the existing mobile operators from bidding for the fourth mobile licence. Tough Conditions for New Player: While the prospect of a fourth mobile licence is an attractive investment, any new mobile operator in Portugal will struggle to grab market share in the country's mobile market. Portugal Telecom's TMN and Vodafone Portugal have carved up the market between themselves, accounting for almost 80% of the market for years. In contrast, the third player, Sonaecom's Optimus, has struggled to boost its market share beyond 20% and has largely given up hope of catching up with its rivals. And with mobile penetration running at over 120% in Portugal, there is little room for organic market growth. Instead, Optimus' parent company, Sonaecom, opted for the quick route in 2006 by launching an audacious takeover bid for Portugal Telecom.
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