The President of the Office of Electronic Communications presents a report on postal services market in Poland in 2007.
Once social and economic significance of postal services market is taken into consideration, its constant monitoring is necessary as well as the assessment of its functioning with regard to gradual liberalization effects, especially with attention to the development of competition, maintaining at the same time a high standard of universal postal services provided at affordable prices.
The postal services market, in its evolution, is approaching a break-through point, which is its full opening to competition. Therefore, the market requires regulatory measures, ensuring its balanced and harmonious development. In this context, the role of the national regulatory authority acquires special significance, as it guarantees the development of fair competition, while maintaining aforementioned service accessibility.
The presented report is an example of the actions taken by the President of the Office of Electronic Communications to monitor the postal services market. Its analysis helps to define development trends and to draw the vision of the targeted market model.
Report on Postal services in Poland in 2007 was written based on data received from 100 operators, who submitted their 2007 postal operations reports (12 of whom resigned from postal services provision and were removed from the register by the end of the year).
Below is the compilation of the above-mentioned report.
In 2007 significant changes have taken place as far as the legal background is concerned, which on the local postal market is most of all defined by the Postal Law Act. The emphasis of these changes is reinforcement of legal tools at the disposal of the President of UKE, mainly in the context of universal services market regulation, which is the primary domain of the public operator’s operations.
With regard to European regulations, significant changes took place only at the beginning of 2008. 27 February 2008, a new directive was published (Directive 2008/6/EC of 20 February 2008 amending Directive 97/67/EC – so called III Postal Directive), which introduces full market liberalization at the beginning of 2011 with an option to postpone it till 2013 in selected Member States, including Poland. III Directive specifies 31 December 2010 as the date by which national executive and administrative provisions, necessary for the transposition of the Directive should enter into force.
The President of UKE on numerous occasions submitted amendment proposals to the afore-mentioned Postal Law Act based on data from the postal services market, consumers’ needs, postulates of postal operators and problems arising from Postal Law Act enforcement. In 2007 guidelines for Postal Law amendments were prepared, which might form a basis for a draft of new provisions, which regulate the national postal services market and remain compatible with EU requirements.
The postal services market in Poland has been in the process of gradual liberalization for several years now. On the one hand the scope of services exclusively reserved for the public operator is diminishing, on the other, the number of postal operators is increasing. In 2007, apart from Poczta Polska, there were 164 entities in the register of postal operators (as of the end of 2007). However, not all undertakings which have been registered actually operate in the sector.
The main player on the market is still Poczta Polska. It is the only entity with infrastructure necessary to provide universal postal services, which remain the core services provided by Poczta Polska (with unaddressed mails having the largest share). It is illustrated by 2007 data, in which Poczta Polska delivered in domestic and cross-border traffic:
Non-public operators delivered (internally and externally) in 2007 the total of almost 2,4 bln postal services (items of correspondence, direct mails, postal packages, unaddressed mails), which resulted in 1,7 bln PLN in revenue. The analysis of data submitted by operators shows that internally unaddressed mails have the largest share (96,9%) which do not play a major role as far as revenue is concerned (9,2%). The main source of revenue for non-public operators are postal packages – in domestic traffic they generate around 83,1% of revenue and in cross – border traffic around 81,2%.
In 2007 the mail volume of both the public operator and non-public operators internally (excluding unaddressed mails) amounted to over 1,9 bln pieces (compared to 2006, there was an approx. increase of 13,5%). The volume including unaddressed mails reached the level of 5,1 bln pieces (an approx. increase of 2,7% as compared with the previous year). In 2007 postal sector operations (internally and externally) generated revenue of 6,1 bln PLN and including unaddressed mails – 6,3 bln PLN.
Having analysed the volume of provided services in 2007 in respective market segments, it becomes apparent that Poczta Polska is a dominant operator in the area of items of correspondence and direct mail (its shares are respectively 98,8% and 99,5%). In the postal packages segment, Poczta Polska lost its dominant position, with non-public operators having a share of 53,9%. Non-public operators have also gained a 72,2% share of unaddressed mails. It should be taken into account however that services in unaddressed mails segment might be provided without being registered as a postal operator so UKE does not possess full data in this regard and the actual structure of this market is probably different (a much smaller share of Poczta Polska). The revenue structure in respective market segments has a similar shape.
Gradual liberalization of a postal services market, which has taken place so far, did not cause the financial standing of the public operator to deteriorate. It is the concerns of its employees that might pose a threat to public operator’s stability (it is even possible that universal services will cease to be profitable and thus Poczta Polska may apply for a subsidy, provided for by the law).
The full version of the report on postal services market in 2007 is available in Polish.
Main conclusions of the report
The structure of the Polish postal services market, following a dynamic growth of the number of non-public operators, became stable. The table below indicates that most of the factors defining the market (the number of registered operators, the volume of services delivered by these operators, the total number of services delivered) are changing in the same direction but at various paces. The only exception is employment, the growth pace of which keeps dropping.
Growth rate of indices defining the postal market in Poland in 2004 - 2007
- number of registered operators
- employment - non-public operators
- mail volume - non-public operators (including unaddressed mails
- total mail volume (including unaddressed mails)
Summing up the analysis above, the development of the postal services market in Poland should be positively evaluated. The changes taking place are not so significant as they used to be, however they remain clearly visible. It can be expected however, that a decision to postpone the date of full postal market liberalization in Poland may slow down its development. Many operators hoped the market would be open in 2009. In the current situation, however, some might resign from postal operations.
Without a doubt, all efforts should be directed at increasing the market development pace or at least maintaining its current level with the aid of liberalization-oriented regulatory actions. The aim of these steps should be to ensure fair competition for postal services. With regard to consumers, the underlying goal is access to high standard postal services, available at affordable prices. Finally, a key issue is preparation of the public operators for functioning in liberalized postal services market.