In 3Q17 NOS continued to see growth in all key operating metrics.
Convergence is a maturing trend with 47.3% of fixed subscribers already taking household communication
and entertainment services in bundled offers. The most recent market share data reported by the
regulator for the end of 2Q17 shows that NOS ranks #1 with a 40% market share of bundled packages.
ARPU growth is led by a combination of increased RGUs sold per account, increased proportion of higher
value accounts in the customer mix and an improved pricing environment. In 3Q17, Residential ARPU
increased by 4.1% yoy to 44.6 euros.
Pay TV subscriptions are the core measure of residential growth as the basis for upselling all other services.
In 3Q17, NOS grew the level of pay TV subscriptions by 2.4 thousand resulting from a combination of an
additional 5.5 thousand new fixed access customers and a decline in the satellite base of 3.1 thousand in
the quarter. The net growth in the pay TV base in 3Q17 was achieved despite the impact to date of the
market wide remedies imposed by the regulator regarding price increase communication procedures. In
addition, DTH customers have been posting negative quarterly trends in net adds primarily due to the
increasing coverage of NGN fixed networks in Portugal with the main operators expanding their respective
Penetration of fixed broadband and voice is still growing. By the end of 3Q17, NOS had 1.321 million fixed
broadband and 1.753 million fixed voice subscribers, representing respectively 77.4% and 87.0% of the
fixed access base.
On the B2B front NOS is focusing efforts primarily on capturing a greater share of wallet within existing large
and medium corporate accounts and expanding sale of new business, namely by implementing IT and
data management related services with full service solutions for the various subsegments. The operational
model in B2B sub segments has been revisited to guarantee that NOS is present in the most margin
relevant stages of the customer relationship, becoming a producer rather than a pure reseller of services
where relevant. NOS is well positioned to capture value from innovative services developing technological
solutions supported by leading network assets and service platforms and strong institutional partnerships
when appropriate. Continuous and open product and service innovation and excellence in service
delivery are the foundations upon which NOS differentiates itself in the market. In the smaller business
segment where NOS has a comparatively larger market share than in the large Corporate space, the key
priority is to defend revenue and margin potential and progressively capture natural share of gross adds.
In 3Q17, NOS increased total B2B RGUs by 6.6 thousand with ARPU per RGU remaining stable at 15.7 euros.
Investing to secure long term competitiveness
Fixed and mobile traffic continues to grow exponentially, for NOS and for the market in general. Year to
date, fixed and mobile data traffic has increased by 28% and 32% for NOS, clear indication of the
increasing demands placed on the network.
To meet the challenges of continued growth in traffic and guarantee service quality, a number of major
network development projects are currently underway across both the mobile and fixed infrastructure.
In 3Q17 NOS initiated a mobile network overhaul replacing all the active elements of the network with the
latest generation of radio equipment, introducing Single RAN architecture to optimize spectrum utilization
and network efficiency, increasing capacity by almost three times and enhancing coverage.