Sector (2008-2010)

Ref. Ares(2015)5384492 - 26/11/2015

PREFACE

MAIN DEVELOPMENTS IN THE POSTAL SECTOR (2008-2010)

PART B: COUNTRY FICHE APPENDIX | 29 NOVEMBER, 2010

PREFACE

Authors: Henrik B. Okholm, Ph.D., Project Manager, Marcin Winiarczyk, Anna Möller, Claus Kastberg Nielsen, Ph.D., quality assurer. Client: DG MARKT Date: 10 November, 2010 Contact: SANKT ANNÆ PLADS 13, 2nd FLOOR | DK-1250 COPENHAGEN PHONE: +45 2333 1810 | FAX: +45 7027 0741 WWW.COPENHAGENECONOMICS.COM

PREFACE

TABLE OF CONTENTS Chapter 16 Lithuania ...... 150

Chapter 1 Austria ...... 7 Chapter 17 Luxembourg ...... 158

Chapter 2 Belgium ...... 18 Chapter 18 Malta ...... 168

Chapter 3 Bulgaria ...... 28 Chapter 19 Netherlands ...... 179

Chapter 4 Cyprus ...... 36 Chapter 20 Poland ...... 189

Chapter 5 Czech Republic ...... 43 Chapter 21 Portugal ...... 198

Chapter 6 Denmark...... 52 Chapter 22 Romania ...... 210

Chapter 7 Estonia ...... 62 Chapter 23 Slovakia ...... 218

Chapter 8 Finland ...... 69 Chapter 24 Slovenia ...... 229

Chapter 9 France ...... 78 Chapter 25 Spain ...... 240

Chapter 10 Germany ...... 88 Chapter 26 Sweden ...... 248

Chapter 11 Greece ...... 99 Chapter 27 United Kingdom ...... 257

Chapter 12 Hungary ...... 110 Chapter 28 Iceland ...... 267

Chapter 13 Ireland ...... 121 Chapter 29 Liechtenstein ...... 276

Chapter 14 Italy ...... 130 Chapter 30 Norway ...... 282

Chapter 15 Latvia ...... 140 Chapter 31 Switzerland ...... 292

PREFACE

tion and completition of our report. In such instances, we have added footnotes to explain any developments which have since taken place, but have not initiated a new round of contact to NRAs, ministries and NPOs. PREFACE We are grateful for the support and interest we have received from the various stakeholders and for the constructive discussion with the project team at DG Internal Market. Copenhagen Economics has been commissioned by DG Internal Market to conduct a study of the main developments in the postal market from 2008 to 2010. The project team at Copenhagen Economics consisted of partner and project manager, Ph.D. Henrik Ballebye Okholm, economist Marcin Winiarczyk, economist The study consists of two parts. This is Part B, which contains the consolidated Anna Möller and quality assurer managing director, Ph.D. Claus Kastberg Nielsen. country fiches with a comprehensive set of indicators for each country. The sepa- The team also received excellent support from colleagues at Copenhagen Economics rately available Part A contains the main text. and from research assistants Kristoffer Bjärkefur, Andreas Bjerre-Nielsen and Hanna Hedlund. The collection of data included in this Part involved a significant amount of work. The team at Copenhagen Economics contacted all regulatory authorities, ministries Stockholm, 10 November, 2010 and national postal operators in all 31 countries. Following the receipt of the initial responses all respondents were invited to review the consolidated versions of country Henrik Ballebye Okholm fiches to ensure data integrity. The new information was continuously updated and Partner, Ph.D. published on a dedicated website. We have also interviewed a large number of stakeholders, including competitor postal operators based in 5 EU countries; large inter- Stockholm, 10 November, 2010 national postal operators; express carriers; representatives of trade unions; mailers’ associations; international postal organisations, (incl. the UPU and the IPC), selected Henrik Ballebye Okholm NRAs and NPOs.. Moreover, we have reviewed a large amount of publicly available Partner, Ph.D. sources, including all previous studies in the “Main Developments” series; the academic literature; EU and national case law repositories, and annual corporate reports.

The data we report on has been collected during the first half of 2010. In some cases this means that new legislation has been passed in the time between the data collec-

The country fiches are structured according to the following format Indicator x.4.2 NRA human and financial resources Indicator x.4.3 NRA independence X – refers to the country number in the study. Indicator x.4.4 Complaint handling – appeal from NRA decisions Indicator x.4.5 Enforcement of competition rules by NRA and cooperation with Section x.1 Country facts and main sectoral indicators NCA Indicator x.1.1Country facts Indicator x.4.6 Regulation of user protection procedures and remedies Indicator x.1.2 Volume of items delivered by segment in total market, millions of Indicator x.4.7 Main issues of discussion between NRA and USP items Indicator x.4.8 NRA relations with customer associations Indicator x.1.3 Revenues from segments in total market, millions of Euro Section x.5 Market structure and competition Section x.2 Regulatory framework andpractices Indicator x.5.1 Information about the incumbent Indicator x.2.1 National regulatory framework Indicator x.5.2 Incumbent profits, 2009, national currency Indicator x.2.2 Regulation of services based on new technologies Indicator x.5.3 Mail market segmentation Indicator x.2.3 VAT treatment of postal services Indicator x.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Indicator x.2.4 Services ensured as universal services under national law Indicator x.5.5 Mergers and acquisitions of incumbent since 2007 Indicator x.2.5 Mechanisms to ensure provision of universal service Indicator x.5.6 New entrants since 2008 Indicator x.2.6 Legal mechanisms to ensure quality of universal service Indicator x.5.7 Cross border mail Indicator x.2.7 Financing the net cost of universal service Indicator x.5.8 Presence and role of mail consolidators in the market Indicator x.2.8 Cost of universal service obligation and method for its calculation Indicator x.2.9 Authorisation/licensing for services within and outside universal ser- Section x.6 Structure of market demand vice area Indicator x.6.1 Revenues and volumes generated by consumers vs. business custom- Indicator x.2.10 Access to postal infrastructure ensured by Member States ers in 2009, national currency, millions of items Indicator x.2.11 Involvement in competition cases since 2007 Indicator x.6.2 Growth rate in revenues and volumes generated by consumers vs. business customers between 2008-2009 Section x. 3 Regulation of prices and accouting Indicator x.6.3 Revenues and volumes generated by consumers vs. business custom- Indicator x.3.1 Method of price regulation ers in 2008, national currency, millions of items Indicator x.3.2 Accounting requirements Indicator x.6.4 Trends in mail substitution Indicator x.3.3 Cost accounting system of the USP Indicator x.6.5 Effect of the financial crisis on revenues in 2009 Indicator x.3.4 Promoting access to and affordability of postal services Section x.7 Price performance Section 4 Role of NRA Indicator x.7.1 Standard public tariffs, 2005-2009, national currency Indicator x.4.1 NRA powers

Section x.8 Social and consumers aspect Indicator x.9.6 Please describe briefly the most important environmental initiatives Indicator x.8.1 Employment indicators, 2009 implemented at your firm Indicator x.8.2 Wage and productivity indicators Section x.10 Quality of service developments Section x.9 Technological developments Indicator x.10.1 Transit time for domestic priority mail, 2009 Indicator x.9.1 Innovation, technology and new services Indicator x.10.2 Transit time for cross-border priority mail, 2007 Indicator x.9.2 Statistics on technological progress Indicator x.10.3 Quality of service indicators Indicator x.9.3 Supply of e-commerce services, total market Indicator x.9.4 Supply of hybrid mail or virtual delivery services Indicator x.9.5 Developments within networks and mail consolidation services Where an indicator is missing this is because no answers were provided by the stakeholders.

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Austria has had one postal related competition case since 2007, which is still ongoing (Deci- sion of the Higher Administrative Court from 25.02.2009 (VwGH): Zl 2009/03/0016) The Austrian NPO is VAT exempted for all USO products until 2010. An amendment to the VAT Code (BGBl I 2010/34) implemented the ECJ decision. As a result, Austria Post must begin levying VAT on the non-USO services (competitive services) while at the same time it will benefit from an increase in deductions for the value-added tax paid by the company. Two surveys of residential customers (with and without internet access at home) were performed, see main report.

1.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 1.1.1 Country facts Country facts Value Unit Year Population 8.4 Million 2010 Population growth 4.7 Percent 2000-2010 Population density 100 Pop. / km2 2010 Urbanisation rate 67.1 Percent 2008 GDP 241.2 PPS, billion 2009 GDP/capita 28,800 PPS 2009 Chapter 1 AUSTRIA Postal services to GDP ’99/09: 0.87%/0.79% Ratio 1998/2008 NRA The Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) NRA responsibilities? Authorisation, US rates, Special tariffs, USP accounts, Cross subsidy in US, Cross Box 1.1 – Country summary subsidy non-US, ensuring fulfilment of USO (in particular post offices/agencies), The volume of Austrian postal items fell from 2008 to 2009. Addressed items fell overall by US fund, QoS USP and non-USP, clearance of cost of changing mail-boxes in buildings, conciliation body for complaints and disputes, general terms and conditions 5.4% and in the segments correspondence fell by 9.3%, direct mail fell by 3.0% and publica- of the USP tion fell by 1.7%. The volume of unaddressed items grew by 2.4%. Incumbent Österreichische Post AG In November 2009, Austria adopted the law BGBl I 2009/123 containing provisions relating to the transposition of Directive 2008/6/EC (which will enter into force on 1/1/2011) . Main activities of incumbent Mail, parcel/logistics, retail An estimate of the market share of the Austrian NPO varies depending on the segment. Let- Employment, incumbent 29,300 ter mail have very little competition, unaddressed mail has some substantial competition Source of financing - while express and parcels have intense competition. In the 2009 legal regime, there are several legal barriers to competition in Austria, including Note: - means no answers in questionna reserved area, USO regulation, and access to infrastructure (no access to cluster postal boxes), Source: ITA/WIK (2009) Country fiche, Eurostat, NRA and licensing requirements. In the new legal regime, licensed operators are obliged to comply with the relevant collective labour agreements. Depending on the conditions in the collective agreements, they may im- ire (The USP declined to participate) pede competition by restricting entry by new operators. From 2010, the reserved area will cease to exist, while a barriers may be encountered if the required adherence to collective agreements (not a barrier in itself) would result in the de facto prohibition of certain business models. The Postal Market Act also requires Austrian Post to convert existing cluster box units in the period January 1, 2011 to December 31, 2012 in order to make them accessible to competitive postal providers. USO fund has been set up, but not yet activated, to compensate for net cost of USO (this is a possibility in the postal law, not yet in force).

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Indicator 1.1.2 Volume of items delivered by segment in total market, millions of 1.2. REGULATORY FRAMEWORK AND PRACTICES items Segment 2005 2008* 2009 Indicator 1.2.1 National regulatory framework - NRA Addressed items N/A N/A N/A Question Yes/No Name of law Year of enactment Remarks Letter N/A N/A N/A Is postal law en- Partly Postal Market 12/2009 / 01/2011 PMG was published in 2009 – Full Correspondence N/A 1,102 1,000 acted? Act (PMG) market opening will come into force on 1/1/ 2011. Direct mail N/A 794 770 Is Directive 2008/6 Yes 12/2009 / 01/2011 Publications N/A 651 640 transposed? Unaddressed items N/A 3,710 3,800 Is there a law that defines… Cross-border outbound N/A N/A N/A Scope of USO? Yes § 6 PMG 1998; 2009 Express N/A N/A N/A Quality of USO? Yes §§ 6 ff PMG 1998; 2009 Parcels N/A N/A 50 USO rates? Yes § 21 PMG 1998; 2009 Total N/A N/A N/A USP accounts? Yes § 23 PMG 1998; 2009 Source: NRA and WIK (2009) Reserved area? Yes/No 2009 Still in force until 31/12/2010. Re- served area will disappear when the implementing legislation enters into in force from 1/1/2011. Authorisation pro- Yes §§ 25 ff PMG 1998; 2009 cedures? Universal service Yes § 14 PMG 2009 fund? User protection? Yes § 53 PMG 1998; 2009 Other special rights Ministry: 1998; 2009 Issuance of stamps with “Austria” or (which)? Yes “Republic of Austria” and public spaces and the above airspace for the installation and maintenance of letterboxes as well as for other smaller structures of up to 2m² ( § 12(3) PMG)** Note: *) Answers are related to the new Postal

Source:**) NRA, In addition, Ministry there is a right to special vehicle pl

Indicator 1.2.2 Regulation of servicesMarket based Act on (complete new technologies coming into force in 2011) Question Answer Are you aware of the presence of services based Yes ates but it is not part of on new technologies in your market? For example, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? In the moment the electronic parts of these regulation services in are the not PMG. For example, confidentiality of hybrid mail? planned to be regulated because they are not part of the Univer- sal Service. Source: NRA

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Indicator 1.2.3 VAT treatment of postal services Indicator 1.2.6 Legal mechanisms to ensure quality of universal service Postal product Part of USO? VAT rate Legal basis Mechanism Yes/No Mechanism Yes/No USO services of Österreichische Post Yes Exemption Umsatzsteuergesetz (§ 6 Z 10b) NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes* All postal products outside the USO No 20 % Umsatzsteuergesetz Annual measurement of quality of service? Yes NRA can impose other No Note: An amendment to the VAT Code (BGBl I 2010/34) implemented the ECJ decision in the TNT Annual publication of results on quality of service monitoring? Yes remedies? Note: *) Fines are imposed by Post UK case ref. C-357/07. As a result, the NPO is required to charge VAT on all postal prod- Source: NRA ucts outside the USO. In the asse ticularly from customer groups which are not e Indicator 1.2.7 Financing the the Ministry net cost for Transport of universal service Post would benefit from a considerable increase in Mechanism Yes/No Mechanism Yes/No Source:company NRA, Ministry, (pretax allowance).”Austria Post ssment Investor of the NPO, “[t]his could re Reserved area No Who contributes to the compensation Incumbent, fund? competitors* http://www.post.at/en/footer_about_us_investor_r (Incumbent, competitors, other entities) Indicator 1.2.4 Services ensured as universal servicesntitled to under a VAT nationaldeduction. lawHowever, Austrian sult in a loss of revenue, par- Compensation fund Yes Public procurement No Segment Defined as universal service by law? Aredeductions quality for standards the value-added specified tax by paid law? by the Relations website, accessed November 2010, Size of compensation fund (if present, - Direct compensation from public funds No in Euro) Basic letter post Yes* Yes* Bulk letters No** No** Note: - means no answers in questionnaire elations_facts_figures_risk_management.php) Direct mail Yes* Yes* * Contributions will be on a pro-rata basis corre Periodicals Yes No Post and other licensed postal operators with revenues larger than €1 million. Only net costs in Non-priority letters Not provided Not provided excess of 2% of the annual costs of Austrian Post will be refunded. Basic parcel post Yes* Yes* (adopted from Austria Post Investor Relations website, accessed November 2010, Bulk parcels No** No** Source:http://www.post.at/en/f NRA Note: *) It must be pointed out that according to § sponding to the market share held by Austrian

access points, so all postal items that are consigned ooter_about_us_investor_relations_facts_figures_risk_management.php) sal service according to § 6 PMG. In practice, this our outside the universal service area may differ **) only maywithin have the further USO implications e.g. 3 Z 6 PMG distribution centres are not considered as Source: NRA at distribution centres wi means that the status of services as being within Indicator 1.2.5 Mechanisms to ensu reon provisionthe applicability of universal of VAT. service depending on the type of postal branch which Question Answer ll be outside of univer- Describe the role played by the three See § 12 PMG - Upon PMG’s entry into force, Austrian Post shall be mechanisms: market forces, designation designated as universal service provider. Five years following PMG’s and public procurement. Are other safe- entry into force, the NRA shall review whether there are also other guarding measures present? postal service providers able to provide a nationwide universal service. Source: NRA, Ministry

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Indicator 1.2.8 Cost of universal service obligation and method for its calculation Indicator 1.2.9 Authorisation/licensing for services within and outside universal Question Answer service area What is the cost estimate of the USO? (if Not available (as of 2010) Services within universal services If yes, state services e.g. letter post items, available, in Euro) otherwise insert “No” What is the name of calculation method? N/A (if available) What licensing procedure is used? From 2011-01-01: Individual licence for letters up to 50g. All other postal services: general authori- Short description of calculation method (if The net cost is to be calculated as the difference between the net sation (obligation to notify) available) cost for a designated universal provider of operating with the universal service obligations and the same universal service provider opera- Which universal services are subject to individual license? From 2011-01.01: letters up to 50g tion without the universal service obligations. Which universal services are subject to general authorisation? All other universal services Is a thorough documentation of calculation Yes, cf. § 15 PMG (reproduced below) Are authorisation requirements published (transparent)? Yes method available? Where? Is the USP authorised under Art. 9*? Sect. 26: The universal service provider does not Is calculation method approved by the Yes require a license; it is considered the operator of NRA? a licensed postal service Does NRA calculate USO cost? No (as of 2010) Services outside universal services Answer Note: Answers are related to the new Postal Ma For which services is general authorisation required? All postal services Are any non-universal services subject to individual licensing? No § 15 PMG Note: *) Article 9 of Directive2008/6/EC Calculation of costs for the un Section 26. (1) A license shall be required for th for**) third parties. Sections (1) and (2) transpose 2) The universal service provider shall not require a (3) Cost that the universal service providerrket Act would (complete have avoidedcoming had there been no universal ser- licensed postal service. vice obligations. The calculationsiversal isservice; to Section 15 (3) A license pursuant to paragraph 1 1. Elements of the identifiedRecital services 29 whichof the Directive.can on into force in 2011) 1. conveys only outbound cross-border mail itemse conveyance of letter mail items of up to 50 g conditions falling outside no 2. conveys letter mail items enclosed with another po 2. Specific users or groups of users who, can only be based on the costs attributable to: that item license; it shall be considered the operator of a ling outside normal commercial standards. is not required by anyone who 3. conveys items of correspondence in such a way th (4) The calculation of thermal net costcommercial of specific standards. aspe ance individual verifiable postal items are accomp seprately and so as to avoid the double countingly be of provided at a loss or provided under cost to the addressee and the accompanying person can access the individual postal item at any time and overall netcost shall be calculated as the sum of the specific components. Source: NRA be served at a loss or under cost conditions fal- make the necessary arrangements, stal item and relating solely to the contents of 4. conveys direct mail items, but only direct ma cts of universal service obligations shall be made personally addressed postal items, which is clearlyat in the interest of rapid and reliable convey- anied at all times on the journey from the sender any direct or indirect benefits and costs. The vidual specifications apart fromsuch the addressas courier field. services. Source: NRA

il items which are sent as unwrapped and unsealed identifiable as such and which contains no indi-

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Indicator 1.2.10 Access to postal infrastructure ensured by Member States 1.3. REGULATION OF PRICES AND ACCOUNTING Access to: Yes/No Other conditions: Yes/No Post codes Yes* Change of address database Yes* Address database Yes* USP return services No Indicator 1.3.1 Method of price regulation Post office boxes No Street letter boxes No Segment Method Remark Delivery boxes No/Yes** Sorting centres No Basic letter post Ex ante* Single-piece tariffs of the universal service provider for do- Other conditions: Yes/No mestic letter mail items weighing up to 50 g Require downstream access to USP - Bulk letters Ex post** Note: - means no answers in questionnaire Direct mail Ex post** Periodicals Ex post** *) Answers are related to the new Postal Market Non-priority letter post - **) Currently, access to cluster box units in apart Basic parcel post Ex post** “The Postal Market Act also requires Austrian Post Bulk parcels Ex post** riod January 1, 2011 to December 31, 2012 in order to make them accessible to competitive Note: - means no answers in questionnaire Source:postal NRA, providers” Austrian Post Act (complete coming into force in 2011). *) The single-piece tariffs of th http://www.post.at/en/footer_about_us_investor ment houses is restricted up to 50 g shall be reported to the National Re Indicator 1.2.11 Involvement in competition cases to sinceconvert 2007 existing cluster box units in the pe- intended publication. Publication can be proh nouncement if the single-piecee universal tariffs fail service to co provider for domestic letter mail items weighing Case name* Case status Postal product(s) Issue to the NPO. However, concerned graphs 1 to 3; otherwise the tariffs may be published (Sec 22/1 PMG) **) If facts become known to the National Regulato Decision of the Higher Ongoing Discounts on_relations_facts_figures_risk_management.php competi- In 2009, Austrian Post was in a legal gulatory Authority at least two months prior to the Administrative Court from tive products conflict on the remit of the Telecom the Universal service provider’s tariffs for services 25.02.2009 (VwGH): Zl Control Commission in respect to the ibited by decision within two months of an- 2009/03/0016 granting of discounts. graphs 2 and 3) are not in compliance withmply the stanwith the requirements of Section 21, para- iffs shall be initiated and reported to the univer Decision of the Constitu- reasons justifying the National Regulatory Author tional Court from 17.12.2009 (VfGH): B provider the opportunity to make a statement ryon Authority which justify the assumption that in the universal service sector (Section 6 para- 103/09-16 within a period of at least one month If the adap Note: In addition to the postal regulator (RTR), National Regulatory Authority shall prohibit thedards objectionable of paragraphs conduct 1 to 3, by a reviewdecision of and the declaretar- sal service provider. The report shall indicate the Source:the NRA tariffs for invalid. (Sec 21/4-6 PMG). tacted but they were not aware of any cases since 2007. ity’s assumption and grant the universal service Source: the National Regulatory Authority’s intentions tation is not carried out within two weeks, the the National Competition Authority of Austria was con-

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Indicator 1.3.2 Accounting requirements Indicator 1.3.4 Promoting access to and affordability of postal services Question Answer Question Answer Question Yes/No If yes, how? Separation of accounts No. of up/down stream accounts N/A Non- Yes NRA: “The tariffs for the Universal Service shall be applied to all users identically, discriminatory [but] shall not exclude the right of the operator to conclude individual price agree- Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA N/A prices (Art. 12) ments with users. With the exception of newspapers and periodicals, the criteria for No. of reserved product accounts N/A Transparency required? such individual price agreements and special tariffs including the amount of the price reductions granted for such individual price agreements shall be reported to the Na- Unreserved product accounts required? No Independent body reviews USP accounts? Yes tional Regulatory Authority and published in a suitable form; they shall be equally ap- No. of unreserved product accounts N/A Last review of USP accounts 2007 plied to all users and comply with the principle of non-discrimination.” (§ 21 PMG) Application of tariff principles Body reviewing USP accounts (Type of body) NRA Affordability Yes NRA: § 21 PMG (Art. 12) defined Ministry: The universal service [is to be] accessible to all users at an affordable price. Bulk services within USO? Yes NRA issues statement of compliance? No in national law? (§ 6 PMG) Does USP conclude individual agreements? Yes Last publish statement of compliance N/A Source: NRA, Ministry Individual agreement: cost based price required Yes Publish cost allocation system? No

Individual agreement: NRA has cost data? No USP financial accounts audited? Yes

USP has special tariffs? Yes Last published financial accounts 2009 Up- and downstream accounts? No 1.4. ROLE OF NRA Source: NRA Indicator 1.4.1 NRA powers (answer provided by the NRA in July 2010) Indicator 1.3.3 Cost accounting system of the USP Task or power Yes/No Task or power Yes/No Question Answer Require USP cost allocation system? Yes Levy fines? Yes (BMVIT)** What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) Fully distributed costs (FDC) Approve USP cost allocation system? Yes Fines since 1.1.2006 regard- No based on Historical Cost ing data requirements? Is the cost accounting system approved by the National Regulatory Authority? - Review cost allocation to non-USO? Yes Seek court order? No Require data from USP (Art. 22a*)? Yes Cancel unlawful rates? Yes Assessment of the system (pros and cons) Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Available data, based on certified annual accounts Require data studies? Yes Court orders sought since No Note: - means no answers in questionnaire 1.1.2006 regarding data? Source: NRA Require downstream access? No Note: *) Article 22a of Directive 2008/6/EC

**) Fines are generally imposed by the Ministry Source:sory NRA procedures (Sec 50 PMG) or to withdraw an enrichment (Sec 56 PMG)

for Transport, NRA has the right to set supervi-

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Indicator 1.4.2 NRA human and financial resources Indicator 1.4.5 Enforcement of competition rules by NRA and cooperation with Question Answer NCA Question Yes/No Question Yes/No Size of budget? (€ thousands) 2010: €602.000 2011: max €750.000 Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No Number of total staff ? 3,88 FTEs (2010) Note: ‘NCA’ national competition authority. (Of which, staff dealing with postal affairs) - Source: NRA Source of NRA budget 2010: General budget of the State or government 2011: 25% from the General Budget oft the State and 75% from the Market* Indicator 1.4.6 Regulation of user protection procedures and remedies Who approves NRA budget Parliament Question Answer Question Answer Note: - means no answers in questionnaire User protection procedures in postal or Postal USP(s) required to issue annual re- Yes consumer law? port *) All Postal service providers, which reported the Enforcement by NRA or national consumer NRA (see § 53 NRA issues annual report Yes Source:tional NRA Regulatory Authority or which required a licence (Sec 25 und 26 PMG). protection authority (NCPA)? PMG) Applies to non-USP(s) in USO area? Yes Review of operator decision ensured No Indicator 1.4.3 NRA independence Applies to non-USO services Yes Agency reviewing operator No Question Yes/No Question Answer Remedies by competent national author- No intended provision of a postal service to the Na- ity? (maximum fee) Can government guide NRA on No Who, and under what Post-Control-Kommission: Federal Govern- policy? conditions can ap- ment, RTR-GmbH: Federal Minister for Source: NRA point NRA head? Transport, Innovation and Technology Some NRA decisions require No Who and under what RTR-GmbH: Federal Minister for Transport, governmental support? conditions can dis- Innovation and Technology Indicator 1.4.7 Main issues of discussion between NRA and USP miss NRA head? Issue (Short description in bullet points) Can government suspend NRA No Minimum qualifica- Yes orders? tions for NRA heads? • Special tariffs/ individual agreements (point of regulation) • Postal service points / Post Offices ( Sec 7 PMG) Note: Procedure of re-appointment ongoin • Domestic multi-mailbox installations (Concept and timetable) Source: NRA • General Terms and Conditions / Tariffs (ongoing task) Source: NRA Indicator 1.4.4 Complaint handling – appeal from NRA decisions dica g, publication in Wiener Zeieitung. Question Answer Question Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? No To whom is NRA decision appealed? Court* Number of NRA decisions reversed? 0 Note: *) Constitutional Court of Austri Source: NRA

a and Administrative Court of Austria

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1.5. MARKET STRUCTURE AND COMPETITION Indicator 1.5.3 Mail market segmentation Percentage opened to com- Subject to li- No. of sig- Names of sig- Segment petition cense / au- nificant nificant competi- Indicator 1.5.1 Information about the incumbent Under national law Actual thorisation? competitors tors Question Answer Question Answer Addressed items - - - Name of incumbent Österreichische Post AG Main activities Mail, parcel/logistics, re- Letters Emerging - - - tail Correspon- 100 %(Reserved until 0% Yes (up to 50 -- dence 2011) gram) Legal status Public limited company Employment 29,300 Direct mail 100 % Emerging No - - State ownership (percent) 52.8 % (via ÖIAG) Source of financing - Publications 100 % - No - - Note: - means no information Unaddressed 100 % Substan- No - - Source: Österreichische Po items tial Cross-border out- 100 % Intense No - - bound st, Annual report 2009 Express 100 % 30% No - DHL, TNT, UPS, DPD Indicator 1.5.2 Incumbent profits, 2009, national currency Parcels 100 % 30% No - DHL, TNT, UPS, Statistic Value DPD, Hermes Total profit in 2009 149.4 Mio. Euro (ÖPAG Group) Total 100 % - - - - Percentage of profit coming from letter mail 221.1 Mio. Euro (ÖPAG Group) Note: - means no answers in questionnaire Source: NRA, ITA/WIK (2009 Percentage of profit coming from reserved area (if present) - Note: - means no information Source: Österreichische Po Indicator 1.5.4 Sum of market shares of 4* main competitors (excl. incumbent) Segment Approximate sum of market shares of 4* main competitors st, Annual report 2009 Letter post (open area) - Parcels and Express 60% Unaddressed items - Source: ITA/WIK (2009

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Indicator 1.5.5 Mergers and acquisitions of incumbent since 2007 1.6. STRUCTURE OF MARKET DEMAND Name of acquired Main activities of the acquired Main objectives behind Date company company the acquisition Indicator 1.6.1: Indicator 1.6.2: April, 2008, HSH Holding (Belgium) HSH serves as the holding for two - Indicator 1.6.3 Trends in mail substitution fully consolidated legal entities: MIT Transport and DISTRA. These Short description (in bullet points) companies operate in the field of • Decline in letter mail pharmaceutical logistics, focusing on the health care sector in Bel- • Stable direct mail volumes gium. Source: Austrian Post (2010a) August 31, D2D – direct to docu- Operates in the field of output ser- - 2008 ment GmbH (Vienna) vices (printing, enveloping and data transfer services) September 1, Cont-Média Hungary Specialises in the delivery of unad- - 1.7. PRICE PERFORMANCE: 2008 Kft (Hungary) dressed advertising mail in Hungary May 31, 2009 Electronic Bill Pre- Specialises in the electronic deliv- - sentment and Payment ery of mail items to a secure ac- (Austria) count Indicator 1.7.1 Public tariffs, 2004-2009 July 1, 2009 Rhenus Life Science Specialises in the transport and - Segment 2005 2007 2009 (Germany) storage of health care products and temperature-controlled transport Single item: 20g tariff letter 0,55 EUR 0,55 EUR 0.55 Euro logistics Single item: 100g priority mail 1.00 Euro Source: Austrian Post (2010a) Single item: 500g insured and registered 3.85 Euro Single item: 1 kg parcel 4.17 Euro Indicator 1.5.6: New entrants since 2008 Bulk mail: composed of 20g letters Bulk mail: composed of 100g letters Indicator 1.5.7 Cross border mail Note: - means no information Volume (outbound) Reserved for USP? Main actors (if not re- Terminal dues regu- served to incumbent) lated per Art. 13? Source: Austrian Post (2009)

- Only inbound mail No Note: - means no answers in questionnaire 1.8. SOCIAL AND CONSUMERS ASPECTS Source: NRA

Indicator 1.8.1 Employment indicators, 2009 Indicator 1.5.8 Presence and role of mail consolidators in the market USP Question Answer Employment (thousand), in full time equivalents 22 Are companies offering mail consolidation services present in the market? No Percentage of total country employment 0.54% Source: NRA Share of civil servants 44.3% Share of part time and temporary employment - Share of outsourced and subcontracted employment - Note: - means no information Source: Österreichische Post, Annual report 2009, Eurostat lfsi_emp

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Indicator 1.8.2 Wage and productivity indicators Indicator 1.9.6 Please describe briefly the most important environmental initia- Incumbent tives implemented at your firm Wages as a proportion of total costs 47.5% Brief answer (in bullet points) Average wage per hour (€) Environmental targets: o 10% reduction in energy consumption by 2012 Note: - means no information o Reduce CO² emissions by 10% in the years 2008–2012 Source: ITA/WIK (2009), UNI Europa (2009) o Reduction of residual waste Initiatives o Higher ecological efficiency in transport Transport operations, a very important component of Austrian Post’s busi- 1.9. TECHNOLOGICAL DEVELOPMENTS ness activities, are carried out in the most environmentally-compatible manner. On the one hand, this is achieved on the basis of optimal route planning (avoidance of empty runs, consistent optimisation of vehicle capac- Indicator 1.9.1 Innovation, technology and new services ity utilisation, reduction in total transport). On the other hand, use of a modern vehicle fleet, regular maintenance and ongoing driver training en- Service Do you Volume Remarks hance the ecological efficiency of the company’s transport activities. In one offer? (million of items) pilot project, Austrian Post’s own “eco-trainers” provided training to about 150 drivers in fuel-efficient driving techniques. Hybrid mail No - There is a plan to implement hybrid mail in 2011 with o Natural gas a product called Web2Print Natural gas and electric driven delivery vehicles Austrian Post is pursuing an Virtual delivery of mail - - - innovative and environmentally- compatible approach in its mail delivery operations. A pilot project was started using natural gas-driven delivery vehicles in cooperation with the Utility Vehicles Division of Volkswagen, and Pick up locations for Yes Not applicable The service Pickup Paket allows the senders to spec- supported by the “klima:aktiv mobil” (climate compatible mobility) cam- parcels (parcel shops) ify the pick-up location e.g. parcel shops. paign coordinated by the Federal Ministry of Agriculture, Forestry, Environ- Note: - means no answers in the questionnaire ment and Waste Management. Austrian Post currently uses a total of 77 natural gas-powered delivery vehicles along with 20 electric mopeds and Source: Austrian Post (2010b), http://www.post.a electric bicycles. o Participation in the international climate protection programme Austrian Post has also committed itself on an international basis to comply- Indicator 1.9.2 Statistics on technological progress ing with the principles of sustainable corporate management. For example, Austrian Post is one of 16 European postal companies taking part in the Indicator Value in 2009 Increase/decline “Greenhouse Gas Reduction Programme“, the European-wide initiative coor- since 2007 dinated by PostEurop, the European association of public postal operators. t/en/personal_sending_pa Percentage of letter mail benefiting from automated proc- Small letters (<50g): 91%* - Based on jointly developed measurement tools and approaches to collecting essing (e.g. sorting) Medium size (<1kg): 80%* data, this programme will systematically gather information on the CO² Large letters (<2kg): 58%* emissions of postal companies in their transport and vehicle fleet operations rcel_pickup_parcel.php for the first time and then compare the data. In addition, the participants Percentage of parcels benefiting from automated processing - have also defined the ambitious goal of achieving a 10% reduction in green- (e.g. sorting) - house gas emissions between the start of the initiative in 2007 and the year Note: - means no answer in questionnaire 2012. Austrian Post has also become a member of the “Environmental Measurement and Monitoring System (EMMS)” developed on the basis of * Average reading rate: proportion of items that the “Greenhouse Gas Protocol”, a project coordinated by the International Postal Cooperation, an association of 24 postal companies in Europe, North Source:codes) Austrian Post (2010c) America, Australia and New Zealand. This system and its conclusions laid the groundwork for the presentation of the very first global sustainability re- Indicator 1.9.3 Supply of e-commerce services, total market port of the postal sector at the end of December 2009 at the same time as the United Nations Climate Change Conference held in Copenhagen. As a Indicator 1.9.4 Supply of hybrid mail services, total market services provider, Austrian Post primarily uses resources in its vehicle fleet Indicator 1.9.5 Developments within networks machines and mail automatically consolidation read; addresses services (postal and buildings. Other material consumption such as metal is not of material importance. Source: Austrian Post (2010a)

AUSTRIA

1.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 1.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 95 95.96 98 99.58 - - 100 99.95 Source: NRA

Indicator 1.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 95 96.4 ------Note: - means no information Source: Ecorys (2008a)

Indicator 1.10.3 Quality of service indicators Indicator Value Percentage of lost mail N/A Number of postal outlets (post offices and agencies) and Post offices and agencies per 10.000 inhabitants: 1.99 number of letter boxes per 10.000 inhabitants. Letter boxes per 10.000 inhabitants: 24.3 The implementation of CEN standards. Yes (transit times) Source: NRA

BELGIUM

The Belgian NPO is VAT exempt on all USO postal products. On 1 January 2010 the bpost introduced the concept of differentiated pricing for stamps for standardized domestic items up to 50 gram. For instance, the formerly applied tariff of € 0.59 remains unchanged if stamps are bought in quantities of 10 at least, while single postage stamps are sold at € 0.69.

