Portugal’s Council of Ministers has approved legislation allowing the award of the country’s universal public telecommunications service contract to alternative telecoms group Zon Optimus, while the government indicated it will sign the contract this week, enabling Zon Optimus to replace existing universal service provider Portugal Telecom (PT) from 1 June 2014, reports Portuguese newspaper Publico. The Council of Ministers sanctioned the removal of the concession from PT’s domestic division PT Comunicacoes, which will obtain compensation of EUR33.5 million (USD46.0 million) for ending its contract which was set to run until 2025. In July 2013 CommsUpdate reported that prior to their merger, Zon Multimedia and Optimus were selected to assume responsibility for universal service in the southern part of the mainland, Azores and Madeira (Zon), and northern/central Portugal (Optimus). The Zon/Optimus contract is reportedly worth approximately EUR12 million. The new contracting process was scheduled for completion by January 2014, but the government indicated delays were due to a necessary review of the technical plan submitted by the companies which have since merged.
Publico notes that the move should help to resolve a dispute with the European Commission (EC), which had opened an infringement procedure against Portugal because PT’s universal telecoms service contract was awarded without public tender. However, legal disputes will continue over the total compensation fund for universal services, established to reimburse all telecoms operators in order of their weight in the sector (measured by turnover), which regulator ANACOM set at EUR66.8 million, but is being lobbied by alternative operators to apply retroactive revisions.