LISBON, Nov 19 (Reuters) - Portuguese telecoms firm NOS will cut investments to a minimum and carry out a cost-cutting restructuring in 2021 if the rules of a 5G frequency license auction the provider deems ‘unfair’ are not reversed, its CFO said on Thursday.
Portugal’s regulator ANACOM has reserved a spectrum in the 900 MHz and 1,800 Mhz bands for new entrants - framed as a push to encourage competition and improve services.
Under the rules, long-time market players Altice, Vodafone and NOS will have to share their infrastructure and offer national roaming to the new entrants’ customers.
NOS has invested 2.5 billion euros ($2.96 billion) in the last six years, averaging around 400 million euros a year, but CFO Jose Pereira da Costa told Reuters that if the regulator’s rules prevail it was “inevitable” the company would cut capex in 2021.
“This regulation makes any investment, that goes beyond the minimum stipulated by law, absolutely irrational,” da Costa said in an emailed response to questions from Reuters.
“No economic agent invests for the benefit of third parties, particularly when they are its direct competitors and already benefit from outrageously discriminatory advantages,” da Costa said.
Portugal’s telecoms regulator said in early November it would start its auctions of 5G frequency licences this month, even as major players warned they would go to court to challenge rules they said unfairly favoured new entrants.
Established operators will have to commit to setting up 5G services covering 75% of the population by 2023 and 95% by 2025, well above a requirement of just 25% and 50% respectively for new entrants.
Investment into R&D will also be significantly reduced if the rules go ahead, da Costa said. In 2019, the company invested 67 million euros and allocated 193 employees to the area.
“These are investments with a longer-term return, so they will be the first to be eliminated”, he said, adding NOS will also start a restructuring that “will lead to transversal cuts and reductions, to be implemented already in 2021”.
Last week, NOS filed a precautionary injunction in a Lisbon court against the rules imposed by ANACOM. It has also sent a complaint to the European Commission. ($1 = 0.8457 euros) (By Sergio Goncalves; Editing by Victoria Waldersee and Susan Fenton)