2.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 2.1.1 Country facts Country facts Value Unit Year Population 10.8 Million 2010 Population growth 5.7 Percent 2000-2010 Population density 355 Pop. / km2 2010 Urbanisation rate 97.4 Percent 2008 GDP 294.0 PPS, billion 2009 GDP/capita 27,200 PPS 2009 Postal services to GDP ’99/09: 0.71%/0.77% Ratio 1998/2008 NRA Belgisch Instituut voor postdiensten en telecommunicatie (BIPT) Chapter 2 BELGIUM NRA responsibilities? Licensing & Authorisation, Administrate USO fund, US pricing Special tariffs, USP accounts and USO net cost, Quality of US, User complaints, Cross subsidy Box 2.1 – Country summary Incumbent bpost Main activities of incumbent Domestic and International Mail, Parcels & Express, Banking & Insurance, Between 2007 and 2009, the size of the Belgian mail market remained nearly unchanged at Document Management, Newspaper deliveries €1.8 billion. At the same time, the express market shrunk by about 18 percent, to €800 mil- Employment, incumbent - lion. Source of financing Own revenues taken into account the reserved area and the management Belgium is obliged to transpose the directive before 1.1.2011.the new law was endorsed by the contract between bpost and the State responsible Committee of the Chamber in November 2010 (please note that the information in Note: - means no answers in questionnaire this country fiche refer to the situation from July 2010). Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP The markets for addressed items are not fully liberalised as of 2010 due to the presence of re- Indicator 2.1.2 served area. Indicator 2.1.3 Revenues from segments in total market, millions of Euro The Belgian NPO (bpost) has full market share of the markets for addressed items. For unad- Segment 2005 2007 2009 dressed items the NPO has 20% market share and 10% for express. There is no evidence of net costs of the USO, according to the NRA. Mail N/A 1738 1774 Belgium has had one competition case since 2007. Express N/A 988 816 One potential legal barrier to entry in the 2010 legal regime is the state compensation of early Logistics N/A N/A N/A delivery. Financial N/A 236 220 The draft proposal for a new postal law, as of late 2010 is pending before the Parliament, in- Others N/A 206 168 cludes provisions on delivery frequency, geographical coverage and the use of self-employed Total N/A N/A N/A workers which might have negative effects on the entry of new competitors in the addressed Source: NRA mail segment.

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2.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 2.2.2 Regulation of services based on new technologies Question Answer Are you aware of the presence of services based • Hybrid mail Indicator 2.2.1 National regulatory framework on new technologies in your market? For exam- • Hybrid registered Mail Question Yes/no Name of law Year of enactment ple, hybrid mail or virtual delivery networks? • Fully electronic registered Mail Yes, hybrid registered Mail and fully electronic registered Mail Is postal law Yes Law on the reform of certain 21 march 1991 Do you have plans to regulate such products? could be regulated regarding respecting some specific require- enacted? economic public companies For example, confidentiality of hybrid mail? ments and certification. Is Directive No 2010 – second half 2008/6 Source: NRA transposed? Is there a law that defines… Indicator 2.2.3 VAT treatment of postal services Scope of Yes Law on the reform of certain 1999 USO? economic public companies Postal product Part of USO? VAT rate Legal basis Quality of Yes As above Basic principles in Law 1991 (updated 1999) and con- Addressed letters Yes and No None VAT exemption on public postal services (art. 44, USO? crete rules of QoS in Royal Decrees of 2006 and in §3, 14° Code on Value Added Tax) Management Contract between Belgian Post & Belgian Universal service parcels Yes None idem State Unaddressed items No 21% idem USO rates? Yes As above + secondary legisla- Basic principles in Law 1991 (updated 2002) and con- Parcels (non-USO) No 21% idem tion crete rules in Royal Decree of 16.01.2006 Source: NRA, Ministry

USP ac- Yes As above + secondary legisla- As above counts? tion Indicator 2.2.4 Services ensured as universal services under national law

Segment Defined as universal service by law? Are quality standards specified by law? Reserved Yes As above As above but modified in 2002 (transposition directive area? 2002/39/EC) Basic letter post Yes Yes Authorisa- Yes As above + secondary legisla- Basic principles in Law 1991 (updated 1999) and con- Bulk letters Yes No tion proce- tion crete rules in Royal Decree of 16.01.2006 dures? NRA: As above Direct mail Yes No Universal Yes As above + secondary legisla- As above Periodicals Yes No (only newspapers in the Management service fund? tion Contract)

User protec- Yes As above As above Non-priority letter s Yes Yes tion? Basic parcel post Yes Yes Note: The answers given below reflect Bulk parcels Yes No Source: Ministry, NRA the project of law modifying the Law on the refo posing the Third Postal Directive Source: Ministry, NRA Indicator 2.2.5 Mechanisms to ensure provision of universal service the actual (March 2010) legal stat Question Answer Describe the role played by the three mechanisms: market Current law provides a designation of universal service rm of certain economic public companies trans- forces, designation and public procurement. Are other provider (USP) with no time limit. The draft law trans- us and do not take into account safeguarding measures present? posing the 3rd Directive foresees a designation for an initial period of 8 years. Source: Ministry, NRA

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Indicator 2.2.6 Legal mechanisms to ensure quality of universal service Indicator 2.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Services within universal services If yes, state services e.g. letter Annual measurement of quality of service? Yes NRA can impose other remedies? Yes post items, otherwise insert “No” Annual publication of results on quality of service Yes What licensing procedure is used? Individual license monitoring? Which universal services are subject to individual license? All Source: NRA Which universal services are subject to general authorisation? No Are authorisation requirements published (transparent)? Yes Indicator 2.2.7 Financing the net cost of universal service Is the USP authorised under Art. 9*? No Mechanism Yes/No Mechanism Yes/No Services outside universal services Answer Reserved area Yes Who contributes to the compensation fund? Licence For which services is general authorisation required? All postal services outside US (Incumbent, competitors, other entities) holders For which services is an individual license required (ex ante approval)? No Compensation fund Yes Public procurement No Source: NRA Size of compensation fund - Direct compensation from public funds No (if present, in Euro) Note: - means no answer in questionnaire Indicator 2.2.10 Access to postal infrastructure ensured by Member States Source: NRA Access to: Yes/No Other conditions: Yes/No Post codes No Change of address database No Indicator 2.2.8 Cost of universal service obligation and method for its calculation Address database No USP return services No Post office boxes No Street letter boxes No Question Answer Delivery boxes Yes Sorting centres No What is the cost estimate of No burden (2008) Other conditions: Yes/No USO? (if available, in Euro) Require downstream access to USP Yes What is the name of calcula- FDC tion method? (if available) Source: NRA Short description of calcula- Fully distributed cost" (FDC) methodology” applied to the calculation of the uni- tion method (if available) versal service cost and unfair burden. Indicator 2.2.11 Involvement in competition cases since 2007 Is a thorough documentation Yes; Available at Case Case Postal product(s) con- Issue of calculation method avail- http://www.ibpt.be/ShowContent.aspx?levelID=594&objectID=1599&lang=fr&for name status cerned able? Where? Lang=en - Closed Unadressed mail Predatory pricing, discriminatory pricing, cross- http://www.bipt.be/en/594/ShowDoc/3049/Calculation_methodology/KPMG__ subsidisation Analysis_of_the_method_for_the_calculation_o.aspx Note: - means no answer in questionnaire Is calculation method ap- Yes proved by the NRA? Source: Belgian Competition Council (2007), Beslissing nr. 2007-P/K-29-AUD van 19 november 2007 Does NRA calculate USO cost? Yes Source: NRA, Ministry

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2.3. REGULATION OF PRICES AND ACCOUNTING Indicator 2.3.3 Cost accounting system of the USP Question Answer What type of cost accounting system does the FDC based on ABC Indicator 2.3.1 Method of price regulation USP use? (e.g. LRIC, FAC, LRMC) Segment Method Remark Is the cost accounting system approved by the Na- Yes Basic letter post Price Cap For all US items in this service category tional Regulatory Authority? Bulk letters Price Cap For items in reserved area Assessment of the system (pros and cons) Direct mail Price Cap For items in reserved area Pros: Widely used, simple, available data, in line with the Directive Periodicals Cons: Risk for arbitrary distribution, the cost of inefficiencies are not excluded Non-priority letter post Price Cap For all US items in this service category Source: NRA, USP Basic parcel post Price Cap For all US items in this service category Bulk parcels Indicator 2.3.4 Promoting access to and affordability of postal services Source: NRA Question Yes/No If yes, how?

Non-discriminatory prices (Art. 12) Yes Art. 12 is literally transposed in the Act of 21 March 1991 (ar- Indicator 2.3.2 Accounting requirements required? ticle 144ter) Question Answer Question Answer Affordability (Art. 12) defined in na- Ministry: Yes Ministry: Price evolution of a basket of products is limited tional law? NRA: No to price inflation and a bonus linked to quality of service. Separation of accounts No. of up/down stream accounts - Source: Ministry, NRA Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - No. of reserved product accounts 296 Transparency OLE OF Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes 2.4. R NRA No. of unreserved product accounts 1.321 Last review of USP accounts 2008 Application of tariff principles Body reviewing USP accounts (Type of body) - Indicator 2.4.1 NRA powers Bulk services within USO? Yes NRA issues statement of compliance? Yes Task or power Yes/No Task or power Yes/No Does USP conclude individual agreements? Yes Last publish statement of compliance 2006 Require USP cost allocation system? Yes Levy fines? Yes Individual agreement: cost based price required Yes Publish cost allocation system? Yes Approve USP cost allocation system? Yes Fines since 1.1.2006 regarding data requirements? No Individual agreement: NRA has cost data? Yes USP financial accounts audited? Yes Review cost allocation to non-USO? Yes Seek court order? Yes USP has special tariffs? Yes Last published financial accounts 2008 Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes Up- and downstream accounts? No Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Note: - means no answers in questionnaire Require data studies? Yes Court orders sought since 1.1.2006 regarding data? - Source: NRA Require downstream access? No Note: - means no answers in questionnaire Source: NRA

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Indicator 2.4.2 NRA human and financial resources Indicator 2.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 1.7 MEUR (only Postal) User protection procedures in postal or con- Postal law USP(s) required to issue annual No sumer law? report Number of total staff ? 10 (only Postal) (Of which, staff dealing with postal affairs) Enforcement by NRA or national consumer NRA NRA issues annual report Yes protection authority (NCPA)? Source of NRA budget Fees collected from non-postal operators Applies to non-USP(s) in USO area? Yes Review of operator decision en- Yes Who approves NRA budget Finance Inspection, Parliament sured Source: NRA Applies to non-USO services Yes Agency reviewing operator Ombudsman Remedies by competent national authority? 5% turnover (maximum fee) Indicator 2.4.3 NRA independence Source: NRA Question Yes/No Question Answer

Can government guide NRA on No Who, and under what condi- Government, proposed by minister policy? tions can appoint NRA head? Indicator 2.4.7 Main issues of discussion between NRA and USP Some NRA decisions require No Who and under what conditions Government, proposed by minister Issue governmental support? can dismiss NRA head? Can government suspend NRA Yes Minimum qualifications for NRA Competences, integrity, independ- • Transparency, non-discrimination and cost-orientation of prices for bulk mailers, professional clients orders? heads? ence, no conflicts of interests and intermediaries. Source: NRA Source: NRA, USP

Indicator 2.4.4 Complaint handling – appeal from NRA decisions Indicator 2.4.8 NRA relations with customer associations Question Answer Question Answer Example of relation Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes No examples To whom is NRA decision ap- Court of Appeal, Number of NRA decisions reversed? 0 (only postal) Source: NRA pealed? Brussels Source: NRA 2.5. MARKET STRUCTURE AND COMPETITION Indicator 2.4.5 Enforcement of competition rules by NRA and cooperation with NCA Indicator 2.5.1 Information about the incumbent Question Answer Question Answer Question Yes/No Question Yes/No Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Name of bpost Main activities Domestic and International Mail, Parcels & Express, Note: ‘NCA’ national competition authority. incumbent Banking & Insurance, Document Management, Newspaper deliveries Source: NRA Legal status Public limited company Employment - State ownership 50% plus 1 share Source of Own operations (if meant financing USO: reserved (percent) financing area) Note: - means no answers in questionnaire Source: USP

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Indicator 2.5.2 Incumbent profits, 2009, national currency Indicator 2.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the ac- Main objectives behind the ac- Statistic Value Date company quired company quisition Profit from operating activities (EBIT) 373.6 (normalized EBIT: 240.1) June 30, 2009 CNS (Courier Net- Express delivery Complementary product offering in Total profit in 2009 290.9 (normalized profit: 163.1) work System) courier/express sector June 30, 2009 Express Road Express delivery Complementary product offering in Percentage of profit coming from letter mail * courier/express sector Percentage of profit coming from reserved area (if present) * July 3, 2009 MG Road Express Express delivery Complementary product offering in courier/express sector Note: *: No due to confidentiality of Dec 28, 2009 MSI Worldwide Mail Private (International) mail Geographical expansion (USA) operator BIPT act Source: USP Source: USP Indicator 2.5.6: data which the BIPT should respect Indicator 2.5.3 Mail market segmentation Indicator 2.5.7 Cross border mail Percentage opened Subject to li- No. of sig- Main actors (if not re- Terminal dues regu- to competition Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? cense / au- nificant-due to its legal obligation in the Under na- thorisation? competi- Names of signifi- No data No Bpost (including BPI), No information Segment tional law Actual (Yes/No) tors cant competitors Spring, TNT, DHL, La Poste, française and Swiss Post Addressed items 50 % 0 % Yes - - International Letters - - - - - Source: NRA Correspondence - - - - - Direct mail - - - - - Publications - - - - - Indicator 2.5.8 Presence and role of mail consolidators in the market Unaddressed items 100 % 80 % No 1 BD Question Answer SPRING, SWISS POST, Are companies offering mail consolidation services present in the market? Yes DHL, TNT,LA POSTE How large is the turnover of mail consolidators in relation to the postal market? - Cross-border outbound 100 % N/A Yes 5 FRANÇAISE Have you handled any competition cases involving mail consolidator? - Express 100 % 90 % Yes 4 DHL, TNT, FedEx, UPS Note: - means no answers in questionnaire Parcels 100 % N/A Yes 4 GLS, DPD, TNT, Kiala Source: NRA Total - - - - - Note: - means no answers in questionnaire Source: NRA Indicator 2.5.4:

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2.6. STRUCTURE OF MARKET DEMAND Indicator 2.6.5 Effect of the financial crisis on revenues in 2009 Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Indicator 2.6.1 Revenues and volumes generated by consumers vs. business cus- Less than 5% 5-15% more than 15% tomers in 2009, national currency, millions of items Addressed items (domestic) Segment Business customers Private consumers Approximate mar- Letters Increase* Revenue Volume Revenue Volume ket share in the to- Correspondence tal market Reserved area Addressed items (domestic) - - - - - Direct mail Increase* Letters - *B2C: 55% - *C2C: 3% - Publications Increase* *B2B: 33% *C2B: 9% Unaddressed items Increase* Correspondence - - - - - Cross-border mail outbound Decrease* Reserved area - - - - - Express & Parcels Increase* Direct mail - - - - - Total Increase Publications - - - - - Note: * Global revenue evolution from the USP. Difficu Unaddressed items - - - - - Cross-border mail outbound - - - - - from other parameters (negative ones: e-substitution Express - - -- - new product offering, new clients, et Parcels - - -- - decline when compared to its peers. Total - - -- - Source: USP

Note: - means no answers in questionnaire lt to separate the impact of the financial crisis c.). Overall one can say that bp , mail rationalisation… versus positive ones: For the moment we can give you only the estimates of the % of C2X and B2X volumes on total Source:volumes USP of letter post items: C2C: 3%, C2B: 9%, B2C: 55%, B2B: 33% Indicator 2.6.2: Indicator 2.6.3: ost has well resisted to revenue Indicator 2.6.4 Trends in mail substitution Short description (in bullet points) • Increasing trend • Impacting not only private but also more and more business senders • Expected to continue at an even stronger pace due to the introduction of e-registered mail and the conse- quences of the economic crisis (firms’ budget constraints) Source: USP

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2.7. PRICE PERFORMANCE: Indicator 2.8.2 Wage and productivity indicators Incumbent

Wages as a proportion of total costs 68% Indicator 2.7.1 Public tariffs, 2004-2009 Average wage per hour (€) - Segment 2005 2007 2009 Note: - means no answer in questionnaire Single item: 20g tariff letter (Prior) 0.50 0.52 0.59 Source: USP Single item: 100g priority mail - (50-100gr) 1 1.04 1.18 Single item: 100g priority mail - (100-350gr) 1.50 1.56 1.77 Single item: 500g insured 11.5 11.90 12.55 2.9. TECHNOLOGICAL DEVELOPMENTS Single item: 500g registered 6.5 6.90 7.55 Single item: 1 kg parcel (national) 3.10 (Kilopost) 4.30 (Kilopost) 5.70 (Taxipost 24H) Indicator 2.9.1 Innovation, technology and new services Bulk mail: composed of 20g letters (>50 < 0.36 0.37 - Service Do you Volume Remarks 1000pièces) local offer? (million items) Bulk mail: composed of 100g letters (>50 < - 0.77 0.79 1000pièces) local - (50-100gr) Hybrid mail Yes - Click & Post (http://promo.clickandpost.be/wacp/click/ ) products of subsidiary Speos Bulk mail: composed of 100g letters (>50 < - (http://www.post.be/speos/fr/paperdocumentdelivery.html) 1000pièces) local - (100-350gr) 1.02 1.05 Virtual delivery of Yes - digital delivery by Exbo: Note: - means no answers in questionnaire mail http://www.exbo.be/fr/nos-services/digital- On 1 January 2010 the bpost intr delivery/index.html Pick up locations Yes Not applicable Parcels can be picked up at “Points Poste” plies that for standardized domestic items up to 50 for parcels (parcel shops) items), the formerly applied tariff of € 0.59 remain Other examples E-contracting par Certipost (juin 2009) of 10 at least, while single postageoduced stamps the conceptare sold of differentiated pricing for stamps. This im- (insert name) First Service (Aout 2009) as “full rates”. bpost sales figures Digital delivery Carbon Meter (2010) This implies that € 0,596 can be considered as the weighted average tariff. For the ease of the con- (http://www.depostlaposte.be/blog/fr/2010/03/23/la- sumer, booklets of 10 adhesive stamps are available.gram for instance (the large majority of these poste-lance-le-dm-carbon-meter/) Source: USP show that 94 % sof unchanged sales come iffrom stamps purchases are bought of at leastin quantities 10 pieces. Note: - means no answers in the questionnaire 2.8. SOCIAL AND CONSUMERS ASPECTS at € 0.69. These two tariffs are to be considered Source: USP

Indicator 2.8.1 Employment indicators, 2009 Indicator 2.9.2 Statistics on technological progress USP Indicator Value in Increase/decline Employment (thousand), in full time equivalents 29.6 2009 since 2007 Percentage of total country employment Percentage of letter mail benefiting from automated processing (e.g. sorting) 78.3% - Share of civil servants 65.7% Percentage of parcels benefiting from automated processing (e.g. sorting) 90-95% - Share of part time and temporary employment 15.3% Note: - means no answer in questionnaire Share of outsourced and subcontracted employment 3-4% Source: USP Note: - means no answer in questionnaire

Source:*Monthly USP average 2009

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Indicator 2.9.3 Supply of e-commerce services, total market Indicator 2.9.5 Developments within networks and mail consolidation services Question Answer - Incumbent Question Answer Do you supply own e-commerce services? What kind? e-shops for residential and business custom- Have you carried out a major reor- The Belgian Post is in the process of carrying out the implementation of a ers, only for Belgian Post products ganisation of your logistics net- new network structure in its mail network. The approximately 500 distribu- What share of turnover do you generate from own e-commerce Confidential work? For example, decentralising, tion offices will be concentrated into 128 so called operational platforms. services? What is the trend? implementing hub & spoke sys- These are specialized mail preparation centres that receive their round sorted tems? mail from the 5 national sorting centres. From the operational platforms, What own e-commerce services do you plan to develop? Confidential prepared mail will be transported to depots from where the distribution rounds will start. Are you able to indicate how the percentage of your turnover that Confidential originates from or is related to third-party e-commerce transac- Do you use different networks for Most of the time the same network is used for letters and parcels. tions (e.g. purchases on the internet) letters and parcels at collection, Collect: use of same network sorting, transportation or delivery Sorting: main volume sorted by 2 sorting centers for parcels, 5 sorting Source: USP levels? What are the reasons? centers for letters Transport: use of same network Distribution: main volume distributed by dedicated car rounds, other Indicator 2.9.4 Supply of hybrid mail services, total market volume by bike/ foot round Question Answer - Incumbent What is the relative importance of 100% road for domestic mail road, rail and air as modes of trans- Do you supply hybrid mail or virtual delivery solutions? What kind? From “e” to paper: “click & post”, from portation for mail? Have these paper to “e” “digital mailroom”. shares changed recently? Why? If yes, how many years have you been supplying these services for? 2 years Do you offer mail consolidation ser- - What share of turnover do you generate from hybrid mail and/or vir- Confidential vices? What type and to whom? tual delivery solutions? What is the trend? Note: - means no answers in the questionnaire Do you plan to develop (new) hybrid mail / virtual delivery solutions? Confidential Source: USP Source: USP Indicator 2.9.6 Please describe briefly the most important environmental initiatives implemented at your firm Brief answer (in bullet points) Set-up of Green Post programme which main objective is to make boost more environmental friendly production by working on energy reduction (- 15 % in period 2005-2012 for buildings & fleet), reduction of CO2 emissions (-35 % in period 2007-2012 for buildings & fleet), use of sustainable paper, reduce waste and promote sustainable water consumption. Linked to this programme is a major awareness & sensibilisation programme. Purchase of 100 % green electricity since August 2008 Energy audits have been performed in the TOP 100 energy consuming buildings, e.g. in sorting centres, where this has lead to an energy reduction of 10 % Renewable Energy: 20.000 square meters of solar panels already installed and an additional 150.000 square meters are in the pipeline Eco-driving courses have been followed by more than 2,300 drivers by end 2009 ISO-14.001 certification obtained for the 5 sorting centres, similar process ongoing for the headquarters and the stamp factory Exclusive usage of recycled paper or FSC labelled paper since end 2009 Implementation of nation-wide procedures for sorting of waste 3-year partnership with WWF ongoing in order to help projects to materialize Source: USP

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2.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 2.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 90 93.2 97 98 - 98,9 - 99,4 Note: - means no information Source: NRA

Indicator 2.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - 95 92.8 - 97 98.7 - - Note: - means no information Source: Ecorys (2008a)

Indicator 2.10.3 Quality of service indicators Indicator Value Percentage of lost mail No data available Number of postal outlets (post offices and agen- Post offices 734 cies) and number of letter boxes per 10.000 in- Postal points 637 habitants. Sum 1371 (post offices and postal points together ) Letter boxes per 10.000 inhabitant: 13,5 The implementation of CEN standards. Yes Source: NRA

BULGARIA

3.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 3.1.1 Country facts Country facts Value Unit Year Population 7.6 Million 2010 Population growth -7.7 Percent 2000-2010

Population density 68 Pop. / km2 2010 Urbanisation rate 71.1 Percent 2008 GDP 76.0 PPS, billion 2009 GDP/capita 10,000 PPS 2009 Postal services to GDP ’99/09: 0.17%/0.31% Ratio 1998/2008

NRA Communications Regulation Commission (CRC) NRA responsibilities? Frequency of US, uniform tariff rules, USO quality standards, US rates, Special tariffs, USP accounts, User Complaints, Cross subsidy between US and non-US (De- fined in art. 29 (4) of the PSA), licensing of US providers and postal money orders, maintaining a register of non-US providers, adopting measures to ensure confidentiality of correspondence, adopting a system for the formation of postal codes, adopting requirements for density of access points (US providers). Incumbent Bulgaria Post Main activities of incumbent Lettermail, hybrid mail, direct mail, parcels, express, financial services Chapter 3 BULGARIA Employment, incumbent Source of financing

Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

Box 3.1 – Country summary Indicator 3.1.2 Volume of items delivered by segment in total market, millions of The volume of addressed items, express and parcels decreased from 2007 to 2009 with respectively -18% , -18% and -28%. Cross-border outbound increased by 20 percent. items Bulgaria has a draft version of the law implementing Directive 2008/6/EC ready as of July Segment 2005 2007 2009 2010, which is currently in the parliamentary procedure, and is obliged to transpose the direc- Addressed items 82.6 77.37 63.56 tive before 1.1.2011. Letter na 74.62 60.94 USO has been changed in 2009, direct mail now excluded from USO Correspondence na 62.33 43.58 The Bulgarian postal markets have been fully liberalised legally in publications, express and Direct mail na 12.30 17.36 parcels. In correspondence and cross-border outbound there is still reserved area for letters Publications na 2,75 2.62 weighing less than 50g. Unaddressed items 0 0 0 The Bulgarian NPO has 100% market share in correspondence and cross border outbound due Cross-border outbound 5.32 3,9 4.67 to reserved area. The NPO faces intense competition on unaddressed advertising and express Express 7,57 21.11 17.27 delivery. Parcels 0.4 1.11 0.80 There has been no postal-related competition cases after 2007. Total The Bulgarian NPO is exempted for VAT on postal products connected to the reserved area. Source: NRA

BULGARIA

Indicator 3.1.3 Revenues from segments in total market, millions of Euro Indicator 3.2.2 Regulation of services based on new technologies Segment 2005 2007 2009 Question Answer Mail 16,9 21,9 19.62 Are you aware of the presence of services based The service “hybrid mail” is provided on the Bulgarian postal Express 30.7 59.4 68.44 on new technologies in your market? For exam- market. This service is part of the non-universal postal services ple, hybrid mail or virtual delivery networks? (art. 38 of PSA) Logistics 1.0 2.0 1.35 Do you have plans to regulate such products? Financial 2.1 3.9 2.51 For example, confidentiality of hybrid mail? Others Source: NRA Total Source: NRA Indicator 3.2.3 VAT treatment of postal services

Postal product Part of USO? VAT rate Legal basis 3.2. REGULATORY FRAMEWORK AND PRACTICES All services under art. 34 of PSA Yes 0% Art. 49 of the Value Added Tax Act Postal Money orders No 20% Value Added Tax Act Non-universal postal services (item No 20% Value Added Tax Act Indicator 3.2.1 National regulatory framework - NRA 2 and/or 3 of art.38 PSA) Question Yes Name of law Year of en- Remarks Source: NRA, Ministry /no actment Is postal law en- Yes Postal Services Act (PSA) 2000 Last amendments entered into acted? force on the 3.11.2009. The PSA is Indicator 3.2.4 Services ensured as universal services under national law available in English on the www.crc.bg Segment Defined as universal service by law? Are quality standards specified by law? Is Directive 2008/6 No 2010 – second The Directive is transposed par- Basic letter post Yes Yes transposed? half tially Bulk letters No No Is there a law that defines… Direct mail No* No Yes Ministry: PSA Ministry: 2000 Scope of USO? NRA: 2009 Periodicals No No Yes Ministry: Standard quality Ministry: 2000 Non-priority letter s Yes Yes Quality of USO? levels for the universal postal NRA: 2004 Basic parcel post Yes Yes service and service efficiency Bulk parcels No No Yes Ministry: Ordinance on speci- Ministry: 2000 fication of the rules for the NRA: 2004 * According to the PSA Direct mail is defined as an formation and application of basic letter post USO rates? the prices of the services in- Source: NRA cluded in the universal postal service USP accounts? Yes Ministry: PSA 2006 Indicator 3.2.5 Mechanisms to ensure provision of universal service item of correspondence and respectively is part of the Reserved area? Yes Ministry: PSA 2000 Question Answer Authorisation proce- Yes Ministry: PSA 2000 dures? Describe the role played by NRA: The postal operator with the USO shall receive compensation from the state the three mechanisms: budget for any financial deficit which it may prove to the Communications Regula- Universal service No market forces, designation tion Commission and which the said Commission approves as having been incurred fund? and public procurement. Are by the said operator by executing the universal postal service even under economi- User protection? Yes Ministry: PSA 2000 other safeguarding meas- cally unprofitable conditions (art.29 and 29a of PSA) Source: NRA, Ministry ures present? Ministry: Designation of the postal operator with US obligations is stipulated by LPS Source: NRA, Ministry

BULGARIA

Indicator 3.2.6 Legal mechanisms to ensure quality of universal service Indicator 3.2.10 Access to postal infrastructure ensured by Member States Mechanism Yes/No Mechanism Yes/No Access to: Yes/No Other conditions: Yes/No NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Post codes Yes Change of address database No Annual measurement of quality of service? Yes NRA can impose other remedies? No Address database No USP return services Yes Annual publication of results on quality of service Yes Post office boxes No Street letter boxes - monitoring? Source: NRA Delivery boxes Yes Sorting centres - Other conditions: Yes/No Indicator 3.2.7 Financing the net cost of universal service Require downstream access to USP No Mechanism Yes/No Mechanism Yes/No Note: - means no answers in questionnaire Source: NRA Reserved area Yes Who contributes to the compensation fund? - (Incumbent, competitors, other entities) Compensation fund No Public procurement No Indicator 3.2.11 Involvement in competition cases since 2007 Size of compensation fund - Direct compensation from public funds No Case name Case status Postal product(s) con- Issue (if present, in Euro) (ongoing/closed) cerned Note: - means no answers in questionnaire No cases Source: NRA Note: - means no information Indicator 3.2.8 Source: European Commission, DG COMP Indicator 3.2.9 Authorisation/licensing for services within and outside universal service area 3.3. REGULATION OF PRICES AND ACCOUNTING Services within universal services If yes, state services e.g. letter post items, otherwise insert “No” website, website of Bulgarian NCA What licensing procedure is used? Designation and individual license Indicator 3.3.1 Method of price regulation Which universal services are subject to individual license? All Segment Method Remark Which universal services are subject to general authorisation? None Basic letter post Ex ante For all items in this service category Are authorisation requirements published (transparent)? Yes Bulk letters N/A Is the USP authorised under Art. 9*? Yes Direct mail According to the PSA Direct mail is defined as an item of correspon- Services outside universal services Answer Remarks, experiences, dence and respectively is part of the basic letter post problems encountered Periodicals N/A For which services is general authorisation required? None Notification regime for the pro- Non-priority letter post Ex ante For all items in this service category vision of services defined in item 2 and 3 of art.38 PSA. Basic parcel post Ex ante For all items in this service category For which services is an individual license required (ex ante Yes For the provision of service Bulk parcels N/A approval)? “postal money orders” Source: NRA Source: NRA

BULGARIA

Indicator 3.3.2 Accounting requirements Indicator 3.3.4 Promoting access to and affordability of postal services Question Answer Question Answer Question Yes/No If yes, how? Separation of accounts No. of up/down stream accounts - Non-discriminatory prices (Art. 12) required? Yes LPS Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA 2003 Affordability (Art. 12) defined in national law? Yes Methods for determination of the affordability of the UPS prices are elaborated by NRA and adopted by the No. of reserved product accounts * Transparency CoM Unreserved product accounts required? Yes Independent body reviews USP accounts? - Source: NRA, Ministry No. of unreserved product accounts * Last review of USP accounts - Application of tariff principles Body reviewing USP accounts (Type of body) Bulk services within USO? - NRA issues statement of compliance? - 3.4. ROLE OF NRA Does USP conclude individual agreements? Yes Last publish statement of compliance - Individual agreement: cost based price required No Publish cost allocation system? - Indicator 3.4.1 NRA powers Individual agreement: NRA has cost data? No USP financial accounts audited? Yes Task or power Yes/No Task or power Yes/No USP has special tariffs? Yes Last published financial accounts 2008 Require USP cost allocation sys- No (Stipulated by Art. Levy fines? Yes Up- and downstream accounts? No - tem? 29(3) of the PSA) Note: - means no answers in questionnaire Approve USP cost allocation sys- Yes Fines since 1.1.2006 regard- No tem? ing data requirements? * According to the Art. 29 of the the postal operat Review cost allocation to non-USO? No Seek court order? No postal service shall organise and keep both cons Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes (The order of coor- and analytical and separate accounts for: dination of the USP’ tariffs is defined in 1. the universal postal service allocated to services by type; art.65 of the PSA) 2. the non-universal postal services; Require data from non-USPs (Art. Yes Set new rates for USP? Yes 3 other commercial activities. or having an obligation to perform the universal 22*)? Source: NRA olidated accounts for the com-mercial corporation Require data studies? Yes Court orders sought since N/A Require downstream access? No 1.1.2006 regarding data? Indicator 3.3.3 Cost accounting system of the USP Note: *Article 22 of Directive 2008/6/EC Source: NRA Question Answer

What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Is the cost accounting system approved by the National Regulatory Authority? - Indicator 3.4.2 NRA human and financial resources Question Answer Assessment of the system (pros and cons) Size of budget? (€ thousands) 5,420 (for the year 2010) - Number of total staff ? 255 Note: - means no answers in questionnaire (Of which, staff dealing with postal affairs) 10 Source: NRA Source of NRA budget Fees collected from postal operators and from non-postal operators (providers of electronic communication networks and services and fees paid for rights of use of frequencies and numbers). Who approves NRA budget - Note: - means no answers in questionnaire Source: NRA

BULGARIA

Indicator 3.4.3 NRA independence Indicator 3.4.7 Indicator 3.4.8 Question Yes/No Question Answer 3.5. MARKET STRUCTURE AND COMPETITION Can government guide NRA No Who, and under what condi- The central government appoints the on policy? tions can appoint NRA head? NRA head. No specific conditions except the common requirements for all commissioners. Indicator 3.5.1 Information about the incumbent Some NRA decisions require No Who and under what condi- The central government Question Answer Question Answer governmental support? tions can dismiss NRA head? Name of incumbent “Bulgarian Posts” Main activities Postal services Can government suspend No Minimum qualifications for Yes Legal status Corporation 13733 NRA orders? NRA heads? Employment Source: NRA State ownership (percent) 100 Source of financing Source: WIK (2009), ITA/WIK (2009) Indicator 3.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 3.5.2 Incumbent profits, 2009, national currency Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Statistic Value To whom is NRA decision appealed? Supreme Ad- Number of NRA decisions reversed? 0 Total profit in 2009 -2 873 millions BGN ministrative Court Percentage of profit coming from letter mail 1,441 millions BGN Source: NRA Percentage of profit coming from reserved area (if present) 1,296 millions BGN Source: NRA

