Portugal's top telecom operators have flatly rejected the national regulator's characterization of the sector as "robust and competitive," warning that declining revenues and staff cuts tell a fundamentally different story—one that could chill investment just as spectrum renewals loom in 2027.
Why This Matters
• Spectrum uncertainty ahead: Licenses expire in 2027 for key frequency bands (800 MHz, 900 MHz, 1800 MHz, 2.6 GHz), yet operators say they have no clarity on renewal terms.
• Revenue erosion: Retail revenues in 2025 fell to 2013 levels—a 12-year setback—despite a near-doubling of broadband subscribers.
• Job cuts: MEO alone shed 1,200 employees through voluntary programs in the past year; rivals NOS and Vodafone Portugal confirmed similar workforce reductions.
• Price war intensifies: Romanian entrant Digi continues undercutting incumbents with €4/month mobile plans, forcing legacy players to defend market share at the expense of profitability.
Competing Narratives: Regulator vs. Operators
The clash unfolded at the Digital Business Congress in Lisbon this week, where the Portugal National Communications Authority (Anacom) president Sandra Maximiano painted an optimistic picture: a market gaining "new dynamism" from Digi's entry, capable of sustained investment, and showing no need for regulatory intervention.
Within minutes, the chief executives of MEO, NOS, and Vodafone Portugal dismantled that assessment on the same stage.
"I just heard the president of the regulator describe a communications market that is not ours," said Miguel Almeida, CEO of NOS. "I don't know which one she means, but the market she described is not the one we operate in. That worries me—because if the premise is an image of the market that does not correspond to reality, it will hardly lead to good decisions."
Ana Figueiredo, who leads MEO, echoed the concern. "I also do not recognize this robustness. Among the three operators here, we have all made reductions and changes to our workforce," she said, adding that MEO cut 1,200 jobs via voluntary redundancy programs while still recruiting for specialized roles.
Luís Lopes, CEO of Vodafone Portugal, brought data to bear. "Retail revenues have fallen again—something we hadn't seen in more than seven years. Retail revenues in 2025 will be at the same level as retail revenues in 2013," he explained. "I have to go back almost 15 years to reach the revenue level that the telecoms market in Portugal once had."
He noted the paradox: broadband subscribers nearly doubled over that period, and mobile customers grew 5%, yet the industry is earning less. "We have a sector that grows customers and loses revenue. I don't know if that's the definition of a healthy sector—in my opinion, it is not."
The Revenue Crunch Behind the Dispute
Official data from Anacom and operator financial reports confirm Lopes's claim. In 2025, revenues from bundled packages—which account for 56.1% of total retail revenue—grew a mere 0.4%, the weakest annual increase since 2018. Average monthly revenue per bundle subscriber stood at €39.58 in the fourth quarter of 2025, down 0.8% quarter-on-quarter. Quad-play and quintuple-play packages, the most popular offerings, saw average revenue drop 2.7%.
The Consumer Price Index for telecoms fell 2.7% year-on-year in December 2025, with a 12-month rolling average of -0.6%. By January 2026, prices were still 1.9% lower than a year earlier, despite a modest 0.3% monthly uptick.
MEO's total revenues rose 1.3% to €2.81 billion in 2025, while NOS posted a 1.6% increase to €1.82 billion. Yet both companies acknowledged that competitive pressure and price wars have eroded average revenue per user, dampening profitability even as subscriber counts climbed.
Digi's Disruptive Entry Reshapes the Landscape
The Romanian operator Digi entered Portugal's market in earnest in 2024 and has since become the catalyst for the price compression that incumbents lament. By early 2026, Digi had 850,000 active services, including 471,000 mobile numbers and 159,000 internet customers (of whom 132,000 also subscribe to television).
Crucially, Digi pledged not to raise prices in 2026, even as MEO, NOS, and Vodafone announced inflation-linked increases. Its flagship offers—50 GB of mobile data for €4/month and unlimited data with 5G for €7/month—undercut legacy tariffs by 40% to 60%. Fixed broadband at 500 Mbps for €7 further pressured incumbents' fiber pricing.
