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Postal Sector Reform

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Postal Sector Reform :7 i t 20834 June 1998 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized - . 4......' Public Disclosure Authorized /P-6 Postal Sector Reform Kumar Ranganathan with Rohini Dey iJ:t ,,.1 I * I; :aL The World Bank -1;g7Private Sector DevelopmentDepartment August1996 Secondprinting June 1998 Contents Abbreviations.............................................................. vii Acknowledgments............................................................. ix Foreword .............................................................. xi Introductory Statement ................... ........................................... xiii Chapter 1 Agenda for Reform.............................................................. 1 Objectiveof the Study ............................... ............................... 2 Key M essageson ReformPolicy ...........................................................3 New Directions ................... .......................................... 23 Conclusion.............................................................. 26 Annex 1: Concernsabout PostalReform ....................... ......................27 Chapter 2 Regulatory Policy Reform............................................................. 31 CompetitionPolicy and PublicService Obligations ........... ................34 Cost Disaggregation............................................................. 37 UniversalService ........................ ..................................... 38 MonopolyScope ............................................................... 40 Interconnection.................... .......................................... 44 Aspectsof Pricing Policy .......................................................... .... 47 Tariff Regulation.................... ......................................... 49 RegulatoryFramework ............................................................. 50 New Directions ................... .......................................... 53 Conclusion.............................................................. 55 Annex 1: Country Examples:Postal Service Regulatory Reform ........57 Chapter 3 Enterprise Reform: Structural and Corporate Transformation....................... 61 Corporatization............... .............................................. 63 Post and Telecommunications............................................................. 65 The LegalTransformation ............................................................. 67 Legal Statusof the PostalService .......................................................69 Ownershipof the PostalService .......................................................... 73 Functions,Powers, and Obligations..................................................... 75 FinancialPerformance ......................................... .................... 76 Conclusion............................................................. 80 Annex 1: Structureof the PostalService: Some Examples .......... .......83 Annex 2: Country Examples:Postal Service Structural and CorporateTransformation .....................................................85 Chapter 4 Enterprise Reform: Commercialization of the Postal Service ........... ............93 ImprovingOperational Efficiency .......................................................... 95 CorporatePlanning Strategy .............................................................. 100 OrganizationalStructure ......... ....................................................101 Staffing and HumanResources ......................................................... 104 Affiliates,Acquisitions, and Alliances................................... ............... 105 Contents, continued InternalReporting and ControlSystems ........................ ....................108 Marketingand CustomerOrientation ................................. ................ 109 Conclusion........................................................... 117 Annex 1: Country Examples:Postal ServiceCommercialization ....... 119 Chapter 5 The Technological Revolution:Threat or Opportunity? ............. ..................131 What Is the TechnologicalRevolution? ............................. .................. 133 Technologyas a Threat ..................................... ...................... 136 Technologyas an Opportunity........................................................... 138 OptionsOpen to the Postal Service........................................... ........ 143 Conclusion........................................................... 147 Annex 1: Descriptionof CompetingTechnologies ............. .................149 Introduction to the Case Studies .................................................... ....... 155 Case Study 1 Singapore Post: An Enabling Environment ................................................... 157 The Evolutionof SingaporePost ........................................................ 159 Regulationof the Post........................................................... 161 Relationshipwith SingaporeTelecom ................................................ 167 AchievingEfficiency through Commercialization.............. ..................170 The Performanceof SingaporePost ...................................... ............ 176 Conclusion........................................................... 179 Case Study 2 Correos de Chile: Reforming under Constraints ..................... ......................181 The External Environment ...........................................................183 Commercializationand the Operationsof the Post............ ................190 Reform IssuesConfronting the Post .................................................. 196 Conclusion........................................................... 198 Case Study 3 Sweden Post: Removal of Monopoly Protection ..................... ......................199 Background:Sweden and Sweden Post............................................ 200 CompetitionFaced by Sweden Post .................................................. 202 The PostalReform Process:Three Key Steps................................... 205 Regulation.............. ............................ ............... 217 Labor Restructuring........................................................... 218 Innovations............................................................ 220 Sweden PostToday ........................................................... 221 Conclusion........................................................... 221 Case Study 4 Australia Post: A Corporatization Success .................................................... 223 The Reform Process ............................ ............................... 224 The Resultsof the Reforms........................................................... 231 What Lies Aheadfor AustraliaPost? ...................................... ............ 239 Conclusion........................................................... 241 Contents, concluded Case Study 5 British Post Office: The Need for Further Reform ......................................... 243 Background................................................... 243 Royal Mail and Parcelforce............................... .................... 245 PostOffice Counters .................. ................................. 246 The Need for Change................... ................................ 247 Conclusion.................................................... 250 Case Study 6 Canada Post: Reinventing the System ................................................... 251 The Reasonsfor Reform........................ ........................... 252 Reform through Legislation:The Birth of Canada Post Corporation.................. ................................. 257 Relationshipwith the Government................................................... 262 Reform through Commercialization:The Four Phases............ .........265 The Resultsof Reform .................... ............................... 269 ContinuedProblems at the Post ................................................... 277 Conclusion.................................................... 280 Abbreviations AR Acknowledgmentof Receipt ATM AsynchronousTransfer Mode BT British Telecom CAGR CompoundAnnual Growth Rate CBD CentralBusiness District CEO Chief ExecutiveOfficer CNCT Comisi6nNacional de Correosy Telegrafos CPC Canada PostCorporation CPI ConsumerPrice Index CSI CustomerSatisfaction Index CSO CommunityService Obligation CTC Companiade Telefonosde Chile DTI Departmentof Transportand Industry EDI ElectronicData Interchange EFL ExternalFinancing Limit (U.K.) EFT ElectronicFunds Transfer EFTPOS ElectronicFunds Transfer at the Point of Sale EMS ExpressMail Service ENTEL EmpresaNacional de Telecomunicaciones EPOS ElectronicPoint of Sale EU EuropeanUnion GBE GovernmentBusiness Enterprise GDEW GD ExpressWorldwide IAS TelecommunicationsAuthority of Singapore IATA InternationalAir TransportAssociation KPN Royal PTT NetherlandsNV MLOCR Multi-LineOptical CharacterReader MPT MyanmarPost and Telecommunications NCPR NationalCompetition Policy Review OCR OpticalCharacter Recognition P&T Post andTelecommunications PAM PostalAutomated Machine PLFC PhilpostLeasing and FinancingCorporation POUNC PostOffice Users'National Council(U.K.) PPI PTT Post International PPIC PTT Post InternationalCompany PSBR Public SectorBorrowing Requirement (U.K.) PSTN (or PBX) Public SwitchTelephone Network PTC Postand TelikomCorporation PTT Post,Telephone, and Telegraph R&D Researchand Development
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