Indicator 3.4.5 Enforcement of competition rules by NRA and cooperation with NCA Indicator 3.5.3 Mail market segmentation Percentage opened to Question Yes/No Question Yes/No Subject to li- No. of sig- competition Names of significant Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Segment cense / au- nificant Under na- competitors Actual thorisation? competitors Note: -‘NCA’ national competition authority. tional law Source: NRA Addressed items

Letters Indicator 3.4.6 Regulation of user protection procedures and remedies Correspondence Re-served Low Yes below 50 g Question Answer Question Answer Direct mail yes User protection procedures in postal Both USP(s) required to issue annual re- Yes (on USP’s or consumer law? port handling of com- Publications Intense Low Yes plaints) Unaddressed items No Enforcement by NRA or national con- Both NRA issues annual report Yes Cross-border out- Re-served Low Yes sumer protection authority (NCPA)? bound below 50 g Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Express Intense intense No Applies to non-USO services Yes Agency reviewing operator Court Parcels Intense Low Yes Remedies by competent national au- € 5114 (NRA) Total thority? (maximum fee) € 1533 (NCPA) Source: NRA Source: NRA

BULGARIA

Indicator 3.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Indicator 3.6.1 Revenues and volumes generated by consumers vs. business cus- Segment Approximate sum of market shares of 3 main competitors tomers in 2009, national currency, millions of items Segment Business customers Private consumers Approximate mar- Letter post (open area) - Revenue Volume Revenue Volume ket share in the to- Parcels - tal market Express 57 % (2008) Addressed items (domestic) na 33,7 na 29,9 21,4% Unaddressed items - Letters na na na na 20,5% Source: NRA Correspondence na na na na 17,7% Indicator 3.5.5: Reserved area na na na na 14,7% Direct mail na na na na 2,8% Indicator 3.5.6 New entrants since 2008 Publications na na na na 0,9% Segment No. of entrants Approximate market share End-to-end or up/down- Name Unaddressed items na na na na 0,0% stream competition? Cross-border mail outbound na na na na 4,9% Mail 1 Express na 15,7 na 1,6 71,5% Express 17 Parcels na na na 2,2% Logistics 1 Total 100% Financial 1 Note: Letters = addressed mail that is enclosed in an Others Source: NRA Kg; Direct mail =Advertising, marketing or publ vate letters sent by mail; Publications = individua Indicator 3.5.7 Cross border mail Source:catalogues USP and books Main actors (if not re- Terminal dues regu- envelope or other wrapping and weighing at most 2 Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? icity material sent by mail; Correspondence = Pri- 0.770 million items/2009 Reserved below 50 gr No lly addressed periodicals, magazines, newspapers, 0,371 million items/2007 Reserved below 50 gr No Source: NRA Indicat

or 3.5.8 3.6. STRUCTURE OF MARKET DEMAND

BULGARIA

Indicator 3.6.2 Growth rate in revenues and volumes generated by consumers 3.7. PRICE PERFORMANCE: vs. business customers between 2008-2009 Segment Business customers Private consumers Indicator 3.7.1 Public tariffs, 2004-2009 Revenue Volume Revenue Volume Segment 2005 2007 2009 Addressed items (domestic) na -13,35% na -9,79% Single item: 20g tariff letter 0.45 0.55 0.60 Letters na na na na Single item: 100g priority mail na na 1.10 Correspondence na na na na Single item: 500g insured and registered 1.55 1.74 2.14 Single item: 1 kg parcel 1.20/2.15* 1.20/2.15* 1.20/2.15* Reserved area na na na na Bulk mail: composed of 20g letters na na na Direct mail na na na na Bulk mail: composed of 100g letters na na na Publications na na na na Note: * 1.20 within one zone (town of origin is the Unaddressed advertising na na na na Cross-border mail outbound na na na na Source:two Price zones in national (town of currency origin is - different bgn than town of delivery) Express na -15,59% na 14,29% Parcels na na na na 3.8. SOCIAL AND CONSUMERS ASPECTS same as town of delivery). 2.15 for delivery between Total Note: - means no information Indicator 3.8.1 Employment indicators, 2009 Source: USP USP Indicator 3.6.3: Indicator 3.6.4: Employment (thousand), in full time equivalents 10,417 Indicator 3.6.5 Effect of the financial crisis on revenues in 2009 Percentage of total country employment Segment Estimate of the effect of the financial crisis on revenues Share of civil servants (please write ‘decline’ or ‘increase’ below, where relevant) Share of part time and temporary employment Less than 5% 5-15% more than 15% Share of outsourced and subcontracted employment Addressed items (domestic) decline Note: - means no information Letters decline Source: USP Correspondence decline Indicator 3.8.2: Reserved area decline 3.9. TECHNOLOGICAL DEVELOPMENTS Direct mail increase Publications increase No answers were provided Unaddressed items - Cross-border mail outbound decline Express decline Parcels decline Total Note: - means no information Source: USP

BULGARIA

3.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 3.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 80 84.2 95 97.4 - - - - Note: - means no answers in questionnaire Source: NRA

Indicator 3.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 60 50.89 - - Note: - means no information Source: Ecorys (2008a)

Indicator 3.10.3 Quality of service indicators Indicator Value Percentage of lost mail 4,7% Number of postal outlets (post offices and agencies) and number of letter boxes per 4; 7 10.000 inhabitants. The implementation of CEN standards. Yes Note: - means no answers in questionnaire Source: NRA

CYPRUS

4.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 4.1.1 Country facts Country facts Value Unit Year Population 0.8 Million 2010 Population growth 15.6 Percent 2000-2010

Population density 86 Pop. / km2 2010 Urbanisation rate 69.9 Percent 2008 GDP 18.5 PPS, billion 2009 GDP/capita 23,200 PPS 2009 Postal services to GDP ’99/09: 0.32%/0.29% Ratio 1998/2008

NRA Office of the Commissioner for Electronic Communication and Postal Regulation (OCECPR) NRA responsibilities? Authorisation, USO fund, US rates, Special tariffs, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US, Delivery frequency of US, Uniform tariff rules etc Incumbent Cyprus Post Main activities of incumbent Employment, incumbent 644 full time + 202 rural postal distributors Chapter 4 CYPRUS Source of financing - Source: ITA/WIK (2009) Country fiche, Eurostat, NRA

Box 4.1 – Country summary Indicator 4.1.2 Volume of items delivered by segment in total market, millions of The volume of Cyprus postal segments grew from 2007/2008. The largest growth occurred in items international express (50 percent), correspondence (nearly 10 percent), cross-border outbound Segment 2005 2007 2009 (6 percent) unaddressed items (5 percent). Local express and parcels did not experience significant changes. Addressed items Cyprus has an extended deadline for the transposition of Directive 2008/6 until 31 December Letters 2012. The legislation transposing the directive is expected to be adopted during 2012. Correspondence 50 54.6 59.8 (for 2008) Legal market opening is present for express and unaddressed items. In the remainder of the Direct mail N/A N/A N/A segmets, market opening is restricted by the reserved area. Publications N/A N/A N/A The market shares of competitors are low in all segments except express where competition is Unaddressed items 5.5 10.4 10.9 intense. Cross-border outbound 12.3 9.6 10.2 (for 2008) The Cypriot NPO is VAT exempt on universal service products. Express (International) 0.3 0.4 0.6 (for 2008) Express (Local) 2.7 2.6 2.6 (for 2008) Parcels 0.0001 0.0001 0.0001 (for 2008) Total Source: NRA

CYPRUS

Indicator 4.1.3 Revenues from segments in total market, millions of Euro Indicator 4.2.3 VAT treatment of postal services Segment 2005 2007 2009 Postal product Part of USO? VAT rate Legal basis Mail 26 28.7 26.9 Universal service Yes Exemption L.95(I)/2000 Express N/A N/A N/A Source: NRA Logistics N/A N/A N/A Financial N/A N/A N/A Indicator 4.2.4 Services ensured as universal services under national law Others N/A N/A N/A Total Segment Defined as universal service by law? Are quality standards specified by law? Source: NRA Basic letter post Yes Yes/Order 435/2005 Bulk letters Yes Yes/Order 435/2005 Direct mail Yes Yes/Order 435/2005 4.2. REGULATORY FRAMEWORK AND PRACTICES Periodicals Yes Yes/Order 435/2005 Non-priority letter s N/A - Indicator 4.2.1 National regulatory framework Basic parcel post Yes Yes/Order 435/2005 Bulk parcels No - Question Yes/No Name of law Year of en- Remarks actment Note: - means no answers in questionnaire Is postal law enacted? Yes Source: NRA Is Directive 2008/6 transposed? No 2012 Expected Is there a law that defines… Indicator 4.2.5 Mechanisms to ensure provision of universal service Scope of USO? Yes L. 112(I)/2004 2004 Question Answer Quality of USO? Yes Order 435/2005 2005 Describe the role played by the three mechanisms: According to the law 112/2004 the universal services is USO rates? yes L. 112(I)/2004 2004 About affordability market forces, designation and public procurement. Are designated to Cyprus Post. USP accounts? Yes Order 434/2005 2005 other safeguarding measures present? Reserved area? Yes L. 112(I)/2004 2004 Source: NRA Yes L. 112(I)/2004, Order 2005 Authorisation procedures? 432/2005 Universal service fund? Yes L. 112(I)/2004 2004 Indicator 4.2.6 Legal mechanisms to ensure quality of universal service User protection? No Mechanism Yes/No Mechanism Yes/No Other special rights (which)? NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Source: NRA Annual measurement of quality of service? Yes NRA can impose other remedies? No Annual publication of results on quality of service Yes monitoring? Indicator 4.2.2 Regulation of services based on new technologies Source: NRA Question Answer Are you aware of the presence of services based on new technologies Yes. Not in the imminent plans to be in- in your market? For example, hybrid mail or virtual delivery networks? troduced by the providers. Do you have plans to regulate such products? For example, confiden- We are in the process of evaluating this tiality of hybrid mail? option Source: NRA

CYPRUS

Indicator 4.2.7 Financing the net cost of universal service Indicator 4.2.10 Access to postal infrastructure ensured by Member States Mechanism Yes/No Mechanism Yes/No Access to: Yes/No Other conditions: Yes/No Reserved area Yes Who contributes to the compensation fund? Incumbent Post codes Yes Change of address database Yes (Incumbent, competitors, other entities) Address database No USP return services No Compensation fund Yes Public procurement No Post office boxes No Street letter boxes No Size of compensation fund - Direct compensation from public funds Delivery boxes No Sorting centres No (if present, in Euro) Other conditions: Yes/No Note: - means no answers in questionnaire Require downstream access to USP No Source: NRA Source: NRA

Indicator 4.2.8 Cost of universal service obligation and method for its calculation Indicator 4.2.11: Involvement in competition cases since 2007

Question Answer What is the cost estimate of USO? (if available, in Euro) N/A 4.3. REGULATION OF PRICES AND ACCOUNTING What is the name of calculation method? (if available) N/A Short description of calculation method (if available) N/A Indicator 4.3.1 Method of price regulation Is a thorough documentation of calculation method available? Order 434/2005 describes the basic principles but Where? not the calculation methodology Segment Method Remark Is calculation method approved by the NRA? N/A Basic letter post ex ante Does NRA calculate USO cost? No Bulk letters ex ante Source: NRA Direct mail ex ante Periodicals ex ante Non-priority letter post ex ante Indicator 4.2.9 Authorisation/licensing for services within and outside universal Basic parcel post ex ante service area Bulk parcels ex ante Services within universal services If yes, state services e.g. letter post Source: NRA items, otherwise insert “No” What licensing procedure is used?(designation, general authorisation, general authorisation and individual li- individual license) cense Which universal services are subject to individual license? All Which universal services are subject to general authorisation? None Are authorisation requirements published (transparent)? Yes Is the USP authorised under Art. 9*? Yes Services outside universal services Answer For which services is general authorisation required? Services outside universal services (Local & international express courier services, exchange of documents, Postal Boxes etc) For which services is an individual license required (ex ante approval)? No Note: *)Article 9 of Directive2008/6/EC Source: NRA

CYPRUS

4.3.2 Accounting requirements 4.4. ROLE OF NRA Question Answer Question Answer Separation of accounts No. of up/down stream accounts N/A Indicator 4.4.1 NRA powers Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA N/A Power Yes/No Power Yes/No No. of reserved product accounts N/A Transparency Require USP cost allocation system? Yes Levy fines? Yes Unreserved product accounts required? Yes Independent body reviews USP accounts? N/A Yes Fines levied since 1.1.2006 regard- Yes Approve USP cost allocation system? No. of unreserved product accounts - Last review of USP accounts N/A ing data requirements? Body reviewing USP accounts (Type of body, NRA Review cost allocation to non-USO? Yes Seek court order? N/A Application of tariff principles e.g. NRA, USP) Require data from USP (Art.22*)? Yes Cancel unlawful rates? Yes To bulk services within USO? Yes NRA issues statement of compliance? Yes Require data from non-USPs (Art.22*) Yes Set new rates for USP? Yes Does USP conclude individual agreements? No Last publish statement of compliance N/A Require data studies? Yes Court orders sought since 1.1.2006 N/A regarding data? Individual agreement: cost-based price required? N/A Publish cost allocation system? No Require downstream access? N/A Individual agreement: NRA has cost data? No USP financial accts audited? Yes Note: *) Article 22 of Directive 2008/6/EC USP has special tariffs? Yes Last published financial accounts N/A Source: NRA To up- and downstream accounts? Yes Note: - means no answers in questionnaire Source: NRA Indicator 4.4.2 NRA human and financial resources Question Answer Size of budget? (€ thousands) €5789 Indicator 4.3.3 Cost accounting system of the USP Number of total staff ? 40 Question Answer (Of which, staff dealing with postal affairs) 4 What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Source of NRA budget Fees from licensed operators Is the cost accounting system approved by the National Regulatory Authority? - Who approves NRA budget Council of ministers and the Parliament Assessment of the system (pros and cons) Source: NRA USP has submitted the first results with many problems such as no reconciliation among the accounting and costing system, allocation factors not justified etc Note: - means no answers in questionnaire Indicator 4.4.3 NRA independence Source: NRA Question Yes/No Question Answer Does the government have a formal right Yes Who, and under what conditions, can Council of Minis- Indicator 4.3.4 Promoting access to and affordability of postal services to guide NRA on policies? appoint NRA head? ters L.112(I)/2004 Some NRA decisions require governmen- No Who, and under what conditions, can L.112(I)/2004 Question Yes/No If yes, how? tal support? dismiss NRA head? Non-discriminatory prices (Art. 12*) required? No The Directive 2008/6/EC has not been implemented Can government suspend NRA orders? No Minimum qualifications for NRA heads Yes Affordability (Art. 12*) defined in national law? No The Directive 2008/6/EC has not been implemented Source: NRA Note: Article 12 of Directive 2008/6/EC Source: NRA

CYPRUS

Indicator 4.4.4 Complaint handling – appeal from NRA decisions 4.5. MARKET STRUCTURE AND COMPETITION Question Answer Question Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Indicator 4.5.1 Information about the incumbent To whom is NRA decision appealed? High Court Number of NRA decisions reversed? None Question Answer Question Answer Source: NRA Name of incumbent Cyprus Post Main activities

Legal status Part of Ministry of Communications and Works Employment 644 full time + Indicator 4.4.5 Enforcement of competition rules by NRA and cooperation with 202rural postal dis- NCA tributors Question Yes/No Question Yes/No State ownership (percent) 100% Source of fi- Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes nancing Note: ‘NCA’ national competition authority. Source: ITA/WIK (2009) and Cyprus Post Annual Report (2008) Source: NRA Indicator 4.5.2

Indicator 4.4.6 Regulation of user protection procedures and remedies Indicator 4.5.3 Mail market segmentation Percentage opened to Subject to li- Question Answer Question Answer No. of signifi- competition cense / au- Names of significant User protection procedures in postal or con- Both USP(s) required to issue annual report Yes Segment cant competi- Under na- thorisation? competitors sumer law? Actual tors tional law (Yes/No) Enforcement by NRA or national consumer Both NRA issues annual report Yes protection authority? Addressed items Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Letters Applies to non-USO services Yes Agency reviewing operator Yes Correspondence Low Low Yes None Remedies by competent national authority? Yes (N/A) Direct mail Low Low Yes (maximum fine) Publications Source: NRA Unaddressed items Intense Low No Cross-border out- Low Low Indicator 4.4.7 Main issues of discussion between NRA and USP bound Express Intense Intense Yes UPS, DHL, TNT, GAP Akis Issue Short description (in bullet points) Express, Travel Express, Costing issues, - Submitted Costing Data were not reliable ACS Low quality measurement results - Low quality below the levels set in the relevant legislation Parcels Low Low Yes Refers to the USO Regulatory changes - Scepticisms of the USP towards the market opening in 2013 Total Source: NRA Source: NRA

Indicator 4.4.8 NRA relations with customer associations Example of relation Short description (in bullet points) Informative Public consultations Source: NRA

CYPRUS

Indicator 4.5.4 Sum of market shares of 3 main competitors (excl. incumbent) 4.7. PRICE PERFORMANCE: Segment Approximate sum of market shares of 3 main competitors Letter post (open area) N/A Indicator 4.7.1 Public tariffs, 2004-2009 (EUR) Parcels N/A Segment 2005 2007 2009 Express International Express (DHL, UPS, TNT, FedEx) Local Express (GAP Akis Express, ACS Express Courier, Travel Express) Single item: 20g tariff letter 0,3 0,4 0,4 Unaddressed items N/A Single item: 100g priority mail Source: NRA Single item: 500g insured and registered Single item: 1 kg parcel 3,1

Indicator 4.5.5: Mergers and acquisitions of incumbent since 2007 Date Name of acquired company Main activities of the acquired company Main objectives behind the acquisition Bulk mail: composed of 20g letters Indicator 4.5.6 New entrants since 2008 Bulk mail: composed of 100g letters Segment No. of Approximate End-to-end or Name Source: USP entrants market share up/downstream competition? Mail N/A N/A 4.8. SOCIAL AND CONSUMERS ASPECTS Express 2 Below < 4% N/A Universal Air Couriers D.K.CITY EXPRESS Logistics N/A N/A Financial N/A N/A No answers provided Others N/A N/A Source: NRA 4.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 4.5.7 Cross border mail No answers provided Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Ν/Α Yes Yes 4.10. QUALITY OF SERVICE DEVELOPMENTS Source: NRA Indicator 4.10.1 Transit time for domestic priority mail, 2009 Indicator 4.5.8 Presence and role of mail consolidators in the market D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 Question Answer dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Are companies offering mail consolidation services present in the market? No 90 86.4 - ‐ 97 99.4 - - How large is the turnover of mail consolidators in relation to the postal market? Ν/Α Note: - means no answers in questionnaire Have you handled any competition cases involving mail consolidator? Ν/Α Source: NRA Source: NRA

4.6. STRUCTURE OF MARKET DEMAND

No answers provided

CYPRUS

Indicator 4.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 58.1 - - Note: - means no information Source: Ecorys (2008a)

Indicator 4.10.3 Quality of service indicators Indicator Value Percentage of lost mail Ν/Α Number of postal outlets (post offices and agencies) and number of 56 Permanent Offices , 1107 Postal Repre‐ letter boxes per 10.000 inhabitants. sentatives, 1001 for the whole Cyprus The implementation of CEN standards. 13850 Source: NRA

CZECH REPUBLIC

5.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 5.1.1 Country facts Country facts Value Unit Year Population 10.5 Million 2010 Population growth 2.3 Percent 2000-2010 Population density 133 Pop. / km2 20010 Urbanisation rate 73.5 Percent 2008 GDP 198.9 PPS, billion 2009 GDP/capita 18,900 PPS 2009 Postal services to GDP ’99/09: 0.48%/0.46% Ratio 1998/2008

NRA Czech Telecommunication Office (CTO) NRA responsibilities? Set the USP, set the scope of USO, set the quality parameters, monitoring of fulfilment of USP duties, monitoring of satisfying of customer's needs Incumbent Česká pošta, s.p Main activities of incumbent Postal services Employment, incumbent 34 828 Chapter 5 CZECH Source of financing Self-financing Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

REPUBLIC Indicator 5.1.2 Volume of items delivered by segment in total market, millions of items (in millions) Segment 2005 2007 Addressed items 1,063 1,107 Letters 666 724 Box 5.1 – Country summary Correspondence* 535 503 The volumes of addressed and unaddressed items remained relatively stable between 2007- Direct mail* 143 152 2009, at 1.1 billion and 2 billion items, respectively. The volume of parcels delivered by the NPO Publications* 78 52 declined by 10 percent from 1 billion to 0.9 million items Unaddressed items 1,998 1,977 Czech Republic has an extended deadline for the transposition of Directive 2008/6 until 31 De- Cross-border outbound N/A N/A cember 2012. As of 2010, there was no draft transposition law. Transposition is expected over Express (parcels included) 24 44 the course of 2011 or later. Parcels* 1,0 0,9 The correspondence mail segment is reserved area as of 2010. Total - - The actual competition is high for cross border outbound mail as well as parcels and express. Note: *) Czech Post Only The NRA is considering the regulation of confidentiality aspects related to the delivery of hy- Source: Ministry brid mail. The Czech NPO is VAT exempted for all USO products.

CZECH REPUBLIC

Indicator 5.1.3 Revenues from segments in total market, millions of Euro 5.2. REGULATORY FRAMEWORK AND PRACTICES Segment 2005 2007 Mail - - Indicator 5.2.1 National regulatory framework Express - - Question Yes/no Name of Year of enactment Remarks Logistics - - law Financial - - Is postal law en- Yes Act on 2000; 2005 Others - - acted? Postal Ser- Total 570,37 EUR 639,15 EUR vices; Amendment Note: - means no answers in the questionnaire act Source: NRA Is Directive No 2011 or later 2008/6 transposed? Is there a law that defines… Scope of USO? Yes 2008 NRA: Pursuant to a licence issued according to the Act on Postal Services Ministry: Defined by NRA according to the Act on Postal Services Quality of USO? Yes 2008 NRA: Pursuant to the licence Ministry: defined by NRA according to the Act on Postal Services USO rates? No USP accounts? Yes 2008 NRA: Pursuant to the licence Ministry: defined by NRA according to the Act on Postal Services Reserved area? Yes 2005 Authorisation pro- NRA: - 2009 NRA: No need of authorisations cedures? Ministry: Yes Universal service No fund? User protection? Yes 2008 NRA: A task for the NRA Ministry: Pursuant to the licence Note: - means no answers in questionnaire The Ministry and the NRA have answered differently on some questions Source: NRA, Ministry

Indicator 5.2.2 Regulation of services based on new technologies Question Answer (in bullet points) Are you aware of the presence of services based on new technologies in Both hybrid mail and virtual delivery your market? For example, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? For example, confidential- Only confidentiality of hybrid mail ity of hybrid mail? Source: NRA

CZECH REPUBLIC

Indicator 5.2.3 VAT treatment of postal services Indicator 5.2.6 Legal mechanisms to ensure quality of universal service Postal product Part of USO? VAT rate Legal basis Mechanism Yes/No Mechanism Yes/No NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes All postal services provided by USP Partly 0 % Act. No. 235/2004 Coll., on VAT Annual measurement of quality of service? Yes NRA can impose other remedies? No All postal services, provided by other operators No 20 % Act. No. 235/2004 Coll., on VAT Annual publication of results on quality of service Yes Source: Ministry, NRA monitoring? Source: NRA Indicator 5.2.4 Services ensured as universal services under national law Segment Defined as universal service by law? Are quality standards specified by law? Indicator 5.2.7 Financing the net cost of universal service Basic letter post Yes Yes Mechanism Yes/No Mechanism Yes/No Bulk letters - NRA: Yes, part of basic letter Reserved area Yes Who contributes to the compensation fund? N/A post (Incumbent, competitors, other entities) Direct mail NRA: No - Compensation fund No Public procurement No USP: - Size of compensation fund N/A Direct compensation from public funds No Periodicals No - (if present, in Euro) Non-priority letters NRA: N/A NRA: No Source: NRA USP: No Basic parcel post Yes Yes Bulk parcels - NRA: Yes, part of basic parcel Indicator 5.2.8 Cost of universal service obligation and method for its calculation post Question Answer Note: - means no answer in questionnaire What is the cost estimate of the USO? (if available, in Euro) Cost estimate does not exist The USP and the NRA have answered differently on some questions Source: NRA, USP Source: NRA, USP

Indicator 5.2.9 Authorisation/licensing for services within and outside universal Indicator 5.2.5 Mechanisms to ensure provision of universal service service area Question Answer Services within universal services If yes, state services e.g. letter Describe the role played by the NRA: public procurement (exclusively 1 USP) but in practice only 1 applicant for post items, otherwise insert “No” three mechanisms: market providing of US forces, designation and public Ministry: At present, the US provision is guaranteed through the licence imposing What licensing procedure is used? None procurement. Are other safe- on its holder a duty to ensure the US. The future mechanism has not been decided Which universal services are subject to individual license? No guarding measures present? on yet; nevertheless, the Ministry supposes that, regarding conditions in the Which universal services are subject to general authorisation? None Czech postal market, the US will be ensured by means of designation in the future Are authorisation requirements published (transparent)? N/A as well. Is the USP authorised under Art. 9*? No Source: NRA, Ministry Services outside universal services Answer For which services is general authorisation required? No For which services is an individual license required (ex ante approval)? No Source: NRA

CZECH REPUBLIC

Indicator 5.2.10 Access to postal infrastructure ensured by Member States Indicator 5.3.2 Accounting requirements Access to: Yes/No Other conditions: Yes/No Question Answer Question Answer Post codes Yes Change of address database No Separation of accounts No. of up/down stream accounts - Address database No USP return services No Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - Post office boxes No Street letter boxes No No. of reserved product accounts 1 Transparency Delivery boxes No Sorting centres No Unreserved product accounts required? Yes Independent body reviews USP ac- Yes Other conditions: Yes/No counts? Require downstream access to USP No No. of unreserved product accounts 28 Last review of USP accounts 2008 Source: NRA Application of tariff principles Body reviewing USP accounts (Type of Independent body, e.g. NRA, USP) auditor approved To bulk services within USO? - by NRA Indicator 5.2.11: Does USP conclude individual agreements? No NRA issues statement of compliance? Yes Individual agreement: cost-based price re- N/A Last publish statement of compliance 2008 5.3. REGULATION OF PRICES AND ACCOUNTING quired? Individual agreement: NRA has cost data? N/A Publish cost allocation system? No Indicator 5.3.1 Method of price regulation USP has special tariffs? No USP financial accts audited? Yes To up- and downstream accounts? - Last published financial accounts 2008 Segment Method Remark Note: - means no answer in questionnaire Basic letter post ex ante (several prices) Ministry of Finance for domestic postal services, Czech Tele- ex post (all other prices) communication Office for outbound postal services Source: NRA

Bulk letters Segment not defined Direct mail No Indicator 5.3.3 Cost accounting system of the USP Periodicals No Question Answer Non-priority letter post Segment not defined What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Basic parcel post ex ante (several prices) Ministry of Finance for domestic postal services, Czech Tele- Is the cost accounting system approved by the National Regulatory Authority? Yes ex post (all other prices) communication Office for outbound postal services Assessment of the system (pros and cons) Bulk parcels Segment not defined Source: NRA - Note: - means no answers in questionnaire Source: NRA, USP

Indicator 5.3.4 Promoting access to and affordability of postal services Question Yes/No If yes, how? Non-discriminatory prices (Art. 12) re- Yes In the Act on Postal Services quired? Affordability (Art. 12) defined in na- Yes In the Act on Postal Services tional law? Source: NRA

CZECH REPUBLIC

5.4. ROLE OF NRA Indicator 5.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 5.4.1 NRA powers Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Task or power Yes/No Task or power Yes/No To whom is NRA decision appealed? Court Number of NRA decisions reversed? 7 Source: NRA Require USP cost allocation system? Yes Levy fines? Yes Yes Fines levied since 1.1.2006 regarding data require- No Approve USP cost allocation system? ments? Review cost allocation to non-USO? No Seek court order? No Indicator 5.4.5 Enforcement of competition rules by NRA and cooperation with Require data from USP (Art.22*)? Yes ** Cancel unlawful rates? No NCA Require data from non-USPs (Art.22*) Yes ** Set new rates for USP? No Question Yes/No Question Yes/No Require data studies? No Court orders sought since 1.1.2006 regarding data? No Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No Require downstream access? No Note: ‘NCA’ national competition authority. Note: *) Article 22 of Directive 2008/6/EC Source: NRA

**) This data is required by Ministry of Industry and Trade, not NRA. Source: NRA Indicator 5.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Indicator 5.4.2 NRA human and financial resources User protection procedures in Postal law USP(s) required to issue annual report Yes Question Answer postal or consumer law? Size of budget? (€ thousands) 23 434 Enforcement by NRA or national NRA NRA issues annual report Yes consumer protection authority? Number of total staff? 447 Applies to non-USP(s) in USO area? Yes *) Review of operator decision ensured Yes (Of which, staff dealing with postal affairs) 5 Applies to non-USO services Yes *) Agency reviewing operator NRA Source of NRA budget General budget of the State or government Remedies by competent national 2 mil. CZK Who approves NRA budget Parliament authority? (maximum fine) (0,077 mil. EUR) Source: NRA Note: *) This will come into force over a period of several months Source: NRA Indicator 5.4.3 NRA independence Indicator 5.4.7 Question Yes/No Question Answer Indicator 5.4.8 NRA relations with customer associations Does the government have a formal right No Who, and under what conditions, can Government Example of relation Short description (in bullet points) to guide NRA on policies? appoint NRA head? Some NRA decisions require governmental No Who, and under what conditions, can Government *) Association for protecting consumers Consultations support? dismiss NRA head? Source: NRA Can government suspend NRA orders? No Minimum qualifications for NRA heads Yes *) Note: *) The candidate shall be a Czech citizen and

have at least 5-year experience in the areas of of office is 3 years. The NRA head may be withdrawn in case of gross breach, or repeatedly committed minor breaches, of his duties, in the case ate Source: NRA shall enjoy full legal capa electronic communications,

city, possess integrity and of sickness permanently pr economics or law. Term 47

eventing him to offici-

CZECH REPUBLIC

5.5. MARKET STRUCTURE AND COMPETITION Indicator 5.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Segment Approximate sum of market shares of 3 main competitors

Indicator 5.5.1 Information about the incumbent Letter post (open area) 15 % (estimate) Question Answer Question Answer Parcels 40 % (estimate) Name of incumbent Česká pošta, s.p. Main activities Postal services Express 60 % (estimate) Legal status State enterprise Employment 34 828 Unaddressed items - State ownership (percent) 100 % Source of financing Self-financing Note: - means no answer in questionnaire Source: USP

Source: NRA Indicator 5.5.5 Indicator 5.5.2 Incumbent profits, 2009, national currency Statistic Value Indicator 5.5.6 New entrants since 2008 Total profit in 2009 554 M CZK Segment No. of Approximate market End-to-end or Name Percentage of profit coming from letter mail - en- share up/downstream com- Percentage of profit coming from reserved area (if present) - trants petition? Note: - means no answer in questionnaire Mail No Source: USP Express No Logistics - Indicator 5.5.3 Mail market segmentation Financial - Others - Percentage opened to No. of sig- Note: - means no answer in questionnaire competition Subject to li- nificant Source: NRA Under na- cense / au- competi- Names of significant Actual Segment tional law thorisation? tors competitors Addressed items No 2 Mediaservis, TNT Post CR Indicator 5.5.7 Cross border mail Letters Reserved for Main actors (if not reserved to Terminal dues regu- Correspondence Reserved be- Volume (outbound) USP? incumbent) lated per Art. 13? low 50 g 52.5 million items per year No Czech Post, TNT, DHL, UPS, FedEx Yes (only USP) Direct mail Source: NRA Publications Unaddressed items No Cross-border out- No 4 TNT, DHL, UPS, FedEx Indicator 5.5.8 Presence and role of mail consolidators in the market bound Question Answer Express No 3 DHL, PPL CZ, General Lo- Are companies offering mail consolidation services present in the market? Yes gistic Systems CR How large is the turnover of mail consolidators in relation to the postal market? N/A Parcels No 3 DHL, PPL CZ, General Lo- gistics Systems CR Have you handled any competition cases involving mail consolidator? No Total 2 Mediaservis, TNT Post CR Source: NRA Source: NRA

CZECH REPUBLIC

5.6. STRUCTURE OF MARKET DEMAND Indicator 5.6.3 Trends in mail substitution Short description (in bullet points)

• Letter post by electronic communications Indicator 5.6.1 Revenues and volumes generated by consumers vs. business cus- • Letter post by electronic data boxes (communication between government organizations and commercial tomers in 2009, national currency, millions of items companies) Source: USP Segment Business customers Private consumers Approximate Revenue Volume Revenue Volume market share in the total market Indicator 5.6.4 Effect of the financial crisis on revenues in 2009 Addressed items (domestic) 6599 665 2597 161 - Segment Estimate of the effect of the financial crisis on revenues Letters 6438 628 2596 161 - (please write ‘decline’ or ‘increase’ below, where relevant) Correspondence 5766 461 2593 160 - Less than 5% 5-15% more than 15% Reserved area N/A N/A N/A N/A - Addressed items (domestic) Decline Direct mail 672 167 3 1 - Letters Decline Publications 161 37 1 0 - Correspondence Decline Unaddressed items 393 1232 83 290 - Reserved area Decline Cross-border mail outbound 311 11 840 27 - Direct mail Decline Express 22 1 571 - Publications Decline Parcels 1576 22 789 10 - Unaddressed items Decline Total 8901 1931 4366489 - Cross-border mail outbound Decline Source: USP Express Increase Parcels Increase Indicator 5.6.2 Growth rate in revenues and volumes generated by consumers Total Increase vs. business customers between 2008-2009 Source: USP Segment Business customers Private consumers Revenue Volume Revenue Volume 5.7. PRICE PERFORMANCE: Addressed items (domestic) + 0,32 % - 4,32 % - 6,52 % - 8,57 % Letters + 0,61 % - 2,79 % - 6,52 % - 8,57 % Correspondence + 0,93 % -1,73 % - 5,80 % - 6,45 % Indicator 5.7.1 Public tariffs, 2004-2009, national currency Reserved area N/A N/A N/A N/A Segment 2005 2007 2009 Direct mail - 1,99 % - 6,10 % - 88,84 % - 93,32 % Single item: 20g tariff letter 7,50 CZK 10,00 CZK 10,00 CZK Publications - 10,01 % - 24,24 % - 99,99 % - 99,99 % Single item: 100g priority mail 15,00 CZK 14,00 CZK 14,00 CZK Unaddressed advertising - 21,71 % - 18,53 % + 19,96 % + 11,20 % Single item: 500g insured and registered 28,00 CZK 28,00 CZK 37,00 CZK Cross-border mail outbound - 9,61 % - 25,40 % - 11,09 % - 15,93 % Single item: 1 kg parcel 30,00 CZK 30,00 CZK 43,00 CZK Express + 2,86 % - 3,68 % + 5,19 % - 3,26 % Bulk mail: composed of 20g letters - - - Parcels + 0,27 % - 0,97 % + 30,11 % + 25,43 % Bulk mail: composed of 100g letters - - - Total - 1,28 % - 14,03 % + 1,95 % + 2,33 % Note: - means no answer in questionnaire Source: USP Source: USP

CZECH REPUBLIC

Indicator 5.9.3 Supply of e-commerce services, total market 5.8. SOCIAL AND CONSUMERS ASPECTS Question Answer - Incumbent Do you supply own e-commerce services? What kind? No What share of turnover do you generate from own e-commerce services? What is the N/A Indicator 5.8.1 Employment indicators, 2009 trend? USP What own e-commerce services do you plan to develop? E-shop Employment (thousand), in full time equivalents 34,828 Are you able to indicate how the percentage of your turnover that originates from or No Percentage of total country employment is related to third-party e-commerce transactions (e.g. purchases on the internet) Share of civil servants - Source: USP Share of part time and temporary employment 26,26 % Share of outsourced and subcontracted employment - Indicator 5.9.4 Supply of hybrid mail services, total market Note: - means no answers in questionnaire Question Answer - Incumbent Source: USP Do you supply hybrid mail or virtual delivery solutions? What kind? Yes - both hybrid mail and virtual delivery solutions If yes, how many years have you been supplying these services for? Hybrid mail - 16 years, virtual delivery ser- Indicator 5.8.2 Wage and productivity indicators vices - 16 years Incumbent What share of turnover do you generate from hybrid mail and/or vir- 1 % Wages as a proportion of total costs 65,8 % tual delivery solutions? What is the trend? Average wage per hour (€) 134,4 CZK Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes Source: USP Source: USP

Indicator 5.9.5 Developments within networks and mail consolidation services 5.9. TECHNOLOGICAL DEVELOPMENTS Question Answer Have you carried out a major reorganisation of your logistics network? No Indicator 5.9.1 Innovation, technology and new services For example, decentralising, implementing hub & spoke systems? Do you use different networks for letters and parcels at collection, Only at delivery - technological reasons Service Do you offer? Volume (million Do you plan to offer? sorting, transportation or delivery levels? What are the reasons? (Yes/No) of items) (Yes/No) What is the relative importance of road, rail and air as modes of Road is widely preferred to rail; air is used Hybrid mail Yes 105 Yes transportation for mail? Have these shares changed recently? Why? only exceptionally, no changes expected Virtual delivery of mail Yes 0 Yes Note: - means no answers in questionnaire Pick up locations for parcels (parcel shops) No N/A Yes Source: USP Other examples (insert name) Yes 3 Yes Source: USP

Indicator 5.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007 Percentage of letter mail benefiting from automated processing (e.g. sorting) 38,12 % + 5,28 % Percentage of parcels benefiting from automated processing (e.g. sorting) 36,65 % + 7,43 % Source: USP

CZECH REPUBLIC

Indicator 5.9.6 Please describe briefly the most important environmental initia- Indicator 5.10.2 Transit time for cross-border priority mail, 2007 tives implemented at your firm D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 Brief answer (in bullet points) dard (% actual dard (% actual dard (% actual dard (% actual • Guidelines issued to bulk customers on lowering the carbon footprint of their mailings. FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) • Provide all of the Company’s electricity needs from renewable sources from 2010 N/A N/A N/A N/A 85 58.1 N/A N/A • Divert 70 % of office waste away from landfill sites and recycle Source: Ecorys (2008a) • Obtain a BER (Building Energy Rating) certificate for all the Company’s larger buildings • Make savings on utility and fuel costs (electricity, heating oil and for vehicle fleet) • Achieve a 20 % reduction in carbon emissions by 2010 Indicator 5.10.3 Quality of service indicators Note: - means no information Indicator Value Source:USP Percentage of lost mail 0,012 % (2008)

Number of postal outlets (post offices and agencies) and 3,23 postal outlets (per 10.000 inh.) 5.10. QUALITY OF SERVICE DEVELOPMENTS number of letter boxes per 10.000 inhabitants. 22 letter boxes (per 10.000 inh.) The implementation of CEN standards. Yes (only EN 13850)

Source: NRA Indicator 5.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 91 92.09 N/A N/A N/A N/A N/A N/A Source: NRA

DENMARK

A potential legal barrier to competition in the Danish postal market is the reserved area. All postal products related to the USO are VAT exempt for the Danish NPO.

