It is becoming clear to the Portuguese market that the expected liberalization (on January 1 2000) will not be fully achieved, despite the fact that the necessary legislative framework is now in place. This is because the incumbent operator - Portugal Telecom - will, in practice, keep the monopoly in local and regional calls.
Most of the new entrants to the market do not own a sufficiently wide network to reach all Portuguese homes. They are therefore forced to rent circuits from the incumbent operator or to seek alternative technological solutions if they intend to offer local and regional services.
To address this problem the Portuguese regulatory authority has launched a public tender for the licensing of frequencies for the fixed wireless access (FWA). This access system to a public network is often considered to be an alternative to other local access technologies.
The main advantages that the FWA has over other forms of local access are that it (i) costs less and (ii) does not have the usual engineering problems of accessing infrastructures (related to rights of way, access to ducts and timing of installation).
The use of the FWA technology has helped to start real competition in the market. The three new entrants to whom licences have been awarded (pursuant to a ministerial decision on the public tender, dated November 25 1999) in the 3600-3800 megahertz (Mhz) frequency will soon be able to offer local voice telephone services without needing to negotiate with the incumbent operator.
The goal of the regulatory authority in this public tender was to ensure real competition. None of the licences were awarded to Portugal Telecom, its internet service provider or cable operator subsidiaries - and all had applied for a licence in the FWA public tender - in spite of their obvious technological capacities.
Eleven licences have been granted in the following frequencies:
- 3600-3800 Mhz (transmission of voice telephony and low rate data signals);
- 24.5-26.5 gigahertz (Ghz) (high rate data transmission, videoconference and video on demand); and
- 27.5-29.56 Ghz (transmission of televison signal)
News is therefore eagerly anticipated. Some forecasts suggest that licencees will start offering local voice telephone services through FWA in the first quarter of 2000.
For further information on this topic please contact Margarita Couto at Vieira de Almeida Advogados by telephone (+351 1 311 3400) or by fax (+351 1 354 89 39) or by e-mail ([email protected]).
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