Report on the state of the postal services market in 2010 - UKE

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Report on the state of the postal services market in 2010

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2011-05-31

Postal activity within the meaning of Art. 1 of the Act of 12 June 2003 - Postal Law (Official Journal of Laws of 2008 No. 189, item 1159, as amended) means an economic activity, involving the provision of postal services in the domestic or international market.

Taking into account the socio-economic importance of the postal market, a constant monitoring and evaluation of its functioning is needed in terms of the impact of progressive liberalization, and particularly the development of competition, alongside with maintaining access to high quality universal postal services provided at affordable prices.

The postal services market, in its evolution, is approaching a crucial moment that is its full opening to competition. It requires, therefore, regulatory action which will ensure its sustainable and harmonious development. In this context, the role of the national regulatory authority acquires special significance as a guarantor of fair competition, while maintaining access to services.

This study is part of actions taken by the national regulatory authority in order to monitor developments on postal services market. The analysis of these developments helps identify trends characterizing the development directions and map out a vision of the ultimate model of the market.

The report was drawn up on the basis of the information contained in the reports of the postal activity in 2010, which according to Art. 44 (1) and (2) of the Postal Law are annually presented to the President of the Office of Electronic Communications by postal operators. The report for 2010 was presented by the public operator (Poczta Polska) and 152 non-public operators.

The postal services market in Poland in recent years has progressively evolved towards opening up to competition and creating one of the important cells of the internal EU market. The area of services reserved for the public operator reduces systematically and also market competition is increasing.

New opportunities and favorable conditions for growth of competitiveness have been developed mainly by EU legal regulations. The so-called III Postal Directive of 2008 set the deadline for the full opening of the common market by December 31, 2010 and set rules for its operation under full liberalization. Poland took the opportunity to postpone the implementation of this Directive by the end of 2012, however, liberalization of the postal market and further development of competition is an inevitable process.

In 2010, beside Poczta Polska 244 entities were registered in the register of postal operators (as of the end of 2010) against 209 entities registered in 2009. It should be noted that not all operators who have been registered actually operate. There were 152 actually operating operators in 2010 (against 125 in 2009).

The main player in the postal market is still Poczta Polska. It is the only entity that poses the infrastructure necessary to provide postal services of a universal nature. Universal postal services are still the most important ones among the services provided by Poczta Polska. This is confirmed by data for 2010, in that year the public operator made in the domestic and international market more than 2.1 billion of postal services (universal postal service, contractual postal services, including courier services), which translates into nearly PLN 4.9 billion of revenue. This number of services includes almost 1.7 billion of universal postal services that have generated nearly PLN 4.3 billion of revenue.

Private operators realized in 2010 in total (in domestic and international market), more than 3.5 billion of postal services (items of correspondence, direct mail, parcels, non-addressed forms), which resulted in over PLN 1.3 billion of revenue. Analysis of the data submitted by the abovementioned operators indicates inter alia that in the domestic market the largest share in terms of volume belongs to non-addressed  forms (94.2%) which, however, do not play such a significant role in revenue (11.9%). The main source of revenue of private operators are packages - in domestic market, they generate approximately 60.3% of revenues, and in international market about 75.1%. It should be noted, however, that in reports of the postal activity for 2008-2010 increased number of operators did not show data on activities in the area of parcels. These operators take the position that such services are rendered by them under the provisions of the Law of transportation, and not the Postal Law, where the postal parcel is defined as a public operator service. Therefore, the data on parcel services provided by private operators for 2008-2010 is incomplete and therefore not comparable to previous years (because of the way the postal parcels are defined in Postal Law, the President of UKE has no legal possibilities to enforce that data).

An analysis of the volume of services provided in 2010, in the various segments of the market, by all operators shows that Poczta Polska is by far the dominant player in the field of items of correspondence and direct mail (its shares are respectively 91.1% and 92.2%). In the segment of parcels and other contractual services, the share of private operators in the volume is significant and equals 47.2%, but - as already mentioned - this share for the period 2008-2010 is significantly underestimated. In the area of non-addressed forms private operators have the distinct advantage (93.0% in volume). It should be noted, however, that the activity in the latter area may be conducted without an entry in the register of postal operators, so UKE does not have complete data in this area and it appears likely that the actual structure of this market is different (with a much smaller share of Poczta Polska). The structure of revenues for operators in different market segments is similar to the structure of volume described above.

On the basis of data from recent years on the number of private postal operators and the number of mail, it should be noted that after a period of dynamic changes in the postal market it has began to stabilize. It can be assumed that its slowdown was caused by the decision to postpone full liberalization of the postal market in Poland, as well as the macroeconomic situation of the state.

The importance of the opening of the market for its development should be seen primarily in the context of the size of the reserved area, namely that part of the market, which is reserved for the public operator. As shown in the analysis carried out by UKE, the reserved area is about three-quarters of the total market for postal services (excluding non-addressed forms) and generates about half of revenue. It is worth noting that both the volume size and the amount of revenue in the period 2006-2010 remained stable. The main entity which benefits of the activities in this relatively stable area of the market remains Poczta Polska, which is consistent with the intent of the legislator, which established a reserved area for the purpose of funding the obligation to provide universal postal services.

A solution is required for definitions stated in postal Law, which are so vague that every year there is an interpretation problem and as a consequence the "shift" of part of the postal services sector to transportation services. Intensity of this problem was noticed in 2008.

The current issue of the last few years is the situation of the public operator, which is still not fully prepared for functioning in a liberalized postal market. Addressing the issue of Poczta Polska is important because it is the largest player in the postal market and the shape of that market depends largely on the decision of state authorities towards the public operator and the action taken by the company itself. Given the fact that the postponement of full liberalization of the Polish postal market till 2013 was primarily dictated by the need to enable the public operator to adjust to the new market situation, the operator should use that period of time to resolve its important issues.

Against this background, an important task for the state authorities is to develop a new Postal Law, not only because of the need to implement the provisions of the III Postal Directive, which entered into force in 2008, but also because of the need for clarifying the legal environment in which postal operators operate. The new Postal Law should ensure fair conditions for operators to compete and consumers with access to postal services with high quality and affordable prices. In Poland, the implementation of the provisions of the III Postal Directive is to take place until 31 December 2012, therefore, already in 2008 some relevant work had been undertaken and continued in 2009-2010.

The Report is available in Polish.

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