6.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 6.1.1 Country facts Country facts Value Unit Year Population 5.5 Million 2010 Population growth 3.8 Percent 2000-2010 Population density 128 Pop. / km2 2010 Urbanisation rate 86.7 Percent 2008 GDP 153.1 PPS, billion 2009 GDP/capita 27,700 PPS 2009 Postal services to GDP ’99/09: 1.01%/0.90% Ratio 1998/2008

NRA Færdselsstyrelsen (Road Safety and Transport Agency, Postal Supervisory Depart- ment) NRA responsibilities? Frequency of US, Weight limit US parcels, Scope of reserved area, Authorisation procedures, Uniform tariff rules, US rates, Quality of US, User complaints Incumbent Post Danmark A/S Chapter 6 DENMARK Main activities of incumbent Letter mail Employment, incumbent - Source of financing - Note: - means no answers in questionnaire Box 6.1 – Country summary Source: ITA/WIK (2009) Country fiche, Eurostat, USP, NRA The volume of letter mail and unaddressed items declined by respectively 4 percent and 10 percent from 2007 to 2009. The amount of parcels delivered increased by 8 percent. Denmark has a draft postal law with provisions implementing the Directive 2008/6/EC ready as of July 2010 (currently in the parliamentary procedure1), and is obliged to transpose the directive before 1.1.2011. In 2009, Post Danmark and Posten AB merged forming Posten Norden AB. The Danish state maintains a 40 percent stake in the new entity, while the rest is held by the Swedish government. The correspondence mail segment is a reserved area for items under 50g as of 2010. Since the exit of Citymail DK (a subsidiary of Norway Post) in 2009, the Danish NPO has monopoly in the market for correspondence. Denmark has experienced four competition cases associated with postal services since 2007.

1http://www.ft.dk/dokumenter/tingdok.aspx?/samling/20101/lovforslag/L44/som _fremsat.htm

DENMARK

Indicator 6.1.2 Volume of items delivered by segment in total market, millions of 6.2. REGULATORY FRAMEWORK AND PRACTICES items Segment 2005 2007 2009 Indicator 6.2.1 National regulatory framework Addressed items - - - Question Yes/No Name of law Year of enactment Remarks Letters* 1,672 1,52 1,46 Is postal law en- Yes The Provision 2004* Correspondence - - - acted? of Postal Ser- Direct mail - - - vices Act Publications - - - Is Directive 2008/6 No transposed? Unaddressed items 3,642 4,3 3,888 Is there a law that defines… Cross-border outbound - - - Scope of USO? Yes NRA: 2005 Express - - - Ministry: 2004 Parcels 0,058 0,062 0,067 Quality of USO? Yes NRA: 2005 Total - - - Ministry: 2004 Note: - Means no answer in questionnaire USO rates? Yes NRA: 2005 *The Danish legislation does not distinguish betw Ministry: 2004 USP accounts? Yes Ministry: 1996 Revised in 2006 Source: NRA Reserved area? Yes NRA: 2005 Ministry: 2004 Indicator 6.1.3 Revenues from segments in total market, millions of Euro Authorisation proce- Yes NRA: 2005 Segment 2005 2007 2009 dures? Ministry: 2004 Universal service No Mail - een ”direct- mail” and other kinds of - letter mail. fund? Express - - - User protection? Yes NRA: 2005 Logistics - - - Ministry: 2004 Financial - - - Other special rights Yes 2004 The issuing of stamps bearing the in- Others - - - (which)? scription “Denmark” and usage of the state crown as a symbol of the Univer- Total 15.304 21.771 22.292 sal Service guaranteed by the state Note: - Means no answer in questionnaire Note: - means no answers in questionnaire Source: NRA * The Provision of Postal Services Act was adop

1 January 2005. Source:The NRA, Ministry Ministry and the NRA have answered somewhat differently on some questions

Indicator 6.2.2 Regulation of services basedted on by newParliament technologies in 2004 and came in to force on Question Answer (in bullet points) Are you aware of the presence of services based on new Only handling of postal items in their final form is technologies in your market? For example, hybrid mail or regulated by Danish postal legislation virtual delivery networks? Do you have plans to regulate such products? For exam- No ple, confidentiality of hybrid mail? Source: NRA

DENMARK

Indicator 6.2.3 VAT treatment of postal services Indicator 6.2.7 Financing the net cost of universal service VAT rate (incl. Mechanism Yes/No Mechanism Yes/No Postal product Part of USO? exemptions) Legal basis Reserved area Yes Who contributes to the compensation fund? N/A Letters up to 2 kg Yes Exempted Danish VAT Legislation (Incumbent, competitors, other entities) Newspapers and magazines up to 2 kg Yes Exempted Compensation fund No Public procurement No Parcels up to 20 kg Yes Exempted Size of compensation fund N/A Direct compensation from public funds No Business-to-business parcels, Courier services No 25% Source: NRA Source: NRA

Indicator 6.2.8 Cost of universal service obligation and method for its calculation Indicator 6.2.4 Services ensured as universal services under national law Question Estimate: USP Estimate: Copehagen Economics** Segment Defined as universal service by law? Are quality standards specified by law? What is the cost estimate of - 150 m DKK or 1.5% of total costs(2008 estimate) USO? (if available, in Euro) Basic letter post Yes Yes What is the name of calculation LRIC The Profitability Costs (referred to as commercial ap- Bulk letters* Yes Yes method? (if available) proach in the report) Direct mail* No Yes Short description of calculation - Analyse what NPO would change in its service if the Periodicals Yes Yes method (if available) USO were abolished. Then calculate how much Post Non-priority letters Yes Yes Danmark’s would save by implementing such changes. Basic parcel post Yes Yes Is a thorough documentation of No The method is explained in detail in Appendix A of re- Bulk parcels* Yes Yes calculation method available? port Copenhagen Economics (2008) Where? Note: ”Direct mail”, ”bulk mail” and “bulk parcel Is calculation method approved Yes No Source: USP by the NRA?

Does NRA calculate USO cost?* See annual report - Indicator 6.2.5 Mechanisms to ensure provision of universal service Note: - means no answers in questionnaire *In general, the cost of the universal service Question Answers” are not defined in the Danish Legislation. Describe the role played by the three mechanisms: The relevant mechanism is designation of a universal service market forces, designation and public procure- provider (Post Danmark) ** Copenhagendoes not Economics calculate the estimated cost of onthe behalfUSO. of Danish Chamber of Commerce (Dansk Erh- ment. Are other safeguarding measures present? Source: Ministry, NRA verv) the net costs of the Danish USO. The Danish NPO has disputed the validity of the this cost

estimate. obligation is not calculated. Consequently, the NRA Source: USP Indicator 6.2.6 Legal mechanisms to ensure quality of universal service Mechanism Yes/No Mechanism Yes/No NRA sets monitoring standards? Yes NRA can fine USP(s)? No Annual measurement of quality of service? Yes NRA can impose other remedies? No Annual publication of results on quality of service Yes monitoring? Source: NRA

DENMARK

Indicator 6.2.9 Authorisation/licensing for services within and outside universal Indicator 6.2.11 Involvement in competition cases since 2007 service area Case name Case status Postal product(s) con- Issue cerned Services within universal services If yes, state services e.g. letter post Bring Citymail (Nor- Ongoing at EU Letter mail Predatory prices and use of dominant po- items, otherwise insert “No” way Post) court. sition What licensing procedure is used? General authorisation (registration with Sag nr. 2009- Closed case Direct mail Rebates (exclusionary loyalty) the NRA) 0019768 Which universal services are subject to individual license? None 4/0120-0100- Closed case Direct mail Rebates (loyalty) Which universal services are subject to general authorisation? None 0048/ISA/TWA Are authorisation requirements published (transparent)? Yes- 3/1120-0100- Closed Case Unaddressed mail Rebates 0974/ISA/chj/lbr Is the USP authorised under Art. 9*? - Source: USP, Danish Competition Council (2010), Ke Services outside universal services Answer For which services is general authorisation required? Commercial provision of postal services maj 2010 i sag nr. 2009-0019768; Danish Competition Council, 30.08.2007, Journal no 4/0120- For which services is an individual license required (ex ante approval)? Express services 0100-0048/ISA/TWA, Danish Competition Council, 29.09.2004, Journal no. 3/1120-0100- Note: - means no answers in questionnaire 0974/ISA/chj/lbr Source: NRA ndelse afsagt af Konkurrenceankenævnet den 10.

Indicator 6.2.10 Access to postal infrastructure ensured by Member States 6.3. REGULATION OF PRICES AND ACCOUNTING Access to: Yes/No Other conditions: Yes/No Post codes No Change of address database No Indicator 6.3.1 Method of price regulation Address database Yes USP return services No Segment Method Remark Post office boxes No Street letter boxes No Basic letter post Ex-post based on development in the Applies only to the reserved area consumer price index Delivery boxes Yes Sorting centres No Bulk letters Other conditions: Yes/No Direct mail Require downstream access to USP No Periodicals Source: NRA Non-priority letter post Basic parcel post Bulk parcels Source: NRA

DENMARK

Indicator 6.3.2 Accounting requirements 6.4. ROLE OF NRA Question Answer Question Answer Separation of accounts No. of up/down stream accounts 0 Indicator 6.4.1 NRA powers Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - Task or power Yes/No Task or power Yes/No No. of reserved product accounts 0 Transparency Require USP cost allocation system? No Levy fines? No Unreserved product accounts required? Nos Independent body reviews USP accounts? Yes Approve USP cost allocation system? No Fines since 1.1.2006 regarding data requirements? No No. of unreserved product accounts 0 Last review of USP accounts 2009 Review cost allocation to non-USO? No Seek court order? No Body reviewing USP accounts (Type of Firm em- Require data from USP (Art. 22*)? Yes Cancel unlawful rates? No Application of tariff principles body, e.g. NRA, USP) ployed by USP Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Require data studies? No Court orders sought since 1.1.2006 regarding data? No To bulk services within USO? Yes NRA issues statement of compliance? No Require downstream access? No Does USP conclude individual agreements? - Last publish statement of compliance 2006 Individual agreement: cost-based price required? Yes Publish cost allocation system? No Note: *) Under Article 22 of Directive 2008/6/EC, Individual agreement: NRA has cost data? No USP financial accts audited? No Source: NRA USP has special tariffs? Yes Last published financial accounts 2009 To up- and downstream accounts? No Indicator 6.4.2 NRA human and financial resources Note: - means no answer in questionnaire Question Answer

Source: NRA Size of budget? (€ thousands) 227

Number of total staff ? 4 ½ Indicator 6.3.3 Cost accounting system of the USP (Of which, staff dealing with postal affairs) Question Answer Source of NRA budget General budget of the State or government What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) LRIC Who approves NRA budget Parliament Is the cost accounting system approved by the National Regulatory Authority? Yes Source: NRA Assessment of the system (pros and cons) - Indicator 6.4.3 NRA independence Note: - means no answer in questionnaire Question Yes/No Question Answer Can government guide NRA on policy? Yes Who, and under what conditions, can ap- Ministry of Source:LRIC USP = long run incremental costs point NRA head? Transport Some NRA decisions require governmen- No Who, and under what conditions, can Ministry of tal support? dismiss NRA head? Transport Indicator 6.3.4 Promoting access to and affordability of postal services Can government suspend NRA orders? Yes Minimum qualifications for NRA heads No Question Yes/No If yes, how? Source: NRA Non-discriminatory prices Yes According to the Executive Order on Concession granted to Post Dan- (Art. 12*) required? mark, USO prices shall be non-discriminatory, affordable, transparent and geared to costs (paragraph.8) Indicator 6.4.4 Complaint handling – appeal from NRA decisions Affordability (Art. 12*) de- No See answer above. Affordability is required but not defined. fined in national law? Question Answer Question Answer Source: Ministry, NRA Right of appeal from NRA ensured? No Can appellate body reverse NRA? N/A To whom is NRA decision appealed? N/A Number of NRA decisions reversed? N/A Source: NRA

DENMARK

Indicator 6.4.5 Enforcement of competition rules by NRA and cooperation with 6.5. MARKET STRUCTURE AND COMPETITION NCA

Question Yes/No Question Yes/No Indicator 6.5.1 Information about the incumbent Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No Question Answer Question Answer Note: -‘NCA’ national competition authority. Source: NRA Name of incumbent Post Danmark A/S Main activities Letter mail Legal status Public limited liability company Employment - Indicator 6.4.6 Regulation of user protection procedures and remedies State ownership (percent) 100% - 40% owned by the Danish Source of financing - government Question Answer Question Answer (Post Danmark A/S is owned by Pos- User protection procedures in postal or con- Both USP(s) required to issue annual report Yes ten Norden AB. Posten Norden AB is sumer law? owned 60 % by the Swedish gov- Enforcement by NRA or national consumer NRA NRA issues annual report No ernment and 40 % by the Danish protection authority (NCPA)? government) Applies to non-USP(s) in USO area? Review of operator decision ensured No No Note: - means no answers in questionnaire Applies to non-USO services Agency reviewing operator No 0 Source: USP Remedies by competent national authority? 0 (maximum fee) Source: NRA Indicator 6.5.2 Incumbent profits, 2009, national currency Statistic Value Indicator 6.4.7 Main issues of discussion between NRA and USP Total profit in 2009 1640 mDKK (for Post Denmark only, not the entire postal group, Posten Norden AB) Issue Percentage of profit coming from letter mail - • No Issues given by either USP or NRA Percentage of profit coming from reserved area (if present) +/- 11% Source: NRA Note: - means no answers in questionnaire Source: USP Indicator 6.4.8 NRA relations with customer associations Example of relation Short description (in bullet points) Distribution of “free” newspapers Costumers Council (semi-private organisation) Source: NRA

DENMARK

Indicator 6.5.3 Mail market segmentation Indicator 6.5.6 New entrants since 2008 Percentage opened to Subject to li- Segment No. of Approximate mar- End-to-end or Name No. of sig- competition cense / au- Names of significant entrants ket share up/downstream competition? Segment nificant Under na- thorisation? competitors Actual competitors Letter mail, unad- 1 N/A Downstream Citymail* tional law (Yes/No) dressed items Addressed items Note: Citymail DK opted to leave after two years in Letters Correspondence Reserved be- Yes (up to 1 2g) None Source:Post NRA – Norway Post still operates Bring Denmark, an express firm. low 50 g Direct mail 0% Yes (up to 2 kg) Indicator 6.5.7 Cross border mail the market. Citymail DK is a subsidiary of Norway Publications Yes (up to 2 Main actors (if not re- Terminal dues regu- kg) Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Unaddressed items No (not considered a - Only inbound mail No postal service) Note: - means no answers in questionnaire Cross-border out- 1 (potentially) Bring City Mail Source: NRA bound Express Yes Parcels Yes (up to 20 Indicator 6.5.8 Presence and role of mail consolidators in the market kg) Question Answer Total Are companies offering mail consolidation services present in the market? N/A Source: NRA How large is the turnover of mail consolidators in relation to the postal market? N/A Have you handled any competition cases involving mail consolidator? No Indicator 6.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Source: NRA Segment Approximate sum of market shares of 3 main competitors

Letter post (open area) N/A Parcels N/A Express N/A Unaddressed items N/A Source: NRA

Indicator 6.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the Main objectives behind the ac- Date company acquired company quisition 30/1/ 2009 Posten A/B (Swedish Various postal services - NPO) Note: - means no information Source: USP

DENMARK

6.6. STRUCTURE OF MARKET DEMAND Indicator 6.6.4 Trends in mail substitution Short description (in bullet points)

• Post Danmark expects an annual average decline of the postal market of 2% due to substitution effects – Indicator 6.6.1 Revenues and volumes generated by consumers vs. business cus- though increasing declines following the ongoing financial crisis. • “The expectations about the further developments on total volume and the impact of electronic substitution tomers in 2009, national currency, millions of items are uncertain, although everyone expects a decline in mail volumes” ITA/WIK (2009b) Segment Business customers and private consumers Approximate market Source: USP, ITA/WIk Revenue Volume share in the total market Indicator 6.6.5: Addressed items (domestic) - 1,037 - Letters - - - 6.7. PRICE PERFORMANCE: Correspondence - - - Reserved area - - - Direct mail - - - Indicator 6.7.1 Public tariffs, 2004-2009 Publications - - - Segment 2005 2007 2009 Unaddressed items - 1,718 - Single item: 20g tariff letter 4,50 4,75 5,50 Cross-border mail outbound - 59 - Single item: 100g priority mail 7,50 8,25 10,50 Express - -- Single item: 500g insured and registered 72,00 76,50 97,00 Parcels - 39- Single item: 1 kg parcel 30,00 30,00 36,00 Total 11,240 mDKK 2,853 m - Bulk mail: composed of 20g letters 3,88 4,09 3,70 Note: - means no answers in questionnaire Bulk mail: composed of 100g letters 6,47 7,11 5,90 Source: USP Source: USP Indicator 6.6.2: Indicator 6.6.3 Revenues and volumes generated by consumers vs. business customers in 2008, national currency, millions of items 6.8. SOCIAL AND CONSUMERS ASPECTS Segment Business customers and private consumers

Revenue Volume Addressed items (domestic) - Indicator 6.8.1 Employment indicators, 2009 Letters - USP Correspondence - Employment (thousand), in full time equivalents 18,049 Reserved area - Percentage of total country employment Direct mail - Share of civil servants <1% Publications - Share of part time and temporary employment - Unaddressed items - Share of outsourced and subcontracted employment - Cross-border mail outbound - Note: - means no answers in questionnaire Express - Source: USP Parcels - Total 11,911 mDKK 3,021 m Note: - means no answers in questionnaire Source: USP

DENMARK

Indicator 6.8.2 Wage and productivity indicators Indicator 6.9.3 Supply of e-commerce services, total market Incumbent Question Answer - Incumbent Wages as a proportion of total costs 53% Do you supply own e-commerce services? What kind? Electronic document handling (E-boks), invoicing. Average wage per hour (€) - Services generated by Information Logistics section Note: - means no answers in questionnaire of Posten Norden Source: Post Denmark, Annual report 2009 What share of turnover do you generate from own e- - commerce services? What is the trend? 6.9. TECHNOLOGICAL DEVELOPMENTS What own e-commerce services do you plan to develop? - Are you able to indicate how the percentage of your turnover No information that originates from or is related to third-party e-commerce Indicator 6.9.1 Innovation, technology and new services transactions (e.g. purchases on the internet) Service Do you of- Volume (million of Do you plan to offer? Note: - means no answers in questionnaire fer? items) Source: USP Hybrid mail Yes - - Virtual delivery of mail Yes - - Indicator 6.9.4 Supply of hybrid mail services, total market Pick up locations for parcels (parcel shops) Yes Not applicable - Question Answer - Incumbent Note: - means no answers in questionnaire Do you supply hybrid mail or virtual delivery solutions? What kind? Yes Source: USP If yes, how many years have you been supplying these services for? Hybrid mail has been supplied by In- formation Logistics since 2009 Indicator 6.9.2 Statistics on technological progress What share of turnover do you generate from hybrid mail and/or virtual de- Increasing proportion livery solutions? What is the trend? Indicator Value in 2009 Increase/decline since 2007 (percentage) (in percentage points) Do you plan to develop (new) hybrid mail / virtual delivery solutions? - Note: - means no answers in questionnaire Percentage of letter mail benefiting from auto- 90% +15%-points mated processing (e.g. sorting) Source: USP Percentage of parcels benefiting from automated 100% Unchanged at 100% processing (e.g. sorting) Source: USP Indicator 6.9.5 Developments within networks and mail consolidation services Question Answer

Have you carried out a major reorganisation of your logistics network? Yes For example, decentralising, implementing hub & spoke systems? Do you use different networks for letters and parcels at collection, Yes sorting, transportation or delivery levels? What are the reasons? What is the relative importance of road, rail and air as modes of Road transport dominates. No recent transportation for mail? Have these shares changed recently? Why? change Source: USP

DENMARK

Indicator 6.9.6 Please describe briefly the most important environmental initiatives implemented at your firm Brief answer (in bullet points) • Particle filters used by transportation fleet • Optimization efforts of transportation • All employees informed by the company of ways to reduce CO2 emission privately • Reduced CO2 emissions from letter production Source: USP

6.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 6.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 93 95.7 95 95- - - - - Note: - means no answers in questionnaire Source: NRA

Indicator 6.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 96.0 - - Note: - means no information Source: Ecorys (2008a)

Indicator 6.10.3 Quality of service indicators Indicator Value Percentage of lost mail N/A Number of postal outlets (post offices and agencies) and number of letter boxes per 1,5 / 18,2 10.000 inhabitants. The implementation of CEN standards. Yes Source: NRA

ESTONIA

outside the universal service area. USO products by the Estonian NPO are VAT exempt.

7.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 7.1.1 Country facts Country facts Value Unit Year Population 1.3 Million 2010 Population growth -2.3 Percent 2000-2010 Population density 30 Pop. / km2 2010 Urbanisation rate 69.4 Percent 2008 GDP 19.8 PPS, billion 2009 GDP/capita 14,800 PPS 2009

Postal services to GDP ’99/09: 0.54%/0.41% Ratio 1998/2008 NRA Estonian Competition Authority (Konkurentsiamet) NRA responsibilities? Supervision over the requirements provided in the Postal Act, settlement of complaints of users. Incumbent Eesti Post Chapter 7 ESTONIA Main activities of incumbent Postal Services Employment, incumbent Source of financing Source: ITA/WIK (2009) Country fiche, Eurostat, NRA Box 7.1 – Country summary Although segments for which data is available recorded declines in volumes, the overall market grew by 66 percent between 2007-2009, apparently driven by an expansion in unaddressed items.The volume of correspondence fell 15 percent, direct mail dropped 14 percent, express 25 percent and parcels 17 perecent. Estonia has transposed Directive 2008/6/EC. All market segments of the postal sector are fully opened. The market share of the Estonian NPO is very high in correspondence, direct mail, cross-border outbound and parcels. In publications the NPO has a big market share, while in express they have a small market share. USO was changed in 2009; periodicals and bulk mail now excluded from USO. USO fund is set up to compensate for net cost of USO. The fund is financed by contributions of the NPO and competitors. It is activated. Estonia has not had any competition cases after 2007 in postal services. One legal barrier is the license required for postal operators within the universal service area (not for direct mail and publications). Conditions of the license include specific requirements regarding the coverage of a licensee geographically. Individual licenses are also required for the provision of basic letter post and basic parcel post

ESTONIA

Indicator 7.1.2 Volume of items delivered by segment in total market, millions of 7.2. REGULATORY FRAMEWORK AND PRACTICES items Segment 2005 2007 2009 Indicator 7.2.1 National regulatory framework Addressed items Question Yes/No Name of law Year of enact- Remarks Letter ment Correspondence 47.2 50,8 43,2 Is postal law Yes Postal Act 2009 Direct mail 18.1 21,5 18,5 enacted? Publications NA NA 67,6 Is Directive Yes Postal Act. And Require- 2009 Unaddressed items NA NA NA 2008/6 trans- ments to the accounting of posed? universal servie provider Cross-border outbound 3.7 3.4 2.4 Express 3.6 2.7 2.0 Is there a law that defines… Parcels NA 1.2 1.0 Scope of USO? Yes Postal Act 2009 Total 72.6 79.6 132.7 Quality of USO? Yes Postal Act 2009 Note: - means no answers in questionnaire USO rates? Yes Decree of affordable prices 2009 USP accounts? Yes 2009 Source: NRA Reserved area? No

Authorisation Yes Postal Act 2009 Indicator 7.1.3 Revenues from segments in total market, millions of Euro procedures? Segment 2005 2007 2009 Universal ser- Yes Postal Act 2009 vice fund? Mail 2.9 2.8 2.7 User protec- Yes Consumer Protection Act 2008 and 2010 Express 15.4 25.9 23.8 tion? Logistics NA NA NA Other special NRA: - Postal Act 2006 A universal postal service pro- Financial NA NA NA rights (which)? Ministry: Yes vider has the exclusive right to put postage stamps on the Others NA NA 8.5 market and revoke them. Total 2.9 2.8 2.7 The Ministry and the NRA have answered differently on some questions Note: - means no answers in questionnaire Source: NRA, Ministry Source: NRA

Indicator 7.2.2 Regulation of services based on new technologies Question Answer Are you aware of the presence of services based on new technologies in your market? For ex- Yes ample, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No Source: NRA

Indicator 7.2.3 VAT treatment of postal services Postal product Part of USO? VAT rate Legal basis USO Whole USO 0% VAT Act Non USO no 20% VAT Act Source: NRA

ESTONIA

Indicator 7.2.4 Services ensured as universal services under national law Indicator 7.2.8 Cost of universal service obligation and method for its calculation Segment Defined as universal service by law? Are quality standards specified by law? Question Answer Basic letter post Yes Yes What is the cost estimate of USO? (if available, in Euro) NA Bulk letters No No What is the name of calculation method? (if available) It is based on WACC. Direct mail No No Short description of calculation method (if available) The difference between costs and affordable prices. Periodicals No No Is a thorough documentation of calculation method available? On the website of the NRA (only in Estonian) Non-priority letter s Yes No Where? Basic parcel post Yes No Is calculation method approved by the NRA? Method is developed by the NRA Bulk parcels No No Does NRA calculate USO cost? Yes Source: NRA Source: NRA

Indicator 7.2.5 Mechanisms to ensure provision of universal service Indicator 7.2.9 Authorisation/licensing for services within and outside universal Question Answer service area Describe the role played by the By Postal Act a universal postal service provider shall be designated as a result of Services within universal services If yes, state services e.g. letter post three mechanisms: market a public competition organised by the Estonian Competition Authority. If a public forces, designation and public competition fails, the Estonian Competition Authority shall impose the obligation items, otherwise insert “No” procurement. Are other safe- to provide universal postal services for up to five years on a postal service provider What licensing procedure is used? General authorisation, individual license guarding measures present? who, at the time of the competition specified in subsection (1) of this section, Which universal services are subject to individual license? Basic letter post, Basic parcel post held a licence for the provision of universal postal services. Which universal services are subject to general authorisation? None Source: Ministry, NRA Are authorisation requirements published (transparent)? Yes

Is the USP authorised under Art. 9*? Yes Indicator 7.2.6 Legal mechanisms to ensure quality of universal service Services outside universal services Answer Mechanism Yes/No Mechanism Yes/No For which services is general authorisation required? Periodicals, direct mail, express mail NRA sets monitoring standards? No NRA can fine USP(s)? Yes For which services is an individual license required (ex ante ap- Basic letter post and basic parcel post Annual measurement of quality of service? Yes NRA can impose other remedies? Yes proval)? Annual publication of results on quality of service Yes Note: *) Article 9 of Directive2008/6/EC monitoring? Source: NRA Source: NRA

Indicator 7.2.7 Financing the net cost of universal service Indicator 7.2.10 Access to postal infrastructure ensured by Member States Access to: Yes/No Other conditions: Yes/No Mechanism Yes/No Mechanism Yes/No Post codes Yes Change of address database Yes Reserved area No Who contributes to the compensation fund? Incumbent, Address database Yes USP return services Yes (Incumbent, competitors, other entities) competitors Post office boxes Yes Street letter boxes No Compensation fund Yes Public procurement Yes Delivery boxes Yes Sorting centres No Size of compensation fund NA Direct compensation from public funds No (if present, in Euro) Other conditions: Yes/No Source: NRA Require downstream access to USP Yes Source: NRA

ESTONIA

Indicator 7.2.11 Involvement in competition cases since 2007 Indicator 7.3.3 Cost accounting system of the USP Case name Case status (ongo- Postal product(s) Issue Question Answer ing/closed) concerned What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) Activity based cost accounting No cases Source: European Commission, DG COMP Is the cost accounting system approved by the National Regulatory Authority? - Assessment of the system (pros and cons) - 7.3. REGULATION OF PRICES AND ACCOUNTING Note: - means no answers in questionnaire

website, website of Estonian NCA Source: NRA Indicator 7.3.1 Method of price regulation Segment Method Remark Indicator 7.3.4 Promoting access to and affordability of postal services Basic letter post Price caps Question Yes/No If yes, how? Bulk letters NA Non-discriminatory prices Yes It’s required by Postal Act (Art. 12*) required? Direct mail NA Affordability (Art. 12*) de- Yes Affordability is defined in Postal Act and affordable prices for universal Periodicals NA fined in national law? services taken from users are regulated by regulation of the minister of Non-priority letter post Price caps economic affairs and communications. Basic parcel post Price caps Note: Article 12 of Directive 2008/6/EC Bulk parcels NA Source: Ministry, NRA Source: NRA 7.4. ROLE OF NRA Indicator 7.3.2 Accounting requirements Question Answer Question Answer Indicator 7.4.1 NRA powers Separation of accounts No. of up/down stream accounts 0 Task or power Yes/No Task or power Yes/No Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - Require USP cost allocation system? Yes Levy fines? Yes No. of reserved product accounts 0 Transparency Approve USP cost allocation system? No Fines since 1.1.2006 regarding data requirements? Yes Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Review cost allocation to non-USO? Yes Seek court order? No No. of unreserved product accounts NA Last review of USP accounts 2007 Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes Application of tariff principles Body reviewing USP accounts (Type of body) Auditor Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Bulk services within USO? No NRA issues statement of compliance? Yes Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Does USP conclude individual agreements? Yes Last publish statement of compliance 2007 Require downstream access? No Individual agreement: cost based price required Yes Publish cost allocation system? No Note: - means no information Individual agreement: NRA has cost data? No USP financial accounts audited? Yes *) Article 22 of Directive 2008/6/EC USP has special tariffs? Yes Last published financial accounts - Source: NRA Up- and downstream accounts? No Note: - means no answers in questionnaire Source: NRA

ESTONIA

Indicator 7.4.2 NRA human and financial resources Indicator 7.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 1700 (year 2009) User protection procedures in postal or con- Both USP(s) required to issue annual report Yes sumer law? Number of total staff ? 50 (Of which, staff dealing with postal affairs) 2 Enforcement by NRA or national consumer Both NRA issues annual report No protection authority (NCPA)? Source of NRA budget General budget of the State or government Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Who approves NRA budget Ministry responsible for postal services Applies to non-USO services Yes Agency reviewing operator NRA Source: NRA Remedies by competent national authority? - (maximum fee) Indicator 7.4.3 NRA independence Note: - means no answers in questionnaire Question Yes/No Question Answer Source: NRA Can government guide NRA on policy? No Who, and under what conditions, can ap- Minister point NRA head? Indicator 7.4.7 Main issues of discussion between NRA and USP Some NRA decisions require governmen- No Who, and under what conditions, can Minister tal support? dismiss NRA head? Issue (Short description in bullet points) Can government suspend NRA orders? No Minimum qualifications for NRA heads Yes • Postal network Source: NRA Source: NRA

Indicator 7.4.8 NRA relations with customer associations

Indicator 7.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer 7.5. MARKET STRUCTURE AND COMPETITION Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes To whom is NRA decision appealed? Court Number of NRA decisions reversed? 1 Indicator 7.5.1 Information about the incumbent Source: NRA Question Answer Question Answer

Name of incumbent Eesti Post Main activities Postal services Indicator 7.4.5 Enforcement of competition rules by NRA and cooperation with Legal status Public limited company Employment NCA State ownership (percent) 100% Source of financing Question Yes/No Question Yes/No Source: USP Who is the primary enforcer of competition rules? Both NRA NRA obliged to share info with NCA? Yes and NCA Note: ‘NCA’ national competition authority. Indicator 7.5.2 Incumbent profits, 2009, national currency Source: NRA Statistic Value Total profit in 2009 6.4 mil Percentage of profit coming from letter mail - Percentage of profit coming from reserved area (if present) - Note: - means no information Source: USP

ESTONIA

Indicator 7.5.3 Mail market segmentation Indicator 7.5.7 Cross border mail Percentage opened to Reserved for Main actors (if not re- Terminal dues regu- competition Subject to li- No. of sig- Names of sig- Volume (outbound) USP? served to incumbent) lated per Art. 13? Under na- cense / authori- nificant nificant com- Actual 2.4 million items per year No Yes Segment tional law sation? competitors petitors Source: NRA Addressed items 100% Letters 100% Correspondence 100% Low Yes 2 Indicator 7.5.8 Presence and role of mail consolidators in the market Direct mail 100% Low Yes 4 Question Answer Publications 100% Substantial Yes 2 Are companies offering mail consolidation services present in the market? No Unaddressed items 100% NA No NA How large is the turnover of mail consolidators in relation to the postal market? NA Cross-border outbound 100% Low Yes 1 Have you handled any competition cases involving mail consolidator? No Express 100% Intense Yes 20 Source: NRA Parcels 100% Low Yes 1 Total Source: NRA 7.6. STRUCTURE OF MARKET DEMAND

Indicator 7.5.4 Sum of market shares of 3 main competitors (excl. incumbent) No answers were provided Segment Approximate sum of market shares of 3 main competitors

Letter post (open area) Below 5% Parcels 0% 7.7. PRICE PERFORMANCE: Express 40-50% Unaddressed items NA Indicator 7.7.1 Public tariffs, 2004-2009 (EUR) Source: NRA Segment 2005 2007 2009 Single item: 20g tariff letter 0,3 0,3 0,4 Indicator 7.5.5: Mergers and acquisitions of incumbent since 2007 Indicator 7.5.6 New entrants since 2008 Single item: 100g priority mail Single item: 500g insured and registered Segment No. of Approximate End-to-end or up/downstream Name entrants market share competition? Single item: 1 kg parcel 3,1 Bulk mail: composed of 20g letters Mail 1 Low End to end Express Post Ltd. Bulk mail: composed of 100g letters Express 5 Low End to end Source: USP Logistics NA Financial NA Others Source: NRA

ESTONIA

7.8. SOCIAL AND CONSUMERS ASPECTS Indicator 7.10.3 Quality of service indicators Indicator Value Indicator 7.8.1 Employment indicators, 2009 Percentage of lost mail NA USP Number of postal outlets (post offices and agencies) and number of letter 2.5 outlets, 22 letter boxes Employment (thousand), in full time equivalents 4 boxes per 10,000 inhabitants. Percentage of total country employment The implementation of CEN standards. No Share of civil servants Source: NRA Share of part time and temporary employment Share of outsourced and subcontracted employment Note: - means no information Source: Eesti Post, Annual report 2009

Indicator 7.8.2: Wage and productivity indicators

7.9. TECHNOLOGICAL DEVELOPMENTS

No answers were provided

7.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 7.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 90 93.8 ------Note: - means no answers in questionnaire Source: NRA

Indicator 7.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 90 90.8 - - Note: - means no information Source: Ecorys (2008a)

FINLAND

8.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 8.1.1 Country facts Country facts Value Unit Year Population 5.4 Million 2010 Population growth 3.5 Percent 2000-2010 Population density 16 Pop. / km2 2010 Urbanisation rate 63.3 Percent 2008 GDP 139.3 PPS, billion 2009 GDP/capita 26,100 PPS 2009 Postal services to GDP ’99/09: 0.86%/1.03% Ratio 1998/2008

NRA Finnish Communications Regulatory Authority (FICORA) NRA responsibilities? US rates, Special Tariffs, USP accounts, Quality of US, User com-plaints Incumbent Itella Corporation (parent company) Main activities of incumbent postal, logistics and information logistics Employment, incumbent 20.800 employees (average in 2009) Source of financing Business income Chapter 8 FINLAND Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP Box 8.1 – Country summary The total volume of the Finnish postal sector experienced a modest increase from 2007 to Indicator 8.1.2 Volume of items delivered by segment in total market, millions of 2008, from 3.9 to 4.0 billion items. While letter post and publications volumes remained items steady, the market for unaddressed items grew by 4.5 percent, while cross-border outbound by 7.5 percent Segment 2005 2007 2008* Finland is obliged to transpose the directive 2008/6/EC before the 1.1.2011 deadline. As of July Addressed items 2144 2094 2105 2010 the directive was not yet transposed, although the NRA expected transposition in the Letters 1129 1 0781088 second half of 2010.Currently the draft law is being discussed in the Finnish Parliament. Correspondence N/A NA NA All postal market segments are legally fully open. Direct mail N/A NA NA The market share of the NPO Itella Corporation in the unadressed mail segment was 40% in Publications 1015 1016 1017 2008. In domestic letters there was no competition, while cross border outbound mail experienced some competition. Unaddressed items 1577 1746 1825 Since 2007 there has been one legal case related to the postal sector about pricing in the un- Cross-border outbound 47 40 43 addressed mail segment. Express N/A N/A N/A Legal entry barriers include the need for a license to provide services within the universal Parcels 31 36 36 postal service area. The license includes a universal service obligation. Additionally, an opera- Total 3800 3916 4009 tor holding such a license must pay a tax equal to as much as 20 percent of turnover if the population density of the area served is above 250 inhabitants per square kilometre. Secondly Source: NRA there is a special law for the island group Aaland (autonomous region of Finland). The NPO is adapting to changed market conditions by, among other things, a proactive development of e-based services. To date, the NRA does not consider implementing new regulation regarding e-based services, such as hybrid mail and virtual delivery. The Finnish NPO has no VAT exemption on any products.

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Indicator 8.1.3 Revenues from segments in total market, millions of Euro Indicator 8.2.2 Regulation of services based on new technologies Segment 2005 2007 2009 Question Answer Mail 840 856 N/A Are you aware of the presence of services based on new technologies in your market? For ex- Yes Express N/A N/A N/A ample, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No Logistics 300 352 400 Financial N/A N/A N/A Source: NRA Others 35 38 N/A Total 1175 1246 N/A Indicator 8.2.3 VAT treatment of postal services Source: NRA Postal product Part of USO? VAT rate Legal basis All postal products USO and other postal products 22 % Value Added Tax Act (1501/1993) 8.2. REGULATORY FRAMEWORK AND PRACTICES Source: NRA, Ministry

Indicator 8.2.1 National regulatory framework Indicator 8.2.4 Services ensured as universal services under national law Question Yes/No Name of law Year of Remarks Segment Defined as universal service by law? Are quality standards specified by law? enactment (Yes/Not confirmed/No) (Yes/No/Other than Art. 16) Is postal law en- Yes Postal Services Act (313/2001) 2002 Basic letter post Yes Yes acted? Bulk letters Yes No Is Directive 2008/6 No 2010 –sec- Direct mail Yes No transposed? ond half Periodicals Yes No Is there a law that defines… Non-priority letter s Yes No Scope of USO? Yes Postal Services Act - Basic parcel post Yes No Quality of USO? Yes Postal Services Act - Bulk parcels No No USO rates? Yes Postal Services Act - Note: Itella disagrees with the above regarding non- USP accounts? NRA: No Postal Services Act - Ministry: Yes Source: NRA, USP Reserved area? No Postal Services Act - Authorisation proce- Yes Postal Services Act - dures? Indicator 8.2.5 Mechanisms to ensure provision of universal service Question Answer Universal service NRA: No NRA: Postal Services Act Ministry: Ministry: No fees have priority letters, which should be outside of USO. fund? Ministry: Yes Ministry: Act on the Fee Col- 1997 been collected so far; the Describe the role played by the three mechanisms: market forces, designa- Designation of USP in the licence lected for Securing the Provision fees would be collected tion and public procurement. Are other safeguarding measures present? granted by the Government of Postal Services on Sparsely and allocated through Populated Areas (708/1997) the state budget Source: NRA, Ministry User protection? Yes NRA: Postal Services Act - Ministry: Postal Services Act; general consumer protection Indicator 8.2.6 Legal mechanisms to ensure quality of universal service measures are enacted in Con- Mechanism Yes/No Mechanism Yes/No sumer Protection Act (38/1978) NRA sets monitoring standards? No NRA can fine USP(s)? Yes Note: - means no answers in questionnaire Annual measurement of quality of service? Yes NRA can impose other remedies? Yes The Ministry and the NRA have answered differently on some questions Annual publication of results on quality of service Yes Source: NRA, Ministry monitoring? Source: NRA

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Indicator 8.2.7 Financing the net cost of universal service Indicator 8.2.10 Access to postal infrastructure ensured by Member States Mechanism Yes/No Mechanism Yes/No Access to: Yes/No Other conditions: Yes/No Reserved area No Who contributes to the compensation fund? N/A Post codes No Change of address database No (Incumbent, competitors, other entities) Address database No USP return services No Compensation fund No Public procurement No Post office boxes No Street letter boxes No Size of compensation fund N/A Direct compensation from public funds No Delivery boxes No Sorting centres No (if present, in Euro) Other conditions: Yes/No Note: Direct compensation from public fu Require downstream access to USP No Source: NRA Source: NRA

Indicator 8.2.8 Cost of universal service obligation and method for its calculation nds includes subsidies and state aid. Indicator 8.2.11 Involvement in competition cases since 2007 Question Answer Case What is the cost estimate of USO? (if available, in Euro) N/A Case name status Postal product(s) concerned Issue Source: NRA, USP Suomen Suoramai- Ongoing Unadressed items, (which are not Predation, rebates, access, bundling, nonta Oy (case at postal products according to Fin- cross-substitution Competition Authority) nish Postal Services Act) Indicator 8.2.9 Authorisation/licensing for services within and outside universal Source: USP service area Services within universal services If yes, state services e.g. letter post items, otherwise insert “No” 8.3. REGULATION OF PRICES AND ACCOUNTING What licensing procedure is used? Council of State designate the license for postal operations Indicator 8.3.1 Method of price regulation Which universal services are subject to individual license? No individual licences Segment Method Remark Which universal services are subject to general authorisation? All services Basic letter post Ex Post All items in this service category Are authorisation requirements published (transparent)? Yes Bulk letters Ex Post All items in this service category Is the USP authorised under Art. 9*? Yes Direct mail Services outside universal services Answer Periodicals No For which services is general authorisation required? Non-priority letter post Ex Post All items in this service category For which services is an individual license required (ex ante approval)? No Basic parcel post Ex Post All items in this service category Source: NRA Bulk parcels Source: NRA

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Indicator 8.3.2 Accounting requirements 8.4. ROLE OF NRA Question Answer Question Answer Separation of accounts No. of up/down stream accounts N/A Indicator 8.4.1 NRA powers Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA No Task or power Yes/No Task or power Yes/No No. of reserved product accounts N/A Transparency Require USP cost allocation system? Yes Levy fines? No Unreserved product accounts required? Yes Independent body reviews USP accounts? No Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- - No. of unreserved product accounts N/A Last review of USP accounts No ments? Application of tariff principles Body reviewing USP accounts (Type of body) No Review cost allocation to non-USO? N/A Seek court order? No Bulk services within USO? Yes NRA issues statement of compliance? No Require data from USP (Art. 22*)? Yes Cancel unlawful rates? No Does USP conclude individual agreements? Yes Last publish statement of compliance No Require data from non-USPs (Art. 22*)? No Set new rates for USP? No Individual agreement: cost based price required Yes Publish cost allocation system? No Require data studies? No Court orders sought since 1.1.2006 regarding data? - Individual agreement: NRA has cost data? No USP financial accounts audited? No Require downstream access? N/A USP has special tariffs? Yes Last published financial accounts No Note: - means no answers in questionnaire Up- and downstream accounts? N/A N/A *) Article 22 of Directive 2008/6/EC Source: NRA Source: NRA

Indicator 8.3.3 Cost accounting system of the USP Indicator 8.4.2 NRA human and financial resources Question Answer Question Answer What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Size of budget? (€ thousands) - Is the cost accounting system approved by the National Regulatory Authority? Yes Number of total staff? - Assessment of the system (pros and cons) (Of which, staff dealing with postal affairs) - Source of NRA budget Fees collected from the National USP Note: - means no answers in questionnaire Who approves NRA budget Parliament Source: NRA, USP Note: - means no answers in questionnaire Source: NRA Indicator 8.3.4 Promoting access to and affordability of postal services Question Yes/No If yes, how? Indicator 8.4.3 NRA independence Non-discriminatory Yes Postal Services Act, Section 26: The prices charged by a universal service pro- Question Yes/No Question Answer prices (Art. 12) re- vider shall be reasonable, fair and they shall allow all users to have access to quired? the services. The pricing shall be transparent and non-discriminatory. Can government guide NRA Yes Who, and under what condi- Council of State on policy? tions, can appoint NRA head? Affordability (Art. 12) Ministry: No Ministry: Affordability is not defined as such, but according to section 26 defined in national NRA: Yes prices shall be reasonable. Some NRA decisions require No Who, and under what condi- - law? governmental support? tions, can dismiss NRA head? Note: The Ministry and the NRA have answered differently on some questions Can government suspend No Minimum qualifications for Higher Academic Degree, leadership ex- NRA orders? NRA heads perience, acquaintance with all the task Source: NRA, Ministry in post Note: - means no answers in questionnaire Source: NRA

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Indicator 8.4.4 Complaint handling – appeal from NRA decisions 8.5. MARKET STRUCTURE AND COMPETITION Question Answer Question Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes To whom is NRA decision appealed? Court Number of NRA decisions reversed? N/A Indicator 8.5.1 Information about the incumbent Source: NRA Question Answer Question Answer Name of incumbent Itella Corporation Main activities postal, logistics and in- (parent company) formation logistics Indicator 8.4.5 Enforcement of competition rules by NRA and cooperation with Legal status public limited company Employment 20.800 employees (aver- NCA age in 2009) State ownership (percent) 100 % Source of financing business income Question Yes/No Question Yes/No Source: USP Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No Note: ‘NCA’ national competition authority. Source: NRA Indicator 8.5.2 Incumbent profits, 2009, national currency Statistic Value Indicator 8.4.6 Regulation of user protection procedures and remedies Total profit in 2009 59,0 million € Question Answer Question Answer Percentage of profit coming from letter mail Confidential User protection procedures in postal or con- Both USP(s) required to issue annual report Yes Percentage of profit coming from reserved area (if present) No reserved area sumer law? Source: USP Enforcement by NRA or national consumer NCPA NRA issues annual report No protection authority (NCPA)? Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Indicator 8.5.3 Mail market segmentation Applies to non-USO services Yes Agency reviewing operator Consumer Dis- Percentage opened to Subject to li- No. of sig- putes Board competition cense / au- Names of significant Segment nificant- Remedies by competent national authority? - Under na- thorisation? competitors Actual competitors (maximum fee) tional law (Yes/No) Note: - means no answers in questionnaire Addressed items 100% - - - - Source: NRA Letters 100% - - - - Correspondence 100% - Yes - - Indicator 8.4.7 Main issues of discussion between NRA and USP Direct mail 100% - No - - Publications 100% - No - - Issue Short description (in bullet points) Unaddressed items 100% - No - -

• Scope of universal services Cross-border out- 100% - No - - • Allocation principles of the minimum cost of universal services bound Source: NRA Express 100% - No - - Parcels 100% - No - - Total - - - - - Indicator 8.4.8 NRA relations with customer associations Note: - means no answers in questionnaire Example of relation Short description (in bullet points) Source: NRA, N/A Source: NRA

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Indicator 8.5.4 Sum of market shares of 3 main competitors (excl. incumbent) 8.6. STRUCTURE OF MARKET DEMAND Segment Approximate sum of market shares of 3 main competitors Letter post (open area) 100 % Indicator 8.6.1 Revenues and volumes generated by consumers vs. business cus- Parcels N/A Express N/A tomers in 2009, national currency, millions of items Unaddressed items N/A Segment Business customers Private consumers Approximate mar- Revenue Volume Revenue Volume ket share in the to- Source: NRA tal market Addressed items (domestic) - 1460 - 80 - Indicator 8.5.5 Mergers and acquisitions of incumbent since 2007 Letters - 940 - 80 - Date Name of acquired company Main activities of the acquired company Correspondence - 705 - 80 - Reserved area no reserved area no reserved area - 2007 PS Logistics AB (Sweden) Transport/logistics services Direct mail - 235 - - - 2008 BusinessPoint S.A. (Poland) Information logistics services Publications - 520 - - - 2008 DH-Tools Oy (Finland) IT-programme and application planning Unaddressed items - 900 - - - 2008 Kauko Group Oy (Finland) Transport/logistics services Cross-border mail outbound - 17 - 2 - 2008 Hansar Logistics AB (Sweden) Transport/logistics services Express - 13 - - - 2008 NLC Group (Russia) Contract logistics services Parcels - 10 - 2 - 2008 Tuottotieto Oy (Finland) Financial administration services Total - 2400 - 84 Note: All information regarding revenues Note: Itella Corporation (parent company, USP) has ac - means no answers in questionnaire 2007. Only intra-group mergers have taken place. Source: USP

Source:tial USP information. and market shares is confidential.

Indicator 8.5.6: New entrants since 2008 Indicator 8.5.7 Cross border mail quired the above listed operational companies since MainObjectives actors (if notbehind re- the acquisitionsTerminal duesare confiden- regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? 21.3 million items per year No No Source: NRA

Indicator 8.5.8 Presence and role of mail consolidators in the market Question Answer Are companies offering mail consolidation services present in the market? No How large is the turnover of mail consolidators in relation to the postal market? NA Have you handled any competition cases involving mail consolidator? NA Source: NRA

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Indicator 8.6.2 Growth rate in revenues and volumes generated by consumers 8.7. PRICE PERFORMANCE: vs. business customers between 2008-2009 Segment Business customers Private consumers Indicator 8.7.1 Public tariffs, 2004-2009 Revenue Volume Revenue Volume Segment 2005 2007 2009 Addressed items (domestic) - -90 - -2 Single item: 20g tariff letter 0,65 0,70 0,80 Letters - -70 - -2 Single item: 100g priority mail 0,90 1,00 1,10 Correspondence - -30 - -2 Single item: 500g insured and reg- 4,15 (250 g registered 4,20 (250 g registered 4,65 (250 g registered Direct mail - -40 - - istered letter) letter) letter) 9, 40 (250 g insured 9,40 (250 g insured 10,20 (250 g insured Publications - -20 - - item, insured value max item, insured value max item, insured value max Unaddressed advertising - 100 - - 500 €) 500 €) 500 €) Cross-border mail outbound - -3 - -0,2 Single item: 1 kg parcel 6,80 7,40 8,50 Express - -1- - Bulk mail: composed of 20g letters see attachment see attachment see attachment Parcels - -1- -0,3 Bulk mail: composed of 100g letters see attachment see attachment see attachment Total - 5- -2.5 Note: *) Prices include VAT 22 % Note: All information regarding revenues Source: USP

- means no answers in questionnaire Source: USP Indicator 8.6.3 8.8. SOCIAL AND CONSUMERS ASPECTS Indicator 8.6.4 Trends in mail substitutionand market shares is confidential. Short description (in bullet points) • “Correspondence has increased until 2007 although Finland has very high penetration rates for internet and Indicator 8.8.1 Employment indicators, 2009 broadband access” ITA/WIK (2009b) USP • “The share of B2B on total business letter post has substantially decreased between 2004 and 2008: From 18 to 8% (possibly driven by use of electronic alternatives and e invoicing)” ITA/WIK (2009b) Employment (thousand), in full time equivalents 17186 (average 12 months) • “The total B2B letter volume has halved between 1991 and 2009, based on increased use of electronic com- Percentage of total country employment munication alternatives” Itella Corp. Share of civil servants 0 % • “Itella Corporation has actively promoted the use of electronic solutions by large postal customers by offer- Share of part time and temporary employment 40 % * ing respective information logistics services” ITA/WIK (2009b) Share of outsourced and subcontracted employment - Source: USP, ITA/WIK (2009) Note: - means no answers in questionnaire

Source: USP Indicator 8.6.5: Indicator 8.8.2 Wage and productivity indicators Incumbent Wages as a proportion of total costs 46 % Average wage per hour (€) 13,81 € Productivity measured by output per person employed Source: USP

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8.9. TECHNOLOGICAL DEVELOPMENTS Indicator 8.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent Do you supply hybrid mail or virtual delivery Yes (subsidiary of Itella Corporation), see 1.9.1. Itella offers iPost as Indicator 8.9.1 Innovation, technology and new services solutions? What kind? hybrid mail service and digitizing services for scanning documents Volume (mil- Do you plan to and sending them to recipients in electronic format. Service Do you offer? lion of items) offer? Remarks If yes, how many years have you been sup- Hybrid mail over 20 years, virtual delivery 15 years Hybrid mail Yes Confidential N/A Service offered by subsidi- plying these services for? ary, not the postal operator What share of turnover do you generate Turnover confidential, trend is growing Virtual delivery of mail Yes Confidential N/A Service offered by subsidi- from hybrid mail and/or virtual delivery so- ary, not the postal operator lutions? What is the trend? Pick up locations for No Not applicable Yes Pilot starting April 2010 Do you plan to develop (new) hybrid mail / Yes parcels (parcel shops) virtual delivery solutions? Source: USP Source: USP

Indicator 8.9.2 Statistics on technological progress Indicator 8.9.5 Developments within networks and mail consolidation services Indicator Value in Increase/decline Question Answer 2009 since 2007 Have you carried out a major reorganisation Yes, Itella is at the moment centralizing letter sorting network of your logistics network? For example, de- from seven to four centers. Percentage of letter mail benefiting from automated processing (e.g. sorting) 74 % + 5,7 % centralising, implementing hub & spoke sys- Percentage of parcels benefiting from automated processing (e.g. sorting) 78 % + 2,6 % tems? Source: USP Do you use different networks for letters and Itella uses mainly the same network for letters and parcels. parcels at collection, sorting, transportation or delivery levels? What are the reasons? Indicator 8.9.3 Supply of e-commerce services, total market What is the relative importance of road, rail Itella uses mainly road transport. Rail transport is not used at all and air as modes of transportation for mail? and air transport is used only for overnight letter mail between the Question Answer - Incumbent Have these shares changed recently? Why? most northern and southern centres. The share of air transport is Do you supply own e-commerce services? What kind? Web shop to sell limited set of goods and services decreasing slowly due to decrease in overnight letter mail volumes. (such as stamps and postcards). E-commerce mer- Source: USP chants use Itella’s B2C transportation and warehousing services. To some extent they use also mail services and services for customer experience management and direct marketing. Indicator 8.9.6 Please describe briefly the most important environmental initia- What share of turnover do you generate from own e- Confidential tives implemented at your firm commerce services? What is the trend? Brief answer (in bullet points) What own e-commerce services do you plan to develop? Itella is actively developing its existing services to • Emissions from controlled fleet: route optimization, training of drivers, CO2 criteria for procurement of vehi- meet requirements of ecommerce merchants. cles, acquiring electronic scooters and cars for delivery and GNC vehicles for transportation. Are you able to indicate how the percentage of your turn- Confidential • Emissions from owned and controlled buildings energy use: Energy audits to buildings, automatic lighting, over that originates from or is related to third-party e- adjusting temperature settings (-1C in winter; +1C during cooling time); results in 5 % less energy consump- commerce transactions (e.g. purchases on the internet) tion. Source: USP • Emissions from subcontracted fleet: Favouring subcontractors with environmentally friendly fleet and ones who have signed national energy efficiency agreement. • Emissions from business travel and commuting: CO2 limits for company cars, building video conferencing facilities and offering video conferencing applications to reduce business travel. • Offering business customers and consumers carbon neutral services for sending letters, direct mail and parcels. Source: USP

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8.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 8.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 85 94 98 99 - - - - Note: - means no answer in questionnaire Source: NRA

Indicator 8.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 (Varies) - - Note: - means no information Source: Ecorys (2008a)

Indicator 8.10.3 Quality of service indicators Indicator Value Percentage of lost mail 0,001% Number of postal outlets (post offices and agencies) and number of letter 2.1 postal outlets per 10 000 inh. boxes per 10.000 inhabitants. The implementation of CEN standards. No Source: NRA

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9.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 9.1.1 Country facts Country facts Value Unit Year Population 64.7 Million 2010 Population growth 6.9 Percent 2000-2010 Population density 118 Pop. / km2 2010 Urbanisation rate 77.3 Percent 2008 GDP 1633 PPS, billion 2009 GDP/capita 25,300 PPS 2009 Postal services to GDP ’99/09: 1.05%/0.93% Ratio 1998/2008

NRA Autorité de Régulation des Communications Électroniques et des Postes (ARCEP) NRA responsibilities? Authorisation, US rates, Special Tariffs, USP Accounts, Quality of US (mesure- ments and monitoring), User complaints, Cross subsidy in US, Cross subsidy in non-US Incumbent La Poste Main activities of incumbent Mail – parcels/express – banking activities Employment, incumbent 248 637 (full time equivalents) Chapter 9 FRANCE Source of financing - Note: - means no answers in questionnaire

Source: ITA/WIK (2009) Country fiche, Eurostat, NRA USP Box 9.1 – Country summary The volume of addressed items in France decreased by 2.5 percent from 2007 to 2008. Corre- Indicator 9.1.2 Volume of items delivered by segment in total market, millions of spondence declined by 3.3 percent, direct mail by 1.3 percent, publications by 2.9 percent and cross-border outbound by 0.5 percent. Unaddressed items, express and parcels all increased items volumes, by 5.9, 3.5, and 0.5 percent, respectively. Segment 2005 2007 2008* France transposed Directive 2008/6/EC as of January 2010. Addressed items 20 509 20 302 19 806 The opening of the French postal market segments is accomplished for unaddressed items, Letters - - - cross-border outbound mail, express and parcels. As of 2010, addressed items are still not fully legal open to competition due to the presence of reserved area. Correspondence 11 950 11 821 11 422 The French NPO has almost full market share in correspondence and direct mail. In publica- Direct mail 4 856 4 795 4 732 tions, unaddressed items and cross-border outbound parcels there is some competition. The Publications 1 827 1 721 1 670 French NPO has little market share in express and domestic business parcels. Unaddressed items 18 570 19 515 20 670 USO fund is set up, but not yet activated, to compensate La Poste for net cost of USO. Cross-border outbound 558 499 497 There have been six competition cases related to the postal sector since 2007. All of them Express 275 314 325 were revolving around the French NPO, La Poste. Four of these cases were specifically on the Parcels 346 361 363 USO segment. Total - - - The French NPO is VAT exempted on all USO products. Note: - means no answers in questionnaire Source: NRA

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Indicator 9.1.3 Revenues from segments in total market, millions of Euro 9.2. REGULATORY FRAMEWORK AND PRACTICES Segment 2005 2007 2009 Mail 8 470 8 581 8 382 Indicator 9.2.1 National regulatory framework Express 2 000 2 150 2 269 Question Yes/No Name of law Year of en- Logistics - - - actment Financial - - - Is postal law Yes Loi du 20 mai 2005 relative à la régulation des activités postales 2005 Others - - - enacted ? http://www.industrie.gouv.fr/poste/textes/loi200505eng.pdf Total - - - Is Directive Yes Loi du 9 février 2010 relative à l’entreprise La Poste et aux activi- 2010 – first half 2008/6 trans- tés postales Note: - means no answers in questionnaire posed? Source: NRA Is there a law that defines… Scope of USO? Yes Décret du 5 janvier 2007 relatif au service universel postal 2007 http://www.industrie.gouv.fr/poste/actu/UPSdecree05012007.p df Quality of USO? Yes Annual ministerial decree 2009 Loi du 9 février 2010 relative à l’entreprise La Poste et aux activi- tés postales USO rates? Yes Décision ARCEP sur le price cap 2009-2011 2009 http://www.arcep.fr/uploads/tx_gsavis/08-1286.pdf USP accounts? Yes Loi du 20 mai 2005 relative à la régulation des activités postales 2008 Reserved area? Yes Presently legeslation: Loi du 10 mai 2005 relative à la régulation 2005 des activités postales (before 01/01/2011) No Taking effect 2011: Loi du 9 février 2010 relative à l’entreprise La 2011 Poste et aux activités postales (after 01/01/2011) Authorisation Yes Décret n°2006-507 du 3 mai 2006 relatif à la régulation des activi- 2006 procedures? tés postales et modifiant le code des postes et communications électroniques http://www.industrie.gouv.fr/poste/actu/dec2006-507EN.pdf Arrêté du 3 mai 2006 relatif aux obligations des prestataires de services postaux titulaires d’une autorisation http://www.industrie.gouv.fr/poste/actu/dec2006-507EN.pdf Universal ser- Yes - Loi du 9 février 2010 relative à l’entreprise La Poste et aux activi- 2011 vice fund? tés postales - Projet de décret User protec- Yes Décret du 5 janvier 2007 relatif au service universel postal 2006 tion? Décret du 11 août 2006 relatif au régime de responsabilité applicable aux prestataires de services postaux http://www.industrie.gouv.fr/poste/textes/decret110806.pdf Arrêté du 4 mai 2007 pris en application de l'article L. 9 du code des postes et des communications électroniques et fixant les modalités d'information des utilisateurs d'envois postaux http://www.industrie.gouv.fr/poste/textes/O4may07.pdf Source: NRA, Ministry

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Indicator 9.2.2 Regulation of services based on new technologies Indicator 9.2.5 Mechanisms to ensure provision of universal service Question Answer Question Answer Are you aware of the presence of services based on new technologies in your market? For ex- Yes Describe the role - The USO is defined by code des postes et communications électroniques ample, hybrid mail or virtual delivery networks? played by the three - La Poste has been designated as the US provider for 15 years (Loi du 9 fé-vrier 2010 relative Do you have plans to regulate such products? For example, confidentiality of hybrid mail? - mechanisms: market à l’entreprise La Poste et aux activités postales) Note: - means no answer in questionnaire forces, designation - Quality of service objectives are set by the ministry of economy and public procure- - On request of ARCEP, La Poste publishes figures of quality of service in the “tableau de Source: NRA ment. Are other bord du service universel”. safeguarding meas- - ARCEP shall ensure that the universal service provider complies with ob-ligations arising ures present? out of the legislative and regulatory provisions pertaining to performance of the universal Indicator 9.2.3 VAT treatment of postal services service Postal product Part of USO? VAT rate Legal basis Source: NRA, Ministry Basic letter post Yes Exempt Bulk letters Yes Exempt Indicator 9.2.6 Legal mechanisms to ensure quality of universal service Direct mail Yes Exempt Décret n°2007-29 du 5 janvier 2007 relatif au service uni- Periodicals Yes Exempt versel postal et aux droits et obligations de La Poste et mo- Mechanism Yes/No Mechanism Yes/No difiant le code des postes et communications électroniques NRA sets monitoring standards? No, the standards are set by the ministry NRA can fine USP(s)? Yes Non-priority letters Yes Exempt Basic parcel post Yes Exempt http://www.industrie.gouv.fr/poste/textes/d5march07.pdf Annual measurement of quality Yes, Measurements are audited by ARCEP NRA can impose other Yes Bulk parcels No 19,6 % of service? remedies? Registered mail Yes Exempt Annual publication of results on Yes, On request of ARCEP, La Poste pub- quality of service monitoring? lishes figures of quality of service in the Source: NRA, Ministry “tableau de bord du service universel”. Source: NRA Indicator 9.2.4 Services ensured as universal services under national law Segment Defined as universal service by law? Are quality standards specified by law? Indicator 9.2.7 Financing the net cost of universal service Basic letter post Yes Yes Mechanism Yes/No Mechanism Yes/No Bulk letters Yes No Reserved area Yes Who contributes to the compensation fund? N/A Direct mail Yes No (Incumbent, competitors, other entities) Periodicals Yes No Compensation fund Yes (foreseen by law Public procurement No but not activated) Yes NRA: No Non-priority letter s Size of compensation N/A Direct compensation from public funds No fund (if present, in Euro) Basic parcel post Yes Yes Source: NRA Bulk parcels No No Note: The Ministry and the NRA have an Source: NRA, USP Indicator 9.2.8 Cost of universal service obligation and method for its calculation Question Answer What is the cost estimate of USO? (if A decree concerning calculation method of the USO is expected by 2010- swered differently on some questions available, in Euro) second half Source: NRA, Ministry

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Indicator 9.2.9 Authorisation/licensing for services within and outside universal Indicator 9.2.11 Involvement in competition cases since 2007 service area Case name Case Postal product(s) Issue status concerned Services within universal ser- If yes, state services e.g. letter Remarks, experiences, Commission Decision of 10 October 2007 on the State aid im- Closed Retirement pen- vices post items, otherwise insert “No” problems encountered plemented by France in connection with the reform of the ar- sions of La Poste What licensing procedure is used? Individual licence rangements for financing the retirement pensions of civil ser- civil servants (designation, general authorisation, vants working for La Poste (notified under document number individual license) C(2007) 4545) Which universal services are subject Domestic delivery of correspondence Only delivery is under lndividual Avis du Conseil de la concurrence n° 07-A-17 du 20 décembre Closed Universal service Commercial re- to individual license? and outgoing cross border mail licence. All other domestic ac- 2007 relatif à une demande d’avis de l’Autorité de régulation postal items bates tivities are free des communications électroniques et des postes (ARCEP) sur le dispositif de remises commerciales de La Poste (opinion Which universal services are subject None from the French competition authority) to general authorisation? Judgement of the Court of Appeal of Paris in the Chronopost Closed Universal service Commercial re- Are authorisation requirements pub- Yes case(26/03/2008 postal items bates lished (transparent)? Judgment of the Court (Grand Chamber) of 1 July 2008 — Closed Universal service Commercial re- Is the USP authorised under Art. 9*? Yes Chronopost SA (C-341/06 P), La Poste (C-342/06 P), Union postal items bates française de l'express (UFEX), DHL Express (France) SAS, Fed- Services outside universal ser- Answer Remarks, experiences, eral express international (France) SNC, CRIE SA, Commission vices problems encountered of the European Communities, French Republic, (Joined Cases C-341/06 P and C-342/06 P) For which services is general authori- - Judgement from the Court de Cassation (France) on the com- Closed Universal service Commercial re- sation required? mercial rebates granted by La Poste postal items bates For which services is an individual li- Correspondence Commission decision of 26 January 2010 on the State aid n°C Closed unlimited State cense required (ex ante approval)? 56/2007 on the unlimited State guarantee for La Poste guarantee Note: - means no answer in questionnaire Source: USP *) Article 9 of Directive2008/6/EC Source: NRA 9.3. REGULATION OF PRICES AND ACCOUNTING

Indicator 9.2.10 Access to postal infrastructure ensured by Member States Indicator 9.3.1 Method of price regulation Access to: Yes/No Other conditions: Yes/No Segment Method Remark Post codes Yes Change of address database Yes Address database Yes USP return services No Basic letter post Ex ante The method of price regulation is exclusively based on ex ante system Post office boxes Yes Street letter boxes No Bulk letters Ex ante Delivery boxes Yes Sorting centres Negotiated Direct mail Ex ante Other conditions: Yes/No Periodicals N/A Require downstream access to USP No Non-priority letter post Ex ante Source: NRA Basic parcel post Ex ante Bulk parcels N/A Source: NRA

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Indicator 9.3.2 Accounting requirements 9.4. ROLE OF NRA Question Answer Question Answer Separation of accounts No. of up/down stream accounts 6 Indicator 9.4.1 NRA powers Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA 2006 Task or power Yes/No Task or power Yes/No No. of reserved product accounts 8 Transparency Require USP cost allocation system? Yes Levy fines? Yes Unreserved product accounts required? No Independent body reviews USP accounts? Yes Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- No No. of unreserved product accounts 12 Last review of USP accounts 2009 ments? Review cost allocation to non-USO? - Seek court order? No Application of tariff principles Body reviewing USP accounts (Type of body) Firm employed by Require data from USP (Art. 22*)? Yes Cancel unlawful rates? No Bulk services within USO? USP Yes Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Does USP conclude individual agreements? Yes NRA issues statement of compliance? Yes Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Individual agreement: cost based price re- - Last publish statement of compliance 2009 Require downstream access? No quired Individual agreement: NRA has cost data? No Publish cost allocation system? Yes Note: - means no answers in questionnaire USP has special tariffs? Yes USP financial accounts audited? Yes *) Article 22 of Directive 2008/6/EC Up- and downstream accounts? Yes Last published financial accounts 2009 Source: NRA Note: - means no answer in questionnaire Source: NRA Indicator 9.4.2 NRA human and financial resources Question Answer Indicator 9.3.3 Cost accounting system of the USP Size of budget? (€ thousands) 22 360 K€ for the whole NRA, of which 1 908 K€ for postal affairs Question Answer Number of total staff ? 169 (Of which, staff dealing with postal affairs) 14 What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) ABC + FAC (cf Article 14.3 postal Source of NRA budget Annual finance bill – budget of Ministry of economy (program N° 134) directive) Who approves NRA budget Parliament Is the cost accounting system approved by the National Regulatory Authority? Yes Source: NRA Assessment of the system (pros and cons) Pros : to be closer to the business and the costs allocation is more precise Indicator 9.4.3 NRA independence Cons : It is a system long & difficult to implement Note: FAC = fully allocated cost accounting, Question Yes/No Question Answer Source: USP, NRA Can government guide NRA on policy? No Who, and under what conditions, can The President if the appoint NRA head? position is vacant

Some NRA decisions require governmen- No Who, and under what conditions, can Nobody Indicator 9.3.4 Promoting access to and affordability of postal services tal support? dismiss NRA head? Question Yes/No If yes, how? Can government suspend NRA orders? No Minimum qualifications for NRA heads Yes Non-discriminatory prices (Art. 12) required? Yes Included within Art 1 of the French Postal Code Source: NRA Affordability (Art. 12) defined in national law? Yes Included within Art 1 of the French Postal Code Source: NRA, Ministry

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Indicator 9.4.4 Complaint handling – appeal from NRA decisions Indicator 9.4.8 NRA relations with customer associations Short description Question Answer Question Answer ARCEP has created the 31st of march 2008 a Consumer Committee dedicated to postal affairs. The objective is Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? No to discuss all user-related issues related to postal regulation to make sure that ARCEP exercise its powers in the To whom is NRA decision appealed? Court Number of NRA decisions reversed? N/A best interest of the consumers. ARCEP seeks to strengthen the dialogue between stakeholders, to understand consumers’ points of view, to explain ARCEP’s work, to identify problems, to prepare decision-making, to facili- Source: NRA tate the flow of information between its members, and to provide consumers associations with details on AR- CEP’s decisions and on market monitoring.