To consolidate its infrastructure, Digi is deploying 500 additional sites in 2026, taking its total to over 4,600 4G sites, of which approximately 2,600 already support 5G. The company has prioritized coverage in Lisbon's metro system and is eyeing additional spectrum in the upcoming 700 MHz auctions to improve rural reach.
Sandra Maximiano credited Digi with injecting "new dynamism" and driving down prices, particularly in the budget segment. Operators counter that this dynamism has come at the cost of sector-wide revenue erosion and delayed infrastructure investment.
Spectrum Renewal: The €3 Billion Question
Licenses for critical frequency bands expire in 2027, yet operators say Anacom has provided no roadmap for renewal terms, pricing, or obligations. Miguel Almeida and Ana Figueiredo both called for long-term renewals of 10 to 40 years to enable confident capital allocation.
Maximiano has promised a "balanced solution" with "no surprises," to be unveiled later in 2026, emphasizing regulatory predictability. She acknowledged the sector "needs more financing" but insists current conditions support investment.
The Portugal Competition Authority has recommended against automatic renewals or excessively long license terms, advocating instead for open auctions to maximize spectrum efficiency. Digi has publicly backed this approach, seeing it as an opportunity to acquire more bandwidth and level the playing field.
MEO and Vodafone secured renewals for 900 MHz and 1800 MHz bands until 2033 in 2021, subject to expanded coverage obligations in low-density areas. The 2027 round will cover the remaining bands, including 800 MHz, vital for 4G coverage in rural zones.
Infrastructure Minister Miguel Pinto Luz has urged Anacom to prioritize service quality over revenue maximization in the renewal process, signaling political pressure to avoid another high-stakes auction that could further strain operators' balance sheets.
What This Means for Residents
• Expect more price competition: Digi's no-increase pledge and aggressive tariffs will keep downward pressure on bills through 2026, benefiting consumers but squeezing operator margins.
• Service quality at risk? Operators warn that revenue declines and regulatory uncertainty could curtail network investments, potentially slowing 5G rollout in less profitable rural areas.
• Spectrum auctions may add costs: If Anacom opts for a competitive auction in 2027, operators could face multibillion-euro outlays, costs that may eventually filter into consumer pricing—especially if Digi secures additional spectrum and intensifies its buildout.
• Job market implications: The telecom workforce has contracted sharply—MEO's 1,200-person reduction is the most visible example—though operators continue hiring for AI, cybersecurity, and network engineering roles.
Resilience Concerns After January Storms
The regulatory-operator divide has intensified since storms Kristin and Leonardo battered Portugal in January 2026, causing widespread infrastructure damage. Sandra Maximiano closely monitored recovery efforts; mobile networks rebounded within days, but full restoration of fixed-line fiber may not conclude until mid-June for most affected users, with structural repairs taking up to 18 months.
Maximiano emphasized the vulnerability of submarine cable infrastructure—the "backbone of the global digital economy"—and called for greater international cooperation, redundancy planning, and systemic resilience covering data centers and satellite links.
Operators argue the storms exposed chronic underinvestment driven by years of revenue decline and regulatory squeeze, undermining their ability to harden networks against extreme weather.
Looking Ahead: AI, 5G, and Postal Leadership
Beyond spectrum, Anacom is expanding staff to meet new mandates under European regulations on artificial intelligence and digital platforms. The regulator has launched a public consultation on private 5G networks and plans a second 5G auction for the 26 GHz band, essential for ultra-fast industrial applications.
In 2026, Maximiano also assumes the presidency of the European Regulators Group for Postal Services (ERGP), focusing on efficiency, transparency, and innovation in the postal sector—a parallel regulatory challenge as e-commerce reshapes logistics.
Yet the immediate fault line remains the disconnect between Anacom's confidence and operators' caution. With Digi's expansion accelerating, revenues stagnant, and spectrum talks in limbo, the sector's trajectory through 2027 will hinge on whether regulator and industry can align on the fundamentals: how healthy is Portugal's telecom market, really—and who decides?
