Posts are grappling with funding the universal service obligation in a competitive market without the cushion of a state monopoly.
A conference organized by Switzerland’s Federal School of Technology at Lausanne shed light on the challenges they face. Matthias Finger, professor from the university, set the ball rolling by focusing on the complex relationship between politics and Posts. Due to a changing economic environment, Posts are feeling the heat from market competitors in business areas, where competition was previously unheard of. This was due to the onset of globalization in the 1980s, coupled with a shift in ideology where state ownership was viewed with scepticism, added Finger.
The Post was a “political construction in the late 19th and early 20th century by national political authorities to contribute to national development by law and had a political mission in its genes”, said the professor. However, private companies, interested in the opening of postal markets, saw only the business opportunities.
Finger also argued that Posts have been more vulnerable to increased competition in the sector from private players than other public services, such as the railways. “The historical operator is handicapped due to its public-service obligation in the face of competitors, which cherry-pick the most lucrative business-segments,” Finger said.
Concerning liberalization of the postal sector in the European Union, the industry expert was critical. “The EU is liberalizing its postal market by reducing the public monopoly to zero, thus removing the Posts’ traditional financing mechanism for the universal service obligation,” he said.
At the same time, the European Commission had shied away from re-defining universal service. “This leaves the historical operator in an almost impossible situation: it still has the universal service obligation but not the monopoly to finance it,” he underlined.
For his part, the UPU’s director general, Edouard Dayan, said that the Post was a politically sensitive topic. This was partly due to its socio-economic contribution to society, not least as one of the largest employers in the world.
This week’s event was organized in association with the UPU during the annual session of its Postal Operations Council. This runs from April 12-30, 2010.