The Postal Consumer Committee meets twice a year focussing on definite subjects and topics of current rele- Indicator 9.4.5 Enforcement of competition rules by NRA and cooperation with vance. At the first four meetings — in March and September of 2008 and April and november of 2009 — the fo- NCA cus was mainly on general terms of sale of La Poste, quality of universal service (transparency, establishment of Question Yes/No Question Yes/No quality indicators, handling of lost parcels and forwarding), accessibility to mailboxes in buildings, and sending small items at the letter tariff. Specific work of the Consumer Committee is performed in groups and subgroups. Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Source: NRA Note: ‘NCA’ national competition authority. Source: NRA 9.5. MARKET STRUCTURE AND COMPETITION

Indicator 9.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Indicator 9.5.1 Information about the incumbent Question Answer Question Answer User protection procedures in postal or con- Both USP(s) required to issue annual report Yes sumer law? Name of incumbent La Poste Main activities Mail – parcels/express – banking activities Enforcement by NRA or national consumer Both NRA issues annual report Yes Legal status Limited company Employment 248 637 (full time equivalents) protection authority (NCPA)? State ownership (percent) 100% Source of financing - Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Source: USP Applies to non-USO services Yes Agency reviewing operator Ombudsman Remedies by competent national authority? (maximum fee) Indicator 9.5.2 Incumbent profits, 2009, national currency Note: - means no information Statistic Value Source: NRA Total profit in 2009 20.5 billion€

Percentage of profit coming from letter mail 23,6% Indicator 9.4.7 Main issues of discussion between NRA and USP Percentage of profit coming from reserved area (if present) - Issues (short description in bullet points) Note: - means no information NRA: Source: USP • Quality of service monitoring and measurement , • Tariffs ; • Accounting ; • Affordability for sending small items. USP: • Tariff regulation • US definition • Compliance with US obligations (quality of service, delivery, complaints, accessibility) • Cost accounting Source: NRA, USP

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Indicator 9.5.3 Mail market segmentation Indicator 9.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the acquired Main objectives behind the ac- Percentage opened to Subject to li- No. of sig- Date company company quisition competition cense / au- nificant- No mergers or acquisitions Under na- thorisation? competi- Names of significant Actual Source: USP Segment tional law (Yes/No) tors competitors Addressed items Moderate Low Letters Moderate Very low yes No None Indicator 9.5.6 New entrants since 2008 Correspondence reserved area – Very low Yes No None End-to-end or Moderate No. of Approximate mar- up/downstream com- Direct mail reserved area - Very low No No None Segment entrants ket share petition? Name Moderate Mail 4 Small local companies End to end competition Ciblex, CS63, 3L Distriplis, Publications Substantial Substantial No Yes No direct competitor to La ARD Intercorrespondance, (Postal ad- Poste, but the early deliv- dressed press ery of press competes. Express No new entrant End to end competition item are subsi- Logistics No data dized) Financial No data Unaddressed items 100 % Moderate No Yes Adrexo Others No data Cross-border out- 100 % Moderate No Yes Deutsche Post, Spring Source: NRA bound global Mail, IMX, Swiss Post, Belgian Post, Royal Mail Express 100 % Intense No Yes TNT, DHL, UPS, Fedex Indicator 9.5.7 Cross border mail Parcels 100 % Intense for No Yes Competitors only in BtoB Volume (out- Reserved Main actors (if not reserved to Terminal dues regulated per parcels sent and BtoC bound) for USP? incumbent) Art. 13? by busi- 464 million Nothing Deutsche Post, Spring global Mail, Yes, Art 13 of the UPU convention nesses items in 2008 IMX, Swiss Post, Belgian Post, Royal deal with added services, not with Total Mail terminal dues Source: NRA Source: NRA

Indicator 9.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Indicator 9.5.8 Presence and role of mail consolidators in the market Segment Approximate sum of market shares of 3 main competitors Question Answer Are companies offering mail consolidation services present in the market? Yes. 3 companies Letter post (open area) Without La Poste, the market Share of all competitors is less than 1% How large is the turnover of mail consolidators in relation to the postal market? 5% Parcels No data available Have you handled any competition cases involving mail consolidator? No Express No data available Source: NRA Unaddressed items Above 90%* Note: *: the sum of market share of three main competitors for unaddressed items represents above 90%

Source:only NRA if Mediapost (a subsidiary of

Groupe La Poste) is included.

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9.6. STRUCTURE OF MARKET DEMAND Indicator 9.6.4 Trends in mail substitution Short description (in bullet points) Indicator 9.6.1 Revenues and volumes generated by consumers vs. business cus- • The decrease of mail volumes is a strong tendency. The structural decrease of mail volumes has been ampli- fied by the economic crisis. Mail substitution is increasing as companies are rationalising their postal flows tomers in 2009, national currency, millions of items and as electronic exchanges are rapidly developing. Direct mail is also negatively affected by the economic difficulties faced by traditional distance sellers and by the reduction of advertising expenditures of firms. Segment Total Approximate market Source: USP Revenue Volume share in the total market Addressed items (domestic) - 15 357 - Letters - - - Indicator 9.6.5 Effect of the financial crisis on revenues in 2009 Correspondence - - - Segment Estimate of the effect of the financial crisis on revenues Reserved area - 12 815 - (please write ‘decline’ or ‘increase’ below, where relevant) Direct mail - - - Less than 5% 5-15% more than 15% Publications - 1 582 - Addressed items (domestic) Unaddressed items - - - Letters Cross-border mail outbound - - - Correspondence Express - - - Reserved area Parcels - - - Direct mail Total - - - Publications X Note: - means no answer in questionnaire Unaddressed items Source: USP Cross-border mail outbound Express Parcels Indicator 9.6.2 Revenues and volumes generated by consumers vs. business Total customers in 2008, national currency, millions of items Source: USP Segment Total Revenue Volume Addressed items (domestic) - 16 126 9.7. PRICE PERFORMANCE: Letters - - Correspondence - - Indicator 9.7.1 Standard public tariffs, 2005-2009, national currency Reserved area - 13 470 Segment 2005 2007 2009 Direct mail - - Single item: 20g tariff letter 0.53 0.54 0.56 Publications - 1 670 Single item: 100g priority mail 1.22 1.30 1.35 Unaddressed items - - Single item: 500g insured and registered 5.26 5.40 5.82 Cross-border mail outbound - - Single item: 1 kg parcel 6.15 6.3 6.7 Express - - Bulk mail: composed of 20g letters 0.26 0.27 0.269* Parcels - - Bulk mail: composed of 100g letters 0.37 0.377 0.36* Note: - means no answer in questionnaire Note: *) New offers have Source: USP Source: USP Indicator 9.6.3 been launched in 2008

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9.8. SOCIAL AND CONSUMERS ASPECTS Indicator 9.9.3 Supply of e-commerce services, total market Indicator 9.8.1 Employment indicators, 2009 Question Answer - Incumbent USP Do you supply own e-commerce services? What kind? - Employment (thousand), in full time equivalents 248 637 What share of turnover do you generate from own e-commerce services? What is the - trend? Percentage of total country employment - What own e-commerce services do you plan to develop? - Share of civil servants 57,6% Are you able to indicate how the percentage of your turnover that originates from or - Share of part time and temporary employment 3.3% is related to third-party e-commerce transactions (e.g. purchases on the internet) Share of outsourced and subcontracted employment none Note: - means no answer in questionnaire Note: - means no information Source: USP Source: USP, UNI Europa Indicator 9.9.4 Supply of hybrid mail services, total market Indicator 9.8.2 Wage and productivity indicators Question Answer - Incumbent Incumbent Do you supply hybrid mail or virtual delivery solutions? What kind? Yes Wages as a proportion of total costs 63,9% If yes, how many years have you been supplying these services for? - Average wage per hour (€) - What share of turnover do you generate from hybrid mail and/or virtual - delivery solutions? What is the trend? Note: - means no information Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes Source: USP Note: - means no answer in questionnaire Source: USP 9.9. TECHNOLOGICAL DEVELOPMENTS Indicator 9.9.5 Developments within networks and mail consolidation services Indicator 9.9.1 Innovation, technology and new services Question Answer Service Do you offer? Volume (million of items) Do you plan to offer? Have you carried out a major reorganisation of your Yes. La Poste has launched a vast modernisation pro- logistics network? For example, decentralising, im- gramme called “Cap Qualité Courrier” which consists in Hybrid mail Yes - - plementing hub & spoke systems? massive investments (3.4 billion €) in order to completely Virtual delivery of mail Yes (e.g. Digiposte) - - reorganise the logistical process by the creation of new platforms for the massification and automatisation of mail. Pick up locations for parcels Yes (Cityssimo pick up Not applicable - (parcel shops) locations) Do you use different networks for letters and parcels Yes at collection, sorting, transportation or delivery lev- Note: - means no answer in questionnaire els? What are the reasons? Source: USP What is the relative importance of road, rail and air - as modes of transportation for mail? Have these shares changed recently? Why? Note: - means no answer in questionnaire Indicator 9.9.2 Statistics on technological progress Source: USP Indicator Value in Increase/decline 2009 since 2007 Percentage of letter mail benefiting from automated processing (e.g. sorting) - - Percentage of parcels benefiting from automated processing (e.g. sorting) - - Note: - means no answer in questionnaire Source: USP

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Indicator 9.9.6 The most important environmental initiatives implemented Brief answer (in bullet points) • Strategic partnership with the World Wild Foundation (WWF). • Sustainable Transport: Decrease its emissions by 15% before the end of 2012. • “Responsible Mail”: Objective for example is to use internally 100% recycled or FSC certified paper by 2012. • Sustainable Buildings: The new buildings of La Poste will be built inspired by the HQE or BBC criteria known in the construction sector. Source: USP

9.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 9.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 84 84,7 95,5 96,8 - - - - Note: - means no answer in questionnaire Source: NRA

Indicator 9.10.2 Transit time for cross-border priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+5 stan- D+5 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - 88 94.4 97 98.7 Note: - means no information Source: Ecorys (2008a), USP

Indicator 9.10.3 Quality of service indicators Indicator Value Percentage of lost mail - Number of postal outlets (post offices and agencies) and 17,000 postal outlets (by law) number of letter boxes per 10.000 inhabitants. The implementation of CEN standards. Yes Note: - means no answer in questionnaire Source: NRA

GERMANY

In 2008, the main competitors to DPAG (amongst others TNT Post and PIN AG) filed a complaint about the implementation of a sector wide minimum wage. After a series of court procedures, the Federal Administrative Court in January 2010 issued a final ruling in favour of the plaintiffs on procedural grounds. The conclusion was that the federal government had de- prived the plaintiffs of the right to participate in the social dialogue and that therefore the minimum wage ordinance is invalid. The plaintiffs were thereafter released from the obligation to pay the minimum wage. One of the legal barriers is the regulation of wages for letter service providers introduced 2008

(discussed in chapter 4 of the report). USO fund can be set up, but is not yet activated, to compensate Deutsche Post for net cost of USO. On March 26th 2010 Bundesrat passed a law to amend the scope of VAT exemption for Deutsche Post.

10.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 10.1.1 Country facts Country facts Value Unit Year Population 81.8 Million 2010 Population growth -0.4 Percent 2000-2010 Chapter 10 GERMANY Population density 229 Pop. / km2 2010 Urbanisation rate 73.6 Percent 2008 GDP 2,233 PPS, billion 2009 GDP/capita 27,300 PPS 2009 Postal services to GDP ’99/09: 0.89%/0.84% Ratio 1998/2008 Box 10.1 – Country summary NRA Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisen- bahnen (BNetzA) The German volume of letters up to 1kg is estimated to have fallen by 2.5 percent between NRA responsibilities? Authorisation and Licensing, Price regulation, Access Regulation, control of 2007 and 2009. abuse of dominant market power, market monitoring, Safeguarding and Quality As of the second half 2010, Germany transposed Directive 2008/6/EC. of US, User complaints There is no designated USP. Universal services are provided on market terms. NRA will regu- Incumbent Deutsche Post DHL late if market fails to deliver universal services. This entails all postal market segments are Main activities of incumbent Mail, Express, Logistics fully open for competition. Employment, incumbent 436,651 average FTE in 2009 The market share of the German incumbent is 88.2% for letter mail, 11.2% for publications and Source of financing Stock-quoted: free float 69,5 %; KfW (State owned bank) 30,5 % 39% for parcels. Unaddressed postal and express items have emerging and substantial com- Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, DP AG (incumbent) petition respectively. The markets are fully opened legally (no reserved area as of 2010). In the time period 2007-2010, there have been no antitrust cases handled by the German Au- thorities. However, Germany has been involved in three state aid cases, handled by the Euro- pean Commission and the ECJ. In 2010, the ECJ overruled the decision taken by the Commis- sion in a state aid case against DPAG, initiated by UPS. The ECJ found the aid granted DPAG to be compatible with the common market. In 2008, the Commission decided in two state aid cases against DHL, related to the movement of its European air hub to Leipzig. In both cases, the aid granted DHL was found to be partially compatible with the common market.

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Indicator 10.1.2 Volume of items delivered by segment in total market, millions 10.2. REGULATORY FRAMEWORK AND PRACTICES of items Segment 2005 2007 2009 Indicator 10.2.1 National regulatory framework Addressed items - - - Question Yes/No Name of law Year of en- Remarks Letters (Up to 1 kg) 16,892 17,708 17,300 Estimated actment Correspondence - - - Is postal law en- Yes Postal Act 1998 Direct mail - - - acted? Publications - - - Is Directive 2008/6 No 2010 Postal Act is already in line with all ma- Unaddressed items - - - transposed? jor requirements of the Directive, mini- mal amendments are still necessary Cross-border outbound (Up to 1 kg) 483 Confidential Confidential Is there a law that defines… Express 224 (2006) 238 - Scope of USO? Yes Postal Act More precisely defined in the Universal Parcels 1,599 (2006) 1,648 - Service Ordinance Total - - - Quality of USO? Yes Postal Act More precisely defined in the Universal Note: - means no answers in questionnaire Service Ordinance Source: NRA USO rates? Yes Postal Act General stipulation of affordability and criteria for tariff regulation USP accounts? Yes Postal Act General stipulation regarding separate Indicator 10.1.2 Revenues from segments in total market, millions of Euro accounting Segment 2005 2007 2009 Reserved area? No Authorisation proce- Yes Postal Act Mail (Up to 1 kg) 9,863 10,063 9,400 Estimated dures? Express 5,721 (2006) 6,445 - Universal service Yes Postal Act Logistics - - - fund? Financial - - - User protection? Yes Postal Act More precisely defined in the 2001 Others - - - Postal Service Ordinance Total - - - Other special rights (which)? Note: - means no answers in questionnaire Source: Ministry and NRA Source: NRA

Indicator 10.2.2 Regulation of services based on new technologies Question Answer Are you aware of the presence of services based on new technologies in Yes your market? For example, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? For example, confidentiality A first decision on rates approval has of hybrid mail? been taken. Source: NRA

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Indicator 10.2.3 VAT treatment of postal services Indicator 10.2.6 Legal mechanisms to ensure quality of universal service Postal product Part of USO? VAT rate Legal basis Mechanism Yes/No Mechanism Yes/No Universal services (as from 01 July 2010) Yes Mostly VAT Act, amendments regarding postal NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes exempted services entered into force 01 July 2010 Annual measurement of quality of service? Yes* NRA can impose other Yes All other postal services is subject to No 19 % VAT Act, amendments regarding postal remedies? VAT (as from 01 July 2010) services will enter into force 01 July 2010 Annual publication of results on quality of service monitoring? Biannual* Source: Ministry; NRA Note: * NRA has to monitor continuously the provision

services. However, the publication is done on Indicator 10.2.4 Services ensured as universal services under national law Indicator 10.2.7 Financing the net cost of universal service Segment Defined as universal service by law? Are quality standards specified by law? Mechanism Yes/No Mechanism Yes/No Basic letter post Yes Yes Reserved area No Who contributesand the qualityto the compensation of service of thefund? postal universal* Bulk letters -- -- (Incumbent,ly biannually competitors, in the other entities) Direct mail -- -- Compensation fund Yes Public procurement ** NRA’s Activity Report. Periodicals Yes Yes Size of compensation fund Not acti- Direct compensation from public funds No Non-priority letterrs No N/A (if present, in Euro) vated Basic parcel post Yes Yes Note: * § 16 Postal Act, Compensation Levy, see Annex Bulk parcels No N/A Source: NRA **§ 14 Postal Act, Soli Source: NRA citing of bids for postal services, see Annex Indicator 10.2.5 Mechanisms to ensure provision of universal service Indicator 10.2.8 Cost of universal service obligation and method for its calcula- Question Answer tion Describe the role The universal service is provided by all postal companies, no obligation is imposed a priori Question Answer played by the three on specific postal companies. In case the Universal Service is not appropriately or ade- What is the cost estimate of USO? (if available, Within the German legal framework specific provisions for calcu- mechanisms: market quately provided, the NRA may oblige a market-dominating licence-holder to provide the in Euro) lating net-costs for universal services does not exist. However, in forces, designation relevant universal service or activate public procurement procedures*. The licence-holder af- case of US deficit, a licensee may demand compensation from and public procure- fected by a possible financial deficit due to the obligation receives financial compensation What is the name of calculation method? (if available) the Regulatory Authority for an obligation imposed the postal ment. Are other from other licence-holders (with a certain minimum turnover in the area of licensed activi- Act when it evidences that the long-term incremental costs of safeguarding meas- ties ) within a fund solution Short description of calculation method (if providing the relevant service efficiently, inclusive of adequate ures present? If a universal service is not being appropriately or adequately provided or where there is rea- available) interest on capital employed, exceed the income from that ser- son to believe that such will be the case, each licensee with a certain amount of sales in the Is a thorough documentation of calculation vice. The income shall be computed on the basis of the afford- licensed sector in the preceding calendar year shall undertake to make a contribution in or- method available? Where? able prices as laid down by ordinance having the force of law ac- der to facilitate provision of the relevant universal service cording to §11(2) of the postal Act. Is calculation method approved by the NRA? Note:*) This is an instrument foreseen in Does NRA calculate USO cost? Source: Ministry, NRA Source: NRA

the Postal Act – case not yet occured

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Indicator 10.2.9 Authorisation/licensing for services within and outside universal 10.3. REGULATION OF PRICES AND ACCOUNTING service area Services within universal services Answers Remarks Indicator 10.3.1 Method of price regulation What licensing procedure is used? Individual Licence (designation, general authorisation, individual license) Segment Method Remark Which universal services are subject to individual license? Letter items up to Basic letter post Ex ante Up to 1 kg 1000 g Bulk letters Ex post More than 50 items Which universal services are subject to general authorisation? For all postal services, General authorisation. Direct mail Ex post More than 50 items where an individual li- in the meaning of no- cence is not required tification Periodicals Ex post § 25 Postal Act Are authorisation requirements published (transparent)? Yes Non-priority letter post Ex post § 25 Postal Act Is the USP authorised under Art. 9*? Yes There is no designated Basic parcel post Ex post universal service pro- Bulk parcels Ex post vider Source: NRA Services outside universal services Answers Remarks

For which services is general authorisation required? For all postal services, General authorisation where an individual li- in the meaning of no- cence is not required tification For which services is an individual license required (ex ante ap- Letter items up to proval)? 1000 g Source: NRA

Indicator 10.2.10 Access to postal infrastructure ensured by Member States Access to: Yes/No Other conditions: Yes/No Post codes No Change of address database Yes Address database No USP return services Yes Post office boxes Yes Street letter boxes Yes Delivery boxes Yes Sorting centres Yes Other conditions: Yes/No Require downstream access to USP Yes Source: NRA

Indicator 10.2.11 Involvement in competition cases since 2007

GERMANY

Indicator 10.3.2 Accounting requirements Indicator 10.3.3 Cost accounting system of the USP Question Answer Question Answer Question Answer Separation of accounts No. of up/down stream accounts * 1 What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) System according to Art. 14 Did NRA approve product accounts? * 1) Special Tariff: 1st year of data to NRA - Postal Directive. No. of reserved product accounts * 1) Transparency Is the cost accounting system approved by the National Regulatory Authority? Yes Unreserved product accounts required? * 1) Independent body reviews USP accounts? Yes Assessment of the system (pros and cons) *2 No. of unreserved product accounts * 1) Last review of USP accounts 2007 The cost of efficient service provision is derived from the long run incremental costs of providing the service plus an * 2 appropriate amount for volume-neutral common costs, both inclusive of a profit mark up commensurate with the Body reviewing USP accounts (Type of body) NRA business risk involved, to the extent that these costs are required to provide the offering according to § 20 Postal Application of tariff principles * 2 Act. Bulk services within USO? No NRA issues statement of compliance? * 5 According to the German Postal Act, rates subject to approval shall be based on the costs of efficient service provi- Does USP conclude individual agreements? * 2 Last publish statement of compliance -- sion and may not (unless a legal obligation or another objectively justifiable reason can be evidenced.): Individual agreement: cost based price required * 2 + 3 Publish cost allocation system? -- 1.Contain any surcharges prevailing solely as a result of the provider's dominant position in the market; Individual agreement: NRA has cost data? No USP financial accounts audited? Yes 2.contain any discounts prejudicing in anti-competitive manner the competitive opportunities of other companies * 3 * 2+6 in a postal services market; USP has special tariffs? Yes Last published financial accounts 2009 3.create any advantages for individual users in relation to other users of postal services of the same type. * 2 The cost of efficient service provision is reflecting the price of a competitive market. Up- and downstream accounts? * 1 Source: NRA Note: Accounting requirements for ma

* 1: German NRA proceeds to an in Indicator 10.3.4 Promoting access to and affordability of postal services provided for rates approval Question Yes/No If yes, how? * 2: There is no designated USPrket-dominant in Germany. player, not all USPs Non-discriminatory prices Yes Postal Act Art.20: no distortion of competition by improper pricing strate- (Art. 12) required? gies (regarding all postal Services of market dominating companies) * 3 ex post regulation according to § 25.2 of th direct control of accounts when Affordability (Art. 12) de- Yes Postal Act Art 11: Affordability of universal service tariffs has to be safe- tage for individual users, cost based prices) fined in national law? guarded. Tariff approval practice of the NRA ( Bundesnetzagentur ) has to * 4: The incumbent DP AG offers individual agreements follow these principles Source: Ministry; NRA * 5: Indirectly by rates approval controlling the cost documents * 6: Stock quoted company; fina Source: NRA e Postal Act (no surcharges, no discounts, no advan-

ncial accounts audited by cert

ified accountant, not by NRA

GERMANY

10.4. ROLE OF NRA Indicator 10.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 10.4.1 NRA powers Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Task or power Yes/No Task or power Yes/No To whom is NRA decision appealed? Administrative Number of NRA decisions reversed? 0 Court Require USP cost allocation system? Yes Levy fines? Yes Source: NRA Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- Yes ments? Review cost allocation to non-USO? Yes Seek court order? Yes Indicator 10.4.5 Enforcement of competition rules by NRA and cooperation with Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes NCA Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? Yes Question Answer Question Yes/No Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Require downstream access? Yes Who is the primary enforcer of General competition law: NCA NRA obliged to share Yes competition rules? Sector specific competition law: NRA info with NCA? Note: Not the fact of being USP is decisive, but the market power. Thus the above powers concern only Note: ‘NCA’ national competition authority. dominant market players, not all USPs Source: NRA Source: NRA

Indicator 10.4.6 Regulation of user protection procedures and remedies Indicator 10.4.2 NRA human and financial resources Question Answer Question Answer Question Answer User protection procedures in postal or consumer Postal USP(s) required to issue annual No Size of budget? (€ thousands) - law? report Number of total staff ? - Enforcement by NRA or national consumer protec- Civil courts NRA issues annual report Yes (Of which, staff dealing with postal affairs) 35 tion authority (NCPA)? Source of NRA budget General budget of the State or government Applies to non-USP(s) in USO area? Yes, partly Review of operator decision en- Yes sured Who approves NRA budget Parliament Applies to non-USO services Yes Agency reviewing operator NRA Note: - means no answers in questionnaire Remedies by competent national authority? (maxi- - Source: NRA mum fee) Note: - means no answers in questionnaire Indicator 10.4.3 NRA independence Source: NRA Question Yes/No Question Answer Can government guide Yes Who, and under what conditions, can ap- Federal Government upon Indicator 10.4.7 Main issues of discussion between NRA and USP NRA on policy? point NRA head? By the Federal Govern- proposal of the Advisory ment upon proposal of the Advisory Council Issue Short description (in bullet points) Council No special issues of discussion Some NRA decisions re- No Who, and under what conditions, can Upon request of the Ministry Source: NRA quire governmental sup- dismiss NRA head? by the Federal Government port? for an important reason Can government suspend No Minimum qualifications for NRA heads No other professional activity NRA orders? allowed Indicator 10.4.8 NRA relations with customer associations Source: NRA Example of relation Short description (in bullet points) Possibility to refer cases to the Consumer Associations Source: NRA

GERMANY

10.5. MARKET STRUCTURE AND COMPETITION 10.5.3 Mail market segmentation Percentage opened to Subject to li- No. of sig- Names of significant competition cense / au- nificant competitors Indicator 10.5.1 Information about the incumbent Actual thorisation? competi- Question Answer Question Answer state of (Yes/No) tors Name of incumbent Deutsche Post DHL Main activities Mail, Express, Logistics Under na- competi- Legal status Listed PLC Employment 436.651 Average FTE in 2009 Segment tional law tion State ownership (percent) 30.5% Source of financing Stock-quoted Addressed items 100% Low- Source: Incumbent (DP AG) emerging Letters 100% Yes (Up to 1kg) 3 --

Correspon- 100% Yes (Up to 1kg) N/A Indicator 10.5.2 Incumbent profits, 2009, national currency dence Statistic Value Direct mail 100% Yes (Up to 1kg) N/A Publications 100% N/A Total profit in 2009 EBIT €231m Unaddressed items 100% Emerging N/A Percentage of profit coming from letter mail EBIT € 1383m substantial Percentage of profit coming from reserved area (if present) Not applicable (no reserved area) Cross-border out- 100% Emerging Yes (Up to 1kg) 4 -- Note: - means no answers in questionnaire bound Source: Incumbent (DP AG) Express 100% Substantial Yes (Up to 1kg) 4 DHL, FedEx, TNT, trans-o-flex Parcels 100% Substantial 5 DHL, DPD, GLS, UPS, Hermes Total Note: The level of competition can be described as

Source:tense. NRA

Indicator 10.5.4 Sum of market shares of 3 main competitors (excl. incumbent) (in ascending order): none Segment Approximate sum of market shares of 3 main competitors for 2009 Letter post (open area) Low-emerging (up to 1 kg) , emerging, substantial, in- Parcels substantial Express substantial Unaddressed items -- Note: - means no answers in questionnaire Source: NRA

GERMANY

Indicator 10.5.5 Mergers and acquisitions of incumbent since 2007 Indicator 10.5.9 Presence and role of mail consolidators in the market Date Name of acquired company Main activities of Main objectives Question Answer the acquired behind the ac- Are companies offering mail consolidation services present in the market? Yes company quisition 2008 Express Couriers Australia Pty Ltd., Australia Express Services - How large is the turnover of mail consolidators in relation to the postal market? 2,3% Have you handled any competition cases involving mail consolidator? Yes 2008 Polar Air Cargo Worldwide Inc., USA Express Services - Source: NRA 2008 Williams Lea Holdings Plc, United Kingdom Supply Chain/CIS -

2008 DHL Logistics (China) Co. Ltd., China (formerly Exel- Supply Chain/CIS - Sinotrans Freight Forwarding Co. Ltd., China) 10.6. STRUCTURE OF MARKET DEMAND 2007 The Stationary Office Holdings Limited, United Kingdom Print/Document - Management 2007 ASTAR Air Cargo Holdings LLC, USA Express Services - 2007 Polar Air Cargo Worldwide Inc., USA Express Services - Indicator 10.6.1 Revenues and volumes generated by consumers vs. business 2007 AeroLogic GmbH, Germany Express Services - customers in 2009, national currency, millions of items 2007 FC (Flying Cargo) International Transportation Ltd., Israel Logisitcs - Segment Business customers Private consumers Approximate Revenue Volume Revenue Volume market share in 2007 Postbank Versicherungsvermittlung GmbH, Germany Financial Services - the total market Note: - means no answers in questionnaire Addressed items (domestic) - - - - - Source: Incumbent (DP AG) Letters - - - - 88.2%* Correspondence - 6,663m - 1,292 (Germany) Indicator 10.5.6 New entrants since 2008 Reserved area - N/A - N/A - Direct mail - 6,323m - N/A - Segment No. of Approximate market share End-to-end or Name entrants up/downstream Publications - 1,937 - N/A 11.4% competition? Unaddressed items - 4,580 - N/A - Mail 239 < 1 % - - Cross-border mail outbound - - - - - Express - Express - - - - - Logistics - Parcels - 648m - 113 39% Financial - Total - - - - - Others - Note: - means no answers in questionnaire Note: - means no answers in questionnaire Only DP AG Source: NRA *letter market share of the incumbent (DP AG) – Source NRA Data and structure of market demand Indicator 10.5.7 Cross border mail Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Confidential No -- No Source: NRA

GERMANY

Indicator 10.6.2 Growth rate in revenues and volumes generated by consumers 10.7. PRICE PERFORMANCE: vs. business customers between 2008-2009 Segment Business customers Private consumers Indicator 10.7.1 Public tariffs, 2004-2009 Revenue Volume Revenue Volume Segment 2005 2007 2009 Addressed items (domestic) - - - - Single item: 20g tariff letter 0.55 0.55 0.55 *1 Letters - - - - Single item: 100g priority mail 1.44 1.45 1.45 *1 Correspondence - -2.8% - -2.7% Single item: 500g insured and registered Different products and services available Reserved area - - - - Single item: 1 kg parcel 4.30 - 4.10 Direct mail - -8.5% - N/A Bulk mail: composed of 20g letters Depends on volume and degree of preparation Publications - - - - Bulk mail: composed of 100g letters Depends on volume and degree of preparation Unaddressed advertising - -7.3% - N/A Note: - means no answers in questionnaire Cross-border mail outbound - - - - Express - - - - *1: ex ante approved rates (price cap procedure) Parcels - -2%- 0.9% *2: DP AG general tariff, not approved by the NRA; All prices indicated refer to the incumbent: Total - -- - Source: NRA Note: - means no answers in questionnaire

Only DP AG growth rates 10.8. SOCIAL AND CONSUMERS ASPECTS Source: DP AG

Indicator 10.6.3 other moreother favourable prices of prices other arestak possible. Indicator 10.8.1 Employment indicators, 2009 Indicator 10.6.4 Trends in mail substitution Indicator Incumbent Short description (in bullet points) eholders are available. Employment (thousand), in full time equivalents 436.651 (Average FTE) • Ongoing trend: In Germany the domestic mail market is shrinking because electronic communication is in- Percentage of total country employment creasingly replacing paper-based communication. Share of civil servants 10.2% Source: incumbent / DP AG Share of part time and temporary employment -

Share of outsourced and subcontracted employment - Indicator 10.6.5: Effect of the financial cr Note: This figure refers solely to the incumbent. It

level. In Germany the number of DP AG employees in the letter market amounts to 166.120 (end isis on revenues in 2009 Source:2008) Incumbent (not FTEs); (DP AG)/ civil NRAservants: 49.691 (average 2009)

Indicator 10.8.2 Wage and productivity reflectsindicators the total number of employees on a worldwide Incumbent Wages as a proportion of total costs 47% Average wage per hour (€) - Note: - means no answers in questionnaire Source: Deutsche Post, Annual report 2009

GERMANY

10.9. TECHNOLOGICAL DEVELOPMENTS Indicator 10.9.3 Supply of e-commerce services, total market Question Answer – Incumbent Indicator 10.9.1 Innovation, technology and new services Do you supply own e-commerce Yes. Some examples: Customer access to services (calculation and purchase Service Do you offer? Volume Do you plan services? of postage; location of retail outlets and Packstations online and by mobile telephone). As of 2010 letter on the internet, (a binding, confidential and re- (millions of items) to offer? liable form of written electronic communication).Parcel business: solutions Hybrid mail Yes - - for internet sales, e.g. customers can go to www.meinpaket.de for easy, se- Virtual delivery of mail Yes - - cure and transparent online purchasing and payment. Parcel recipients receive advance notifications of when their parcels will arrive. Pick up locations for parcels (parcel shops) Yes -- - Note: - means no answers in questionnaire What share of turnover do you gen- Trend mail: In Germany the domestic mail market is shrinking because elec- erate from own e-commerce ser- tronic communication is increasingly replacing paper-based communication. There are several additional providers of these services in Germany vices? What is the trend? Source: NRA Trend parcel: Although in 2009, volumes in the German parcel market declined by approximately 2.7 % to around € 6.3 billion the parcel business has Indicator 10.9.2 Statistics on technological progress benefited from online sales, which saw another double-digit increase in Indicator Value in Increase/decline 2009 despite the economic crisis in 2009. 2009 since 2007 What own e-commerce services do - Percentage of letter mail benefiting from automated processing (e.g. sorting) >90% - you plan to develop? Percentage of parcels benefiting from automated processing (e.g. sorting) - - Are you able to indicate how the - (but see ‘trend parcel’ above) Note: - means no answers in questionnaire percentage of your turnover that originates from or is related to This answer concerns only the incumbent third-party e-commerce transac- Source: Incumbent (DP AG) tions (e.g. purchases on the internet) Note: - means no answers in questionnaire Source: Incumbent (DP AG)

Indicator 10.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent Do you supply hybrid mail or virtual delivery solutions? What kind? Yes. If yes, how many years have you been supplying these services for? -

What share of turnover do you generate from hybrid mail and/or virtual delivery - solutions? What is the trend? Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes. Note: - means no answers in questionnaire Source: Incumbent (DP AG)

GERMANY

Indicator 10.9.5 Developments within networks and mail consolidation services Indicator 10.10.2 Transit time for cross-border priority mail, 2009 Question Answer D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 Have you carried out a major reorganisation of your logistics network? For exam- Yes dard (% actual dard (% actual dard (% actual dard (% actual ple, decentralising, implementing hub & spoke systems? FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Do you use different networks for letters and parcels at collection, sorting, trans- Yes N/A N/A N/A N/A 85 96 N/A N/A portation or delivery levels? What are the reasons? Note: - means no information What is the relative importance of road, rail and air as modes of transportation for - Source: Ecorys (2008a) mail? Have these shares changed recently? Why?

