Clash over postal facts and figures

Date: 17/09/1998

By Chris Johnstone

POST offices are warning the European Commission against preparing the next stage of mail liberalisation on the basis of what it claims are misleading facts and figures.

PostEurop, the lobby group which represents Europe's national post offices, maintains that a study drawn up for the Commission which examines the cost to post offices of providing national services is rigged in such a way as to underestimate their real overheads and overestimate the profitable proportion of the business.

The clash marks the first round of what is likely to become an increasingly intense debate as the Commission tries to frame its policy for the postal sector after 2003, when the current cautious competition regime is up for review.

The post offices claim that the study, carried out by UK-based consultants NERA for the Commission's Directorate-General for telecoms and post (DGXIII), focuses on costs in isolation.

They argue that slimming down the current monopolies would increase the price of delivering each letter. PostEurop's Tim Walsh also claims that the report "fails to highlight the risks and sensitivities associated with particular liberalisation choices".

One anomaly thrown up by the NERA study is the wide range of estimates for the cost of national postal services, known as 'universal service', in member states. "You would expect them to cost roughly the same," said Walsh. "Instead, the study finds that, in Finland, there is no extra cost from the universal service, but concludes that in other countries it costs up to 15% of total revenue."

Europe's post offices will raise their concerns about the study at a meeting with Commission officials next Monday (21 September).

They have, however, shown more enthusiasm for a separate report compiled for the Commission which concluded that spinning off letter sorting and collection from delivery was not a good route for liberalisation. "It reached the conclusion that this type of liberalisation would be very difficult to regulate," said Walsh.

Other studies for the Commission have examined how various other options for liberalising direct mail, incoming international mail and ordinary letters, or a combination of these, would work in practice. The study on ordinary mail examined the effect of paring the existing letters monopoly. Post offices currently enjoy a monopoly for delivering items weighing under 350 grams, or five times the price of a stamp for a 20 gram letter.

The Dutch post office, which is in the forefront of European moves to introduce more competition to the sector, did not join other PostEurop members in denouncing the study.