Do you offer mail consolidation services? What type and to whom? * Note: - means no answers in questionnaire Indicator 10.10.3 Quality of service indicators Indicator Value *)Consolidation services by Williams Le Source: Incumbent (DP AG) Percentage of lost mail - Number of postal outlets (post offices and agencies) and number of letter boxes per 10.000 inhabitants. * Indicator 10.9.6 The most important environmental initiatives implemented The implementation of CEN standards. Yes Note: - no information available Brief answer (in bullet points) a (=DP AG subsidiary) – Source NRA • See our 60 page sustainability report (http://www.dp-dhl.com/en/responsibility-online_report_2010.html) *) DP AG 12548 postal outlets / 110.996 letter boxes (situation: 30.09.2009) Source: Incumbent (DP AG) Competitors: ca 27.500 postal outlets / 3783 letter box (situation 30.09.2009) Source: NRA

10.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 10.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) >80 - >95 - N/A N/A N/A N/A Note: - means no answers in questionnaire Source: NRA

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11.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 11.1.1 Country facts Country facts Value Unit Year Population 11.3 Million 2010 Population growth 3.6 Percent 2000-2010 Population density 86 Pop. / km2 2010 Urbanisation rate 60.9 Percent 2008 GDP 246.9 PPS, billion 2009 GDP/capita 21,900 PPS 2009 Postal services to GDP ’99/09: 0.27%/0.31% Ratio 1998/2008

NRA Hellenic Telecommunications & Post Commission (EETT) NRA responsibilities? Licensing (General Authorizations & Individual Licenses), secondary legislation drafting, Market Monitoring & Audit, Examination of User Complaints and Protec- tion of Consumer Rights, Hearing Procedures, International relations, Monitoring of Quality of US, Monitoring & Approval of Cost accounting system of the USP, Valuation of USP rates Name of incumbent ELTA Hellenic Post S.A. Main activities ELTA provides postal services (clearance,sorting,transport and distribution) of Chapter 11 GREECE specified quality at all points and affordable prices of up to 2 kilograms and up to 20 kilograms. It provides also financial services.etc Employment Box 11.1 – Country summary Source of financing Reserved Area (nevertheless it has been foreseen in the Greek postal law a compensation fund that has not been activated yet) The total volume of addressed items was fairly stable and fell only by about 1 percent between Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP 2007-2008. The volume of letter mail remained stable with declines in direct mail and publications offset by increase in correspondence. At the same time, deliveries of unaddressed items more than doubled although express dropped by nearly 60 percent. Parcel volumes grew by a healthly 40 percent.Total volume of all times grew by 1 percent from 2007 to 2008. The transposition of Directive 2008/6 has a deadline extended until 31 December 2012 and the implementing law is expected before the deadline. USO regulation was changed in 2010 as the NRA can no longer set rates for USP. The net cost of USO using activity based costing is estimated to 5.2 percent of ELTA’s (Hel- lenic Post’s) turnover of 0.6 bn € in 2009 (1.2 percent in 2008). The postal markets are legally open in unaddressed items, express and parcels. Letters, publications and cross border outbound mail (all up to 50 g) are all reserved areas in 2010. The Greek NPO, ELTA, has a very large market share in letters, publications and cross border outbound mail. In the express and parcels markets ELTA has a small market share In 2006 Greece experienced one competition case related to postal services: Case 183/2003 - regarding EC Decision C(2003) 4084 /11.11.2003 not to raise objection on state aid to ELTA. The Greek NPO is exempted for VAT on all USO products.

GREECE

Indicator 11.1.2 Volume of items delivered by segment in total market, millions of 11.2. REGULATORY FRAMEWORK AND PRACTICES items Segment 2005 2007 2008* Indicator 11.2.1 National regulatory framework Addressed items 588.4 644.2 640.3 Question Yes/No Name of law Year of Remarks Letter 503.9 558.0 558,0 enact- Correspondence 456.2 478,4 492,4 ment Direct mail 47.7 79,6 65,6 Is postal law Yes Law No. 2668/1998, Amended by law 3185/2003 1998 Transposition of Di- Publications 84.5 86.2 82,3 enacted? rectives 97/67/EC and 2002/39/EC Unaddressed items 10.3 29.9 65.3 Is Directive No By the end of 2012 Cross-border outbound 45.5 44.3 40.8 2008/6 the law transposing Express 35.9 40.8 16.0 transposed? Directive 2008/6/EC Parcels 8.5 10.3 14.4 will be enacted. Total 688.6 769.5 776.8 Is there a law that defines… Source: NRA Scope of Yes Law No. 2668/1998, Amended by law 3185/2003 1998 USO?

Quality of Yes “Re-establishment of qualitative specifications 2010 Indicator 11.1.3 Revenues from segments in total market, millions of Euro USO? and terms for the universal provision of postal services”. (Ministerial Decision Segment 2005 2007 2008* 58134/2275/2010) Mail 389.6 427.7 445.3 USO rates? No Draft Ministerial Dec. Express 251.5 289.2 307.3 under consultation Logistics - - - USP ac- Yes “Regulation regarding the cost accounting 2003 counts? methods used by the universal service provider Financial - - - in its internal auditing system” (NRA Regulation Others - - - 301/28/2003) Total 641.1 716.9 752.6 Reserved Yes -“Price and weight limits safeguarding the uni- 2005 Note: - means no answers in questionnaire area? versal service provider’s exclusive rights” (Minis- terial Decision 74196/1885/2005) Source: NRA Authorisa- Yes -“General Authorisations” (NRA Regulation 2009 tion proce- 504/145/2008, amended by 529/230/2009), - dures? “Individual Licenses” (NRA regulation 529/229/2009) regarding the provision of postal services. - Law 2668/1998 amended by Law 3185/2003 Universal Yes Law 3185/2003 (article, par. 5): on the basis of a 2003 Not established so far service fund? joint ministerial decision between the ministers of Finances and Infrastructure, Transport and Networks a universal service fund can defined and initiated. User protec- Yes -“Verification and monitoring process of com- 2004 tion? plaints lodged by users and settlement process of differences” (Ministerial Decision 36809/1027/2004) - Law 2668/1998 amended by Law 3185/2003 Source: NRA

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Indicator 11.2.2 Regulation of services based on new technologies Indicator 11.2.5 Mechanisms to ensure provision of universal service Question Answer Question Answer Are you aware of the presence of services based on new technologies in your market? For Hybrid Mail: Yes Describe the role ELTA (Hellenic Post) has been designated as the sole USP. ELTA is under the obligation to example, hybrid mail or virtual delivery networks? Virtual Delivery: No played by the three meet the quality standards and the delivery times which are described in the relevant Minis- Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No mechanisms: market terial Decision. Source: NRA forces, designation and public procure- Ministry: Once the postal sector is liberalised, the universal service provider will either be ment. Are other designated or determined after a public procurement process. The above does not exclude safeguarding meas- the possibility for market forces to take place in cities such as Athens, Thessaloniki and Indicator 11.2.3 VAT treatment of postal services ures present? Patra where there is a density in population and thus increased use and demand of postal Postal product Part of USO? VAT rate Legal basis services or even for certain high-in-demand postal services. Non-Universal Services No 23% Law No 2859/2000 “Code of Source: NRA, Ministry Value Added Tax” Universal Services pro- Yes 0% Law No 2859/2000 “Code of vided by the USP Value Added Tax” Indicator 11.2.6 Legal mechanisms to ensure quality of universal service Universal Services under Yes 23% Law No 2859/2000 “Code of Mechanism Yes/No Mechanism Yes/No Individual Licenses Value Added Tax” NRA sets monitoring standards? No NRA can fine USP(s)? No Source: NRA, Ministry Annual measurement of quality of service? Yes NRA can impose other remedies? Yes Annual publication of results on quality of service Yes Indicator 11.2.4 Services ensured as universal services under national law monitoring? Segment Defined as universal service by law? Are quality standards specified by law? Source: NRA

Basic letter post Yes Yes Indicator 11.2.7 Financing the net cost of universal service Bulk letters, (ad- Yes No dressed) Mechanism Yes/No Mechanism Yes/No Direct mail Yes No Reserved area Yes Who contributes to the compensation fund? N/A Periodicals Yes No (Incumbent, competitors, other entities) Non-priority letter s Yes No Compensation fund No Public procurement No Basic parcel post Yes No Size of compensation fund N/A Direct compensation from public funds No Bulk parcels Yes - (if present, in Euro) Source: NRA, USP Note: Direct compensation from public fu Source: NRA

nds includes subsidies and state aid.

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Indicator 11.2.8 Cost of universal service obligation and method for its calculation Indicator 11.2.9 Authorisation/licensing for services within and outside universal Question Answer service area What is the cost estimate of USO? (if NRA: About 7.1 million euros for 2008 (USP calculation) Services within universal ser- If yes, state services e.g. letter Remarks, experiences, available, in Euro) USP: About 29 million Euros for 2009 (USP calculation) vices post items, otherwise insert “No” problems encountered The 2009 financial statements have already been published but not taken into account in this report What licensing procedure is used? Designation. ELTA (Hellenic Post) has been (designation, general authorisation, designated as the sole USP. What is the name of calculation NRA: Activity Based Cost individual license) method? (if available) USP: Full Costing with ABC (Activated Based Costing) Which universal services are subject All except for postal items within re- to individual license? served area of USP Short description of calculation NRA: ABC method (if available) Which universal services are subject None to general authorisation? Is a thorough documentation of calcu- NRA: Documentation exists, but confidentiality issues apply lation method available? Where? USP: Yes (in Greek). The whole documentation is communicated to the Are authorisation requirements pub- Yes NRA lished (transparent)? Is calculation method approved by the NRA: New cost accounting system conditionally approved in 2010 Is the USP authorised under Art. 9*? - NRA? USP: Yes Services outside universal ser- Answer Remarks, experiences, Does NRA calculate USO cost? NRA: USP calculates the cost & NRA will audit it, when claimed vices problems encountered Source: NRA For which services is general authori- Article 1, par. 2.c., of Postal Law sation required? 2668/1998: Courier Services, The handling of unaddressed advertising items concerns advertising items enclosed in an envelope or other similar packing, without recipient address on them, Preparation of postal items, Document exchange For which services is an individual li- No cense required (ex ante approval)? Note: - means no information

Source:*) NRA Article 9 of Directive2008/6/EC

Indicator 11.2.10 Access to postal infrastructure ensured by Member States Access to: Yes/No Other conditions: Yes/No Post codes Yes Change of address database No Address database No USP return services No Post office boxes No Street letter boxes No Delivery boxes No Sorting centres No Other conditions: Yes/No Require downstream access to USP No Source: NRA

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Indicator 11.2.11 Involvement in competition cases since 2007 Indicator 11.3.2 Accounting requirements Case name Case status Postal product(s) Issue Question Answer Question Answer concerned Separation of accounts No. of up/down stream accounts None* N183/2003 EC Decision C(2003) 4084 /11.11.2003 not State Aid Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA 2001 to raise objection on state aid to ELTA No. of reserved product accounts NA Note: Decision taken 2006 Transparency Source: USP Unreserved product accounts required? NA Independent body reviews USP ac- Yes counts? No. of unreserved product accounts NA Last review of USP accounts NA 11.3. REGULATION OF PRICES AND ACCOUNTING Body reviewing USP accounts (Type of Accounting Application of tariff principles body) firm employed by USP Indicator 11.3.1 Method of price regulation Bulk services within USO? Yes NRA issues statement of compliance? No Does USP conclude individual agreements? Yes Last publish statement of compliance - Segment Method Remark Individual agreement: cost based price re- None Publish cost allocation system? No Basic letter post Ex ante quired Bulk letters Ex ante Individual agreement: NRA has cost data? Yes USP financial accounts audited? Yes Direct mail Ex ante USP has special tariffs? Yes Last published financial accounts 2009 Periodicals Ex ante Up- and downstream accounts? Yes Non-priority letter post Ex ante Note: - means no answers in questionnaire Basic parcel post Ex ante *: No other postal operators have up- or –dow Bulk parcels Ex ante Source: NRA Source:subsidiary. NRA However the cost accounting system supports this process.

Indicator 11.3.3 Cost accounting system of the USP Question nstream access to USPAnswer netw What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) /Fully Attributed Cost ork, apart from ELTA’s Is the cost accounting system approved by the National Regulatory Authority? Yes Assessment of the system (pros and cons)

Note: - means no answers in questionnaire Source: NRA, USP

Indicator 11.3.4 Promoting access to and affordability of postal services Question Yes/No If yes, how? Non-discriminatory prices (Art. 12*) required? Yes Law No 2668/1998 (Gov. Gaz. 282/A/1998), Art. 17. Affordability (Art. 12*) defined in national law? Yes USP: Law 2668/1998 (article 4 and 17) Note: - *) Article 12 of Directive 2008/6/EC Source: NRA, USP

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11.4. ROLE OF NRA Indicator 11.4.3: NRA independence Question Yes/No Question Answer Can government guide NRA No Who, and under According to Law 3371/05 the President is ap- Indicator 11.4.1: NRA powers on policy? what conditions, pointed by the Council of Ministers, upon proposal Task or power Yes/No Task or power Yes/No can appoint NRA by the Infrastructure Transportation and Networks head? Minister, following the opinion of the Special Per- Require USP cost allocation system? Yes Levy fines? Yes manent Committee on Institutions and Transpar- Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- Yes ency of the Parliament ments? Some NRA decisions require Yes Who, and under Same as above Review cost allocation to non-USO? - Seek court order? Yes governmental support? what conditions, can dismiss NRA Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes head? Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Can government suspend Yes Minimum qualifi- Yes Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No NRA orders? cations for NRA heads Require downstream access? No Source: NRA Note: - means no answers in questionnaire *) Article 22 of Directive 2008/6/EC Source: NRA Indicator 11.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 11.4.2: NRA human and financial resources Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Question Answer To whom is NRA decision appealed? Court Number of NRA decisions reversed? - Size of budget? (€ thousands) - Note: - means no answers in questionnaire Source: NRA Number of total staff ? 169 (Of which, staff dealing with postal affairs) 12 Source of NRA budget Fees collected from postal & communications operators Indicator 11.4.5 Enforcement of competition rules by NRA and cooperation with Who approves NRA budget - NCA Note: - means no answers in questionnaire Question Yes/No Question Yes/No Source: NRA Who is the primary enforcer of competition rules? NRA NRA obliged to share info with NCA? Yes Note: ‘NCA’ national competition authority. Source: NRA

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Indicator 11.4.6 Regulation of user protection procedures and remedies 11.5. MARKET STRUCTURE AND COMPETITION Question Answer Question Answer User protection procedures in postal or con- Both USP(s) required to issue annual report Yes sumer law? Indicator 11.5.1 Information about the incumbent Question Answer Question Answer Enforcement by NRA or national consumer Both NRA issues annual report Yes protection authority (NCPA)? Name of incum- ELTA Hellenic Post S.A. Main activities ELTA provides postal services (clear- Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes bent ance,sorting,transport and distribution) of speci- Applies to non-USO services Yes Agency reviewing operator NRA fied quality at all points and affordable prices of up Remedies by competent national authority? - to 2 kilograms and up to 20 kilograms. It provides (maximum fee) also financial services.etc Note: - means no answers in questionnaire Legal status Limited liability com- Employment Source: NRA pany (Societe Ano- nyme) State ownership 90% state-owned & Source of fi- Reserved Area (nevertheless it has been foreseen Indicator 11.4.7 Main issues of discussion between NRA and USP (percent) 10% Hellenic Post Bank nancing in the Greek postal law a compensation fund that Issue Short description (in bullet points) has not been activated yet) NRA: Source: USP • New Cost accounting system of the USP • Measurement of quality (a’ priority mail) • Eventual preferential treatment towards a courier company which is a USP subsidiary Indicator 11.5.2 Incumbent profits, 2009, national currency USP: Statistic Value • Cost calculation model Total profit in 2009 €37 million loss • Cost accounting principles • Licensing (public consultation) Percentage of profit coming from letter mail €1.5 million profit • Public access to network (blocks of letter boxes) Percentage of profit coming from reserved area (if present) € 13.2 million loss • Exceptions of the normal frequency of delivery Note: - means no answers in questionnaire Source: NRA, USP Source: NRA

Indicator 11.4.8 NRA relations with customer associations Example of relation Short description (in bullet points) Meetings with Greek Consumer organizations (e.g., Aim to provide information for a series of issues such as: the General Association for Greek Consumers-INKA, • The way complaints are handled by EETT and the official the Consumers’ Association - The Quality of Life procedure to follow when filing a complaint. (EKPOIZO), the Center for the Protection of Con- • The jurisdiction of EETT over consumer issues. sumers – KEKPA, Union of Citizens-Eurozone) • The leaflets and the regulatory documents that EETT has as well as with public organizations such as the issued General Secretary for the Consumer and the Con- • The publication of comparative tables with the quality indi- sumer Ombudsman. cators of Electronic Communications services on the EETT website. Source: NRA

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Indicator 11.5.3 Mail market segmentation Indicator 11.5.7 Cross border mail Percentage opened to Subject to li- Main actors (if not re- Terminal dues regu- No. of signifi- competition cense / au- Names of significant Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Segment cant competi- thorisation? competitors Under na- tors - (will be available mid-May) Yes No Actual (Yes/No) tional law Source: NRA Addressed items Letters Reserved Low Yes 1 Elta (Hellenic Post) area, 50g Indicator 11.5.8 Presence and role of mail consolidators in the market Correspondence Question Answer Direct mail Are companies offering mail consolidation services present in the market? No Publications Reserved Low Yes 1 Elta (Hellenic Post) How large is the turnover of mail consolidators in relation to the postal market? area, 50g Have you handled any competition cases involving mail consolidator? Unaddressed items Intense Low Yes 3 Source: NRA Cross-border out- Reserved Low Yes 1 Elta (Hellenic Post) bound area, 50g Express Intense Intense Yes 5 Acs S.A., Tachimetafores Elta (Elta Courier), Gen- 11.6. STRUCTURE OF MARKET DEMAND eral Tachidormiki S.A.A., Speedex Courier S.A., Dhl Express (Hellas) Courier S.A. Indicator 11.6.1 Revenues and volumes generated by consumers vs. business Parcels Intense Intense Yes 5 Acs S.A., Tachimetafores customers in 2009, national currency, millions of items Elta (Elta Courier), Gen- ` Business customers Private consumers Approximate mar- eral Tachidormiki S.A.A., Speedex Courier S.A., Revenue Volume Revenue Volume ket share in the to- Ups Of Greece Inc. tal market Total Addressed items (domestic) 346 560 14 22 Source: NRA Letters 299 482 14 22 Indicator 11.5.4:Indicator 11.5.5: Correspondence 273 426 14 22 Reserved area 180 324 9.5 17 Indicator 11.5.6 New entrants since 2008 Direct mail 26 57 0 0 Segment No. of Approximate market End-to-end or Name Publications 47 78 0 0 entrants up/downstream competition? share Unaddressed items 1 8 0 0 Mail 69 (2008) End-to-end Cross-border mail outbound 42 36 5 4 84 (2009) Express 2 0.6 2.1 0.8 Express 0 Parcels 11 1.3 7.3 0.8 Logistics - Total 402 606 29 28 Financial - Source: USP Others - Source: NRA Indicator 11.6.2:

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Indicator 11.6.3 Revenues and volumes generated by consumers vs. business Indicator 11.6.5 Effect of the financial crisis on revenues in 2009 customers in 2008, national currency, millions of items Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Segment Business customers Private consumers Less than 5% 5-15% more than 15% Revenue Volume Revenue Volume Addressed items (domestic) - Addressed items (domestic) 346.3 569.7 14.2 22.6 Letters Increase Letters 296.7 487.5 14.2 22,6 Correspondence Increase Correspondence 269.8 429.1 14,2 22,6 Reserved area Increase Reserved area 178 326.1 9.4 17.2 Direct mail Decline Direct mail 26.9 58.4 0 0 Publications Decline Publications 49.6 82.2 0 0 Unaddressed items Decline Unaddressed items 2.4 40.6 0 0 Cross-border mail outbound Decline Cross-border mail outbound 43.4 37.4 4.8 4.2 Express Decline Express 2.3 0.92.3 0.9 Parcels Increase Parcels 10.2 1.36.8 0.9 Total Decline Total 404.5 649.928.1 28.4 Note: - means no information Note: - means no information Source: USP Source: USP

Indicator 11.6.4 Trends in mail substitution 11.7. PRICE PERFORMANCE: Short description (in bullet points) • “It does not appear that the emerging use of electronic alternatives have seriously affected the development Indicator 11.7.1 Public tariffs, 2004-2009 of letter post in the past: The penetration rates for internet and broadband access are fairly low (compared to other EU‐15 Member States)” ITA/WIK (2009b) Segment 2005 2007 2009 Note: - means no information Single item: 20g tariff letter 0.50 0.54 0.58 Source: ITA/WIK (2009) Single item: 100g priority mail 0.92 0.97 1.23 Single item: 500g insured and regis- 2.10+ 2.14+ 2.15+ tered R(1.75)/VA(1.90+0.30%) R(1.75)/VA(2+0.30%) R(1.85)/VA(2.20+0.30%) Single item: 1 kg parcel 2.90 3.00 3.30 Bulk mail: composed of 20g letters 0.41 0.42 0.46 Bulk mail: composed of 100g letters 0.83 0.84 1.02 Source: USP

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11.8. SOCIAL AND CONSUMERS ASPECTS Indicator 11.9.2 Statistics on technological progress Indicator Value in 2009 Increase/decline since 2007 Indicator 11.8.1 Employment indicators, 2009 Percentage of letter mail benefiting from auto- 75% Athens Sorting Center +30% USP mated processing (e.g. sorting) 70% +10% Employment (thousand), in full time equivalents 11.3 Percentage of parcels benefiting from automated - - Percentage of total country employment processing (e.g. sorting) Share of civil servants 84% (permanent employment) Source: USP Share of part time and temporary employment 16% (temporary employment) Number of outsourced and/or subcontracted workers in the deliv- 577 ery function in (monthly average for 2009) Indicator 11.9.3 Supply of e-commerce services, total market Question Answer - Incumbent Note: - means no information Source: USP Do you supply own e-commerce services? What kind? No Source: USP

Indicator 11.8.2 Wage and productivity indicators Indicator 11.9.4 Supply of hybrid mail services, total market Incumbent Question Answer - Incumbent Wages as a proportion of total costs 76% Do you supply hybrid mail or virtual delivery solutions? What kind? We offer hybrid mail with the primary pur- Average wage per hour (€) 13.53 euros pose of computer printouts and enveloping. Source: USP The service is a geographical breakdown of the 2 centers in Athens and Thessaloniki. If yes, how many years have you been supplying these services for? 2 years What share of turnover do you generate from hybrid mail and/or 0.1%-upward tendency 11.9. TECHNOLOGICAL DEVELOPMENTS virtual delivery solutions? What is the trend? Do you plan to develop (new) hybrid mail / virtual delivery solu- Yes tions? Indicator 11.9.1 Innovation, technology and new services Source: USP Service Do you Volume (mil- Do you plan Remarks offer? lion of items) to offer? Hybrid mail Yes 3 Hybrid mail can reduce corporate com- Indicator 11.9.5 Developments within networks and mail consolidation services munication costs and be more environ- Question Answer mentally friendly than traditional mail. Have you carried out a major reorganisation of your logistics network? For ex- In process Virtual delivery of mail No Yes ample, decentralising, implementing hub & spoke systems? Source: USP Pick up locations for No Not applicable parcels (parcel shops) Source: USP

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Indicator 11.9.6 The most important environmental initiatives implemented 11.10. QUALITY OF SERVICE DEVELOPMENTS Brief answer (in bullet points) ELTA have undertaken a lot of projects related to environmental protection. They include: • ELTA’s active participation in the PostEurop Greenhouse Gas Reduction Programme. The expected result of Indicator 11.10.1 Transit time for domestic priority mail, 2009 the programme is an average ten percent reduction of CO2 emissions within the next five years D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 • Development and implementation of “Hybrid Mail” which reduces the environmental burden, by substituting dard (% actual dard (% actual dard (% actual dard (% actual traditional forwarding of mail with electronic forwarding. The operation of two Automated Centres in Athens FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) and Thessaloniki reduces significantly the number and volume of letter mail transfer, with favourable conse- quences for the environment. 87% - - - 98% - - - • Implementation of fleet telematic monitoring, which significantly improves transport efficiency and optimises Note: - means no information the vehicle and fuel handling, thus enabling improved management of environmental impacts. • Renewal of the fleet with modern technology vehicles thus reducing CO2 emissions, which is further improved the first"D+1 business (% FSC)"day after refers posting. to the "D+2" percent refers of mail in the by eco-driving training of relevant ELTA employees Source: NRA • Development of the Free Parcel Post Service, for the receipt, transport and delivery of material and packages intended for recycling. This includes the establishment of an ink recycling programme implemented for customers through post office drop-off facilities. Indicator 11.10.2 Transit time for cross-border priority mail, 2007 • Installation of leading technology to facilite the rational handling of water resources and energy reduction at D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 to the second"fastest business standard day category"after posting. that Etc. is delivered on the new Automated Sorting Centre in Attica dard (% actual dard (% actual dard (% actual dard (% actual • Participation in the European Road Safety Charter FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Source: USP - - - - 85 (Varies) - - Note: - means no information Source: Ecorys (2008a)

Indicator 11.10.3 Quality of service indicators

Indicator Value

Percentage of lost mail

Number of postal outlets (post offices and agencies) and number of letter 1.598 boxes per 10.000 inhabitants. 9.754 The implementation of CEN standards. Yes Source: NRA

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12.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 12.1.1 Country facts Country facts Value Unit Year Population 10.0 Million 2010 Population growth -2.0 Percent 2000-2010

Population density 108 Pop. / km2 2010 Urbanisation rate 56.5 Percent 2008 GDP 149 PPS, billion 2009 GDP/capita 14,800 PPS 2009 Postal services to GDP ’99/09: 0.52%/0.68% Ratio 1998/2008

NRA National Media Communications Authority (Nemzeti Média és Hírközlési Hatóság, NMHH) NRA responsibilities? Authorisation, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US, approval of general terms & conditions of USP Incumbent Magyar Posta Zrt Main activities of incumbent Letter and parcel services, postal financial services, savings and insurance services, newspaper subscriptions, logistics services, retail activity Employment, incumbent 34 289 (2009, FTE) Chapter 12 HUNGARY Source of financing No subsidy from the state Box 12.1 – Country summary Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP The total volume of postal items in all sectors decreased by nearly 2 percent from 2007 to 2009 . Most addressed items segments declined by about 2-2.5 percent, although direct mail and publications fell by 13.8 percent. The express market grew nearly 50 percent. The parcels’ volume declined by over 20 percent. Hungary has not yet transposed Directive 2008/6. Hungary has an extended deadline for the transposition until 31 December 2012. The Hungarian postal markets are fully open in parcels, express, unaddressed items and publications. The presence of reserved area restricts competition mostly correspondence segment although potential competitors in the cross-border and direct mail segments would also be affected. The Hungarian NPO has a market share of 100% in correspondence, publications and cross border outbound mail, while they have 98% of the direct mail market. Only unaddressed items, express and parcels are competitive where the Hungarian NPO has 15-25% market share. Net cost of USO is estimated at 3.8 percent of Magyar Posta’s turnover of €0.6 billion (using net avoidable cost approach). Since 2007 Hungary has had one competition case related to postal service; The case is the Competition Authority vs. Magyar Posta Zrt and Magyar Lapterjesztő. The outcome is that Magyar Posta Zrt has been charged with striking an uncompetitive agreement in the publication delivery segment . The Hungarian NPO is VAT exempt on all USO products.

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Indicator 12.1.2 Volume of items delivered by segment in total market, millions 12.2. REGULATORY FRAMEWORK AND PRACTICES of items Segment 2005 2007 2009 Indicator 12.2.1 National regulatory framework Addressed items 765.5 787.1 767.4 Question Yes/No Name of law Year of enactment Letter 752.4 781.3 762,4 Is postal law en- Yes Act 101 of 2003 on the Post 2004 Correspondence 676.9 749,6 734,9 acted? Direct mail 75.5 31,7 27,5 Is Directive 2008/6 No 1 January 2013 Printed matter (in- 13.1 5.8 5,0 transposed? cluding publications) * Is there a law that defines… Unaddressed items** Unknown Unknown Unknown Scope of USO? Yes Act 101 of 2003 on the Post 2004 Cross-border outbound 18 14.6 14.1 Quality of USO? Yes Act 101 of 2003 on the Post; Government Decree 2004 Express 9.8 12.4 18.1 79/2004 (IV. 19.) on the provision of postal services Parcels*** 4.6 1.8 1.4 and their quality requirements Total 797.9 815.9 801 USO rates? Yes Act 101 of 2003 on the Post, Decree 85/2006. (XII. 2004, 2007, 1990 15.) of the Minister of Economy and Transport on Note: *)Printed matter: A postal item the highest administrative prices of inland reserved postal services*, Act 87 of 1990 on statement of or figure produced by printing or other procedures prices per or periodical). USP accounts? Yes Decree 17/2004. (IV. 28.) IHM on accounting separa- 2004 **)Unaddressed items are notwhich defined contains neither individual, no tion by universal and concession-holder postal service providers, and the detailed rules of costing ***)These figures contain only postal parcels while ot Reserved area? Yes Act 101 of 2003 on the Post 2004 items without any differentiation. Besides this ab Source: NRA Authorisation proce- Yes Act 101 of 2003 on the Post, Government Decree 2004 of multiplication (e.g., book, catalogue, newspa- dures? 68/2004 (IV. 15.) on the conditions of entry to the as postal service in Hungary.r personal type of text, picture market of postal service providers Indicator 12.1.3 Revenues from segments in total market, millions of Euro Universal service No Segment 2005 2007 2009 fund? her parcels data are partly included into express Mail 257.9 out308.1 some value-added parcels 312.4 we have no data. User protection? Yes Decree 14/2004. (IV. 24.) IHM on requirements for 2004 Express 58.6 112.4 158.9 the quality of postal services connected with protection of consumers and access of handicapped Logistics 23.1 29.9 27.0 persons to postal services Financial 164.3 182.3 197.3 Other special rights Yes Act 101 of 2003 on the Post (Data protection, privacy 2004 Others (which)? clause); Act 100 of 2003 on electronic communications (remedies for users), Decree 12/2004. (IV. 22.) Total 511.2 632.6 695.6 IHM on the obligations of postal market players to Source: NRA supply data to the communications authority and the rules of data management Market supervision Yes Decree 13/2004. (IV. 24.) IHM on the Communica- 2004 and quality monitor- tions Authority's market surveillance, quality en- ing forcement and inspection activity connected with postal service and postal intermediary activity Source: NRA

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Indicator 12.2.2 Regulation of services based on new technologies Indicator 12.2.6 Legal mechanisms to ensure quality of universal service Question Answer (in bullet points) Mechanism Yes/No Mechanism Yes/No Are you aware of the presence of services based on new technologies in No* NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes your market? For example, hybrid mail or virtual delivery networks? Annual measurement of quality of service? Yes NRA can impose other remedies? Yes Do you have plans to regulate such products? For example, confidentiality Yes, as it seems necessary. of hybrid mail? Annual publication of results on quality of service Yes monitoring? Note: *There are only electronically posted items. Source: NRA does not contain the most important criteria of hy Source:tronic NRA mail to the nearest place of the addressee. Indicator 12.2.7 Financing the net cost of universal service Mechanism Yes/No Mechanism Yes/No Currently, the mail communication chain in Hungary Indicator 12.2.3 VAT treatment of postal services Reserved area Yes Who contributes to the compensation fund? - (Incumbent, competitors, other entities) Postal product Part of USO? VAT rate Legal basis brid mail, namely electronic transmission of elec- Compensation fund No Public procurement No Any postal products except for UPS No 25 % Act 127 of 2007 on value added tax Size of compensation fund N/A Direct compensation from public funds No Products falling within the scope of UPS Yes/No* 0 % Act 127 of 2007 on value added tax under Act 101 of 2003 on postal services (if present, in Euro) *The VAT does not depend on that the UPS is subject of Note: - means no answers in questionnaire Source: NRA Source:provided NRA, NRA voluntarily on the basis of license). Indicator 12.2.8 Cost of universal service obligation and method for calculation Indicator 12.2.4 Services ensured as universal services under national law Question Answer Segment Defined as universal service by law? USO (universalAre quality service standards obligation) specified or not by (i.e. law? is What is the cost estimate of NRA: It has not estimated by the NRA yet. USO? (if available, in Euro) USP: 23,667,336 EUR Basic letter post Yes Yes What is the name of calcula- NRA: ABC, FDC, HC Bulk letters Yes Yes tion method? (if available) USP: Net avoided cost (NAC) Direct mail Yes Yes Short description of calcula- NRA: N/A Periodicals Yes Yes tion method (if available) USP: The Net Avoided Cost (NAC) method measures the difference between the USP profits associated with the provision of the USO with the profits without the Non-priority letter s Yes Yes provision of the USO under a monopoly. This method measures the unprofitable Basic parcel post Yes Yes services that the USP has to provide under the USO. It measures the costs that Bulk parcels Yes Yes could be avoided or saved without the continued provision of the USO for a mo- Source: NRA, USP nopoly provider. Is a thorough documentation NRA: Decree no. 17/2004. (IV.28.) IHM on accounting separation by universal and of calculation method avail- concession-holder postal service providers, and the detailed rules of costing Indicator 12.2.5 Mechanisms to ensure provision of universal service able? Where? USP: Frontier Economics International Consultancy Question Answer Is calculation method ap- Yes proved by the NRA? Describe the role played by the three mechanisms: market Designation is the mechanism for ensuring the Does NRA calculate USO cost? NRA: No forces, designation and public procurement. Are other safe- provision of universal service. guarding measures present? The USP and the NRA have answered differently on some questions Source: NRA, Ministry Source: NRA, USP

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Indicator 12.2.9 Authorisation/licensing for services within and outside universal Indicator 12.2.10 Access to postal infrastructure ensured by Member States service area Access to: Yes/No Other conditions: Yes/No Services within universal ser- If yes, state services e.g. letter Remarks, experiences, Post codes Yes Change of address database No vices post items, otherwise insert “No” problems encountered Address database No USP return services No What licensing procedure is used? - Post office boxes Yes Street letter boxes No (designation, general authorisation, Delivery boxes Yes Sorting centres No individual license)

Which universal services are subject Basic letter post, Bulk letters, Direct Other conditions: Yes/No to individual license? mail, Periodicals, Non-priority letter Require downstream access to USP Yes post, Basic parcel post, Bulk parcels Source: NRA Which universal services are subject None to general authorisation? Are authorisation requirements pub- Yes Indicator 12.2.11 Involvement in competition cases since 2007 lished (transparent)? Case name Case status Postal product(s) Issue Is the USP authorised under Art. 9*? Yes The USP for USO is designated concerned by the Postal Act. Competition Authority vs. Final, but re-opened for Newspaper/periodical Anti Competitive Agreement Services outside universal ser- Answer Remarks, experiences, Magyar Posta Zrt and Supreme Court supervi- delivery vices problems encountered Magyar Lapterjesztő sion Source: USP For which services is general authori- Express, Courier, Integrated post** General authorisation for these sation required? services of the USP for USO also required. 12.3. REGULATION OF PRICES AND ACCOUNTING For which services is an individual li- No cense required (ex ante approval)? Note: - means no answers in questionnaire Indicator 12.3.1 Method of price regulation Segment Method Remark *Article 9 of Directive2008/6/EC **Integrated post: A type of postal service wher Basic letter post Ex ante For items in reserved or licensed area also by the sender and, in the absence of an oppo Bulk letters Ex ante For items in reserved or licensed area livery is supplemented by at least one of the following Direct mail Ex ante For items in reserved or licensed area and in accordance with his choice Periodicals Ex post For all items in this service category guaranteed delivery time service; Non-priority letter post Ex ante For items in reserved or licensed area eby the management of the postal item traceable Basic parcel post Ex post For all items in this service category Source:the NRA addressee; verification of site instruction by the addressee, its personal de- Bulk parcels Ex post For all items in this service category : receipt of the postal item in a place designated by the sender; Source: NRA delivery of the item special to a new postal addr services if the user so requires delivery; personalised service.

ess in the event of a change in

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Indicator 12.3.2 Accounting requirements Indicator 12.3.4 Promoting access to and affordability of postal services Question Answer Question Answer Question Yes/N If yes, how? Separation of accounts No. of up/down stream accounts N/A o Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - Non- Yes ’(1) When developing the fees of universal postal services, the following requirements discrimina- shall be taken into account: No. of reserved product accounts 4 Transparency tory prices a) fees shall be based on the costs of providing the service, Unreserved product accounts required? Yes Independent body reviews USP accounts? Not (Art. 12) re- b) pricing shall be transparent, fees shall be non-discriminative and affordable by the us- fully quired? ers; c) fees may not contain any premium or discount arising from market position contrary to No. of unreserved product accounts 3 Last review of USP accounts 2008 competition and may not prefer certain users against other users using the same services Application of tariff principles Body reviewing USP accounts (Type of body) NRA under the same conditions. d) the fees for reserved postal services shall be subject to official pricing (with the excep- Bulk services within USO? Yes NRA issues statement of compliance? No tion of the fees for services related to cross-border postal items); Does USP conclude individual agreements? Yes Last publish statement of compliance N/A e) the postal service provider shall specify the fees and the conditions of their application Individual agreement: cost based price required None Publish cost allocation system? No in its tariffs and this shall be made accessible to all at the place of acceptance, furthermore, the tariffs of services regularly used by the public shall be displayed at the postal Individual agreement: NRA has cost data? No USP financial accounts audited? Yes service locations; USP has special tariffs? Yes Last published financial accounts 2008 (2) With the exception of the fees for services related to cross-border postal items, the Up- and downstream accounts? No fees for reserved postal services [Article 7 (1)] shall be subject to official pricing pursuant to the act on pricing. Note: - means no answers in questionnaire (3) The postal service provider shall specify the fees and the conditions of their applica- Source: NRA tion in its tariffs and this shall be made accessible to all at the place of acceptance, furthermore, the tariffs of services regularly used by the public shall be displayed at the postal service locations. Indicator 12.3.3 Cost accounting system of the USP (4) The postal service provider may also agree on an individual fee with the user different from the tariff according to paragraph (3). The requirements according to paragraph (1) Question Answer shall be met also in this case. (5) The conditions of applying individual fees shall be disclosed in the rules of business of What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) the postal service provider. Is the cost accounting system approved by the National Regulatory Authority? Yes Affordability Yes According to Point 4 Paragraph 3 of Act 101 of 2003 on postal services UPS are to provide (Art. 12) de- equally to anyone. (Universal postal service: A specific range of postal services qualified Assessment of the system (pros and cons) fined in na- as services in the public interest available to all users at a specified quality against an af- - tional law? fordable price irrespective of geographical location.) Government Decree 79/2004 (IV. 19.) on the provision of postal services and their quality Note: - means no answers in questionnaire requirements (geographical availability, accessibility in time) Source: NRA, USP Source: NRA, Ministry

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12.4. ROLE OF NRA Indicator 12.4.3: NRA independence Question Yes/No Question Answer Indicator 12.4.1: NRA powers Does the government have a No Who, and under what condi- Prime Minister, on at least 5 formal right to guide NRA on tions, can appoint NRA head? years experience Task or power Yes/No Task or power Yes/No policies? Require USP cost allocation system? Yes Levy fines? Yes Some NRA decisions require gov- No Who, and under what condi- Prime Minister, if the NRA head Approve USP cost allocation system? Yes Fines since 1.1.2006 regarding data requirements? ernmental support? tions, can dismiss NRA head? do not carry out his/her duty for Yes chargeable reasons. Review cost allocation to non-USO? Yes Seek court order? No Can government suspend NRA No Minimum qualifications for NRA Yes Require data from USP (Art. 22*)? Yes Cancel unlawful rates? No orders? heads Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Source: NRA Require data studies? Yes Court orders sought since 1.1.2006 regarding data? Yes Require downstream access? Yes Indicator 12.4.4 Complaint handling – appeal from NRA decisions Note: - means no information Question Answer Question Answer *Under Article 22 of Directive 2008/6/EC Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Source: NRA To whom is NRA decision appealed? Court Number of NRA decisions reversed? 2 Source: NRA Indicator 12.4.2: NRA human and financial resources

Question Answer Size of budget? (€ thousands) 24 081,7 million HUF actual total costs of the Authority. From that the cost of the Indicator 12.4.5 Enforcement of competition rules by NRA and cooperation with postal activities is equal to 507,9 million HUF (200,6 million HUF direct costs + NCA 307,3 million HUF indirect costs).* Question Yes/No Question Yes/No Number of total staff ? Actual number of total staff = 399 (However budget or planned was = 460). Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes (Of which, staff dealing with 10** postal affairs) Note: ‘NCA’ national competition authority. Source of NRA budget Certain percentage of the frequency duties specified in the Budget Act, the fees Source: NRA charged for the reservation and use of identifiers and for official proceedings, and the supervision fees. In respect of postal services fees are collected from the national USP and from other US and non-US postal operators. Indicator 12.4.6 Regulation of user protection procedures and remedies Who approves NRA budget Parliament Question Answer Question Answer Note: * The NRA is responsible for electronic co User protection procedures in Both USP(s) required to issue annual report Yes postal or consumer law? vices. The budget for postal services based on estimated staff number (15 persons). Enforcement by NRA or national Both NRA issues annual report Yes Source:**Estimated NRA data that includes also consumer protection authority? Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes mmunications, frequency management and postal ser- Applies to non-USO services Yes Agency reviewing operator NRA Remedies by competent national 0.5% of the net reve- supply services, management, e .t .c. authority? (maximum fine) nue, or 10 million HUF in the absence of data Source: NRA

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Indicator 12.4.7 Main issues of discussion between NRA and USP Indicator 12.5.3 Mail market segmentation, 2009, Issue (Short description in bullet points) Percentage opened to Subject to li- competition • Interpretation of the postal legislation, initiatives to modify it cense / au- No. of sig- Under na- thorisation? nificant- Names of significant • Approval of Magyar Posta’s General Terms and Conditions Actual • Issues linked to the market monitoring responsibility of the NRA Segment tional law (Yes/No) competitors competitors • Data provision of Magyar Posta (QoS, network parameters, territorial availability, cost and revenues, Addressed items Low Low Yes 0 volumes, employment) Letters Low Low Yes 0 • Continuous negotiations concerning the improvement of QoS Correspon- Low Low Yes 0 Source: NRA, USP dence Indicator 12.4.8: Direct mail Substantial Low Yes 0 Publications Intense Low Yes 0

Unaddressed items Intense Intense No Unknown 12.5. MARKET STRUCTURE AND COMPETITION Cross-border out- Moderate Moderate Yes 4 65 Kft, UPS, FedEx, TNT bound** Express

Express and Parcels Intense Intense Yes 6 GLS, Magyar Posta, DHL, Indicator 12.5.1:Information about the incumbent outside USO DPD, Trans-o-flex, TNT Question Answer Question Answer Innight Parcels within Intense Low Yes 0 Name of in- Magyar Posta Zrt. Main activities Letter and parcel services, postal financial services, USO*** cumbent savings and insurance services, newspaper subscrip- Total Low* Low* N/A 19 tions, logistics services, retail activity Note: *) Total data is counted without unaddressed it Legal status Company Limited Employment 34 289 (2009, FTE) State owner- 100% Source of financing No subsidy from the state gary and there are not data about it.. ship (percent) **) Cross-border outbound data contains also Source: USP ***) Data only contain domestic postal parcels (Falli in the express category. Source: NRA ems data, because it is not a postal service in Hun- Indicator 12.5.2 Incumbent profits, 2009, national currency Statistic Value Indicator 12.5.4 Sum of market shares of 3data main of outbound competitors express and (excl. parcels. incumbent)in Profit before tax (EBIT) in 2009 7,317 mHUF 2009 by revenue ng in the USO area), other parcels are included in 2008 8,887 mHUF Segment Approximate sum of market shares of 3 main competitors Percentage of profit coming from letter mail* 2009: 74%; 2008: 79% Letter post (open area) 0 Percentage of profit coming from reserved area (if present)* 2009: 13%; 2008: 42% Parcels 0 Note: *profit calculation includes profitable and unprof Express 38 % Unaddressed items Unknown Source:tion USP data. Source: NRA

itable services as well, this may influence propor-

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Indicator 12.5.5 Mergers and acquisitions of incumbent since 2007 12.6. STRUCTURE OF MARKET DEMAND Name of acquired Main activities of the ac- Main objectives behind the Date company quired company acquisition 9 Sept 2006 Posta Kézbesítő Ltd. Distribution, delivery Subcontractor Indicator 12.6.1 Revenues and volumes generated by consumers vs. business Note: - means no information customers in 2009, national currency mHUF, millions of items Source: NRA Segment Business custom- Private consumers Approximate mar- ers ket share in the to-

Revenue Volume Revenue Volume tal market Indicator 12.5.6 New entrants since 2008 Addressed items (domestic) including D No. of Approximate End-to-end or up/downstream and E 60,749 847 18,298 254 98% Segment entrants market share competition? Name Letters,(D),including,B,and,C, 60,249 842 18,298 254 100% Mail 0 N/A Correspondence,(B),including,A,and,F 58,898 818 18,298 254 100% Express 59 Estimated 20 % End-to-end TNT in-night, Tran- Reserved,area,(A) 32,671 616 4,609 87 100% o-flex and others Direct,mail,(C) 1,351 24 0.003 0.00006 98% Logistics 0 N/A Publications,(E) 500 5 0.8 0.009 100% Financial 0 N/A Unaddressed items 1,481 717 117 57 25% Others 0 N/A Cross-border mail outbound (F) 1,910 3 4,677 9 100% Source: NRA Courier, Express 229 0,2 157 0.1 15% Parcels 4,019 7 3,091 5 15% Indicator 12.5.7 Cross border mail Others 67,728 582 40,366 349 Total 134,207 2,153 62,031 663 Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Note: - means no answers in questionnaire Source: USP 13 million items per year Yes, up to 50 g. N/A No Source: NRA Indicator

Indicator 12.5.8 Presence and role of mail consolidators in the market Question Answer Are companies offering mail consolidation services present in the market? Yes How large is the turnover of mail consolidators in relation to the postal market? Unknown (probably low) Have you handled any competition cases involving mail consolidator? No Source: NRA

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Indicator 12.6.2 Revenues and volumes generated by consumers vs. business Indicator 12.6.4 Effect of the financial crisis on revenues in 2009 customers in 2008, national currency mHUF, millions of items Segment Estimate of the effect of the financial crisis on revenues Segment Business customers Private consumers (please write ‘decline’ or ‘increase’ below, where relevant) Revenue Volume Revenue Volume Less than 5% 5-15% more than 15% Addressed items (domestic) including D 59,877 896 19,364 290 Addressed items (domestic) decline and E Letters Letters,(D),including,B,and,C 59,509 893 19,334 289 Correspondence decline Correspondence,(B),including,A,and,F 58,077 869 19 334 289 Reserved area decline Reserved,area,(A) 32,314 670 6 947 144 Direct mail decline Direct,mail,(C) 1,432 24 0,8 0,01 Printed matter decline Publications,(E) 368 3 30 0,3 Unaddressed items decline Unaddressed items 1,589 727 106 48 Cross-border mail outbound increase Cross-border mail outbound (F) 1,830 3 4,429 10 Express decline Courier, Express 321 0.2 234 0.1 Parcels decline Parcels 4,077 83,296 6 Others 68,329 59639,715 346 Magyar Posta Total increase Total 134,194 2,228 62,716 691 Note: Please note that further to th Note: - means no answers in questionnaire Source: USP and 2009 fact figures, please be aware that this Source:of USP the financial crisis, trends can be the is indicator we compared 2009 plans made before the financial crises Indicator 12.6.3 Trends in mail substitution 12.7. PRICE PERFORMANCE: Short description (in bullet points) methodology does not necessarily shows the results • So far, emerging electronic alternatives have not substantially affected letter post volume; this may change results of normal business cycles as well in the coming years as the penetration rates for internet and broadband are increasing in Hungary Indicator 12.7.1 Public tariffs, 2004-2009 Source: USP Segment 2005 2007 2009 Single item: 20g tariff letter 48 62 75 Single item: 100g priority mail 160 170 185 Single item: 500g insured and registered 260 300 330 Single item: 1 kg parcel 600 830 930 Bulk mail: composed of 20g letters - 59** 66** Bulk mail: composed of 100g letters - 102** 115** Note: - means no answers in questionnaire *) 30 g tariffs **) Please note that these pric

Source:based USP on quantity, place of postage and level of presortment.

es concern postage at post office

s at 2000 pieces. Prices can differ

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12.8. SOCIAL AND CONSUMERS ASPECTS Indicator 12.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007 Indicator 12.8.1 Employment indicators, 2009 Percentage of letter mail benefiting from automated processing (e.g. sorting) 75 % - USP Percentage of parcels benefiting from automated processing (e.g. sorting) 69 % - Employment (thousand), in full time equivalents 34 Note: Percentage values mean the proportion of lette Percentage of total country employment Share of civil servants 0% Source:automated USP processing Share of part time and temporary employment ~13%

Number of outsourced and/or subcontracted workers in the delivery function in 0 (monthly average for 2009) Indicator 12.9.3 Supply of e-commerce services, total market rs and parcels which undergo at least one phase of Note: - means no information Question Answer - Incumbent Source: USP, UNI Europa Do you supply own e-commerce services? What kind? Stamps, personalized stamps, prepaid mailing ac- cessories (envelopes, etc.), postcards, etc.

What share of turnover do you generate from own e- HUF 11,000,000 (= ∼ EUR 40,000), Trend: increas- Indicator 12.8.2 Wage and productivity indicators commerce services? What is the trend? ing Incumbent What own e-commerce services do you plan to develop? -

Wages as a proportion of total costs 36.69% Are you able to indicate how the percentage of your turnover - Total HR costs as a proportion of total costs 55.36% that originates from or is related to third-party e-commerce Average wage per hour (€) 931 HUF/FTE transactions (e.g. purchases on the internet) Source: USP Note: - means no answers in questionnaire Source: USP

12.9. TECHNOLOGICAL DEVELOPMENTS Indicator 12.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent Indicator 12.9.1 Innovation, technology and new services Do you supply hybrid mail or virtual delivery solutions? What kind? Hybrid mail Service Do you offer? Volume Do you plan to Remarks If yes, how many years have you been supplying these services for? 10 offer? (Yes/No) (million of What share of turnover do you generate from hybrid mail and/or virtual delivery Positive tendency items) (Yes/No) solutions? What is the trend? Hybrid mail Yes 60 Further projects to de- Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes, improve this service velop this service Note: - means no answers in questionnaire Virtual delivery of mail No N/A Yes Source: USP

Pick up locations for parcels - Not applicable Yes (parcel shops) Note: - means no answers in questionnaire Source: USP

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Indicator 12.9.5 Developments within networks and mail consolidation services Indicator 12.10.2 Transit time for EU cross-border outbound priority mail, 2009 Question Answer D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+5 stan- D+5 Have you carried out a major reorganisation of your logistics net- Mobile Post Offices, Post Partner Pro- dard (% actual dard (% actual dard (% actual dard (% actual work? For example, decentralising, implementing hub & spoke sys- gramme, National Logistic Centre no 2. (pro- FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) tems? ject is running) No require- N/A No require- N/A 85 94 97 98,9 Do you use different networks for letters and parcels at collection, We use the same logistic network for both. ment ment sorting, transportation or delivery levels? What are the reasons? (Sorting and transportation is centralised for economic reasons.) Source: USP What is the relative importance of road, rail and air as modes of 100 % road transport for years Relatively transportation for mail? Have these shares changed recently? Why? small territory, economic background.) Source: USP Indicator 12.10.3 Quality of service indicators Indicator Value Indicator 12.9.6 The most important environmental initiatives implemented Percentage of lost mail 0,0364 thousands Number of postal outlets (post offices and agencies) and number of 2,7 outlets per 10.000 inhabitants, Brief answer (in bullet points) letter boxes per 10.000 inhabitants. 8,9 letter boxes per 10.000 inhabitants • Defined Environmental Policy at corporate level The implementation of CEN standards. Yes • Our commitment: to reduce CO2 emission by 10% to 2013, compared to 2008 figures Source: NRA • Efforts to reduce our carbon footprint: • Modernisation of buildings (concept of eco-post), heating, • Utilization of renewable energy resources (sun collector based water heating system at the National Logistic Centre) • New vehicles (65% from 2004-2008), alternative vehicles • Introduction of Environmental Management System at 6 premises according to ISO 14001:2004 standards • Modern waste management (selective waste collection, recycling) • Internal communication/trainings to raise environmental awareness (Sustainability Reports, intranet, eco- driving trainings) - Regular participation in environmental forums, membership in related organizations Source: USP

12.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 12.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 standard D+2 D+3 stan- D+3 D+4 standard D+4 dard (% actual (% FSC) actual dard (% actual (% FSC) actual FSC) (% FSC) (% FSC) FSC) (% FSC) (% FSC) 85 93.05 No requirement N/A 97 99.70 No requirement N/A Source: NRA

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13.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 13.1.1 Country facts Country facts Value Unit Year Population 4.5 Million 2010 Population growth 17.9 Percent 2000-2010

Population density 63 Pop. / km2 2010 Urbanisation rate 61.3 Percent 2008 GDP 134.8 PPS, billion 2009 GDP/capita 30,200 PPS 2009 Postal services to GDP ’99/09: 0.57%/0.46% Ratio 1998/2008

NRA Commission for Communication Regulation (ComReg) NRA responsibilities? Authorisation, US rates, Special tariffs, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US Incumbent An Post Main activities of incumbent Postal and retail (Subsidiaries: Lottery, high volume printing, database services, computer software services etc.) Employment, incumbent 10,495 (2009 FTEs representing permanent, part time, temporary and casual staff. The figure excludes postmasters on contract and staff serving in subsidiaries). RELAND Source of financing Reserved area as defined in European Communities (Postal Services) Regulations Chapter 13 I 2002 and funds internally generated by the company. Source: ITA/WIK (2009) Country fiche, Eurostat, USP, NRA

Box 13.1 – Country summary Indicator 13.1.2 Volume of items delivered by segment in total market, millions The total volume of postal items in all segments fell by nearly 10 percent from 2007 to 2009. of items The 4.4 percent drop in addressed items was driven by a 2.7 percent drop in letter post, 5.6 Segment 2005 2007 2009 percent drop in publications, and a 35.9 percent drop in direct mail. The volume of unad- Addressed items 653 768 734 dressed items dropped by 26 percent. Letter 593 711 692 Ireland is obliged to transpose the directive 2008/6/EC before the 1.1.2011 deadline, but has not done so as of October/November 2010 although transposition is expected by the end of Correspondence - - - the year. Direct mail 45 39 25 Due to the presence of reserved area, the NRA estimates that 40 percent of the addressed Publications 15 18 17 items segments are closed for competition. On the other hand, unaddressed items, cross- Unaddressed items 102 145 107 border outbound, express and parcels are all fully open. Cross-border outbound 89 71 52 Actual competition is very weak in addressed items, although competition exists in unad- Express * * * dressed items, express and parcels segments. There is no evidence of net costs of the USO, according to the NRA. Parcels * * * Ireland has had no competition cases related to the postal services since 2007. Total 844 984 893 One potential legal barrier is the lack of a formal postal code system (the system in use today Note: - means no answers in questionnaire ; would not be available for competitors). Source: USP The Irish NPO is VAT exempted on all USO products.

* means commercially sensitive information

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Indicator 13.1.3 Revenues from segments in total market, millions of Euro Indicator 13.2.2 Regulation of services based on new technologies Segment 2005 2007 2009 Question Answer Mail 544 646 581 Are you aware of the presence of services based on new technologies in your market? For No Express * * * example, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? For example, confidentiality of hybrid mail? Not specifically Logistics * * * Financial 5 18 13 Source: NRA Others 204 212 210 Total 753 876 804 Indicator 13.2.3 VAT treatment of postal services Note: * included under mail Postal product Part of USO? VAT rate Legal basis USO products provided by An Post (universal service provider) Yes Exempt Finance Act 2010 Most of the income derived from retail activity has All other products No 21% Finance Act 2010 This is as a result of different approach to turnov Source: NRA list income derived from the following sources: do

remittance and related services, Other Services Other European Countries’. Reve Indicator 13.2.4 Services ensured as universal services under national law and related services ) were as follow: been included under ‘others’ in the above. Segment Defined as universal service by law? Are quality standards specified by law? 2005: € 135,963,000 er analysis in An Post’s Annual Reports. These 2007: € 154,321,000 Basic letter post Yes Yes mestic services ( Postage, Post offices: Agency, 2009: € 163,950,000 nues for alland retail Interest activity income) (i.e and ‘United Kingdom and Bulk letters Yes No Source: USP Direct mail Yes No Periodicals NRA: No No 13.2. REGULATORY FRAMEWORK AND PRACTICES . Post offices: Agency, remittance USP: Yes* Non-priority letter s Not Applicable Not Applicable Basic parcel post Yes No Indicator 13.2.1 National regulatory framework Bulk parcels No NRA: - Question Yes/No Name of law Year of enactment Remarks USP: No Is postal law enacted? Yes - 1983 Note: - means no answers in questionnaire Is Directive 2008/6 transposed? No - 2010 – Second half Is there a law that defines… *) Periodicals which are posted in items. Scope of USO? Yes - 2006 Source: NRA, USP Quality of USO? Yes - 2004 USO rates? Yes - 2002 Indicator 13.2.5 Mechanisms to dividuallyensure provisionfall within the of scope universal of the USO service but not bulk mailed Yes - 2006 Original version USP accounts? 2001 Question Answer Reserved area? Yes - 2003 Describe the role played by the three mechanisms: market Currently An Post designated as USP , Reserved area Authorisation procedures? Yes - 2003 forces, designation and public procurement. Are other de facto restricts other provision. safeguarding measures present? Universal service fund? No - Source: NRA User protection? Yes - 2008

Note: - means no answers in questionnaire Source: NRA

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Indicator 13.2.6 Legal mechanisms to ensure quality of universal service Indicator 13.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? No Services within universal services If yes, state services e.g. letter post items, otherwise insert “No” Annual measurement of quality of service? Yes NRA can impose other remedies? Yes Annual publication of results on quality of service Yes What licensing procedure is used? Designation – universal service provider monitoring? General authorisation - others Source: NRA Which universal services are subject to individual license? None Which universal services are subject to general authorisation? all Are authorisation requirements published (transparent)? Yes Indicator 13.2.7 Financing the net cost of universal service Is the USP authorised under Art. 9*? No Mechanism Yes/No Mechanism Yes/No Services outside universal services Answer Remarks, experiences, Reserved area Yes Who contributes to the compensation fund? N/A problems encountered (Incumbent, competitors, other entities) For which services is general authorisation required? All, subject to a de minimis Problems in enforcing de Compensation fund No Public procurement No limit (€500,000 pa) minimis limit Size of compensation fund N/A Direct compensation from public funds No For which services is an individual license required No (if present, in Euro) (ex ante approval)? Source: NRA Note: *) Article 9 of Directive2008/6/EC Source: NRA Indicator 13.2.8 Cost of universal service obligation and method for its calculation Indicator 13.2.10 Access to postal infrastructure ensured by Member States Question Answer Access to: Yes/No Other conditions: Yes/No What is the cost estimate of USO? (if NRA: There is no evidence that there is any net cost available, in Euro) USP: Confidential Post codes No Change of address database No What is the name of calculation USP: Static NAC approach (i.e. second round effects ignored). Address database No USP return services No method? (if available) Post office boxes No Street letter boxes No Short description of calculation USP: Estimation of NAC in two ways (under two scenarios):* Delivery boxes Yes Sorting centres Yes* method (if available) 1. Discontinuing deliveries to groups of unprofitable delivery routes Other conditions: Yes/No 2. Discontinuing individual unprofitable postal services or products Require downstream access to USP No Is a thorough documentation of calcu- USP: Confidential lation method available? Where? Note: *) ComRec direction 07/06 = unconditional access Is calculation method approved by the NRA: No. NRA will decide method in accordance with law. NRA? USP: No. Discussions have not yet taken place. Source:regional NRA hubs Does NRA calculate USO cost? NRA: Not to date. Note: The two scenarios reflect diffe Indicator 13.2.11 Involvement in competition cases since 2007 Case name Case status Postal product(s) concernedto all bulkIssue mailers to 43 access points including 4 Source:provision USP, NRA of USO were no longer mandatory. There have been no cases since 2007. Source: USP rent assumptions about wh

ich activities would be

discontinued if the

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13.3. REGULATION OF PRICES AND ACCOUNTING Indicator 13.3.3 Cost accounting system of the USP Question Answer Indicator 13.3.1 Method of price regulation What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC Is the cost accounting system approved by the National Regulatory Authority? USP: Subject to an independent Segment Method Remark audit (KPMG) Basic letter post Ex ante reserved area Otherwise ex post NRA: No – NRA has been unable Bulk letters Ex ante reserved area Otherwise ex post to confirm compliance with accounting direction. Direct mail Ex ante reserved area Otherwise ex post Assessment of the system (pros and cons) Periodicals Outside the scope of regulation Non-priority letter post Not provided Problems in accurately attributing revenue to products / services, determining quantities handled, and identifying costs to products / services Basic parcel post Ex post Note: FAC = fully allocated cost accounting Bulk parcels Not provided Source: USP, NRA Source: NRA

Indicator 13.3.4 Promoting access to and affordability of postal services Indicator 13.3.2 Accounting requirements Question Yes/No If yes, how? Question Answer Question Answer Non-discriminatory prices (Art. 12) required? Yes - Separation of accounts No. of up/down stream accounts 66 Affordability (Art. 12) defined in national law? Yes On case by case basis following public consultation Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA 2009 Note: - means no answers in questionnaire No. of reserved product accounts 32 Transparency *) Article 12 of Directive 2008/6/EC Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Source: NRA No. of unreserved product accounts 66 Last review of USP accounts 2008 Application of tariff principles Body reviewing USP accounts (Type of body, Firm em- 13.4. ROLE OF NRA e.g. NRA, USP) ployed by To bulk services within USO? Yes USP Does USP conclude individual agreements? No NRA issues statement of compliance? No Indicator 13.4.1: NRA powers Individual agreement: cost-based price required? N/A Last publish statement of compliance N/A Task or power (to) Yes/No Task or power (to) Yes/No Individual agreement: NRA has cost data? N/A Publish cost allocation system? No Require USP cost allocation system? Yes Levy fines? No USP has special tariffs? Yes USP financial accts audited? Yes Approve USP cost allocation system? Yes Fines since 1.1.2006 regarding data requirements? N/A To up- and downstream accounts? Yes Last published financial accounts 2009 Review cost allocation to non-USO? Yes Seek court order? Yes Source: NRA Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes Require data from non-USPs (Art. 22*)? No Set new rates for USP? No Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Require downstream access? No Note: *) Under Article 22 of Directive 2008/6/EC Source: NRA

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Indicator 13.4.2: NRA human and financial resources Indicator 13.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 1,310 User protection procedures in postal or con- Both USP(s) required to issue annual report Yes Number of total staff ? 120 sumer law? (Of which, staff dealing with postal affairs) 8 Enforcement by NRA or national consumer Both NRA issues annual report Yes protection authority? Source of NRA budget Fees collected from postal operators generally Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Who approves NRA budget ComReg is independent NRA Applies to non-USO services Yes Agency reviewing operator Ombudsman Source: NRA Remedies by competent national authority? None (maximum fine) Indicator 13.4.3: NRA independence Note: - means no information Source: NRA Question Yes/No Question Answer Can government guide NRA on policy? No Who, and under what conditions can ap- Minister point NRA head? Indicator 13.4.7 Main issues of discussion between NRA and USP Some NRA decisions require governmen- Yes Who and under what conditions can dis- Minister with tal support? miss NRA head? due cause Issue (Short description in bullet points) Can government suspend NRA orders? No Minimum qualifications for NRA heads? Yes USP: • Quality of Service for single piece domestic letters Source: NRA • Regulatory Accounts (implementation of one aspect of 2006 Direction which re-quire reconciliation of revenue data recorded at the point of sale with operational data recorded at the outward phase of the pipeline) • Business continuity plans for major service disruption Indicator 13.4.4 Complaint handling – appeal from NRA decisions • Disruptions to universal service caused by severe winter weather Question Answer Question Answer NRA: • Accuracy of accounts Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? No • Quality of Service To whom is NRA decision appealed? Court Number of NRA decisions reversed? N/A Source: NRA Source: NRA

Indicator 13.4.8: NRA relations with customer associations Indicator 13.4.5 Enforcement of competition rules by NRA and cooperation with Example of relation (Short description) NCA Consumer Advisory Panel, MOU with consumer bodies Question Yes/No Question Yes/No Source: NRA Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Note: ‘NCA’ national competition authority. Source: NRA

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13.5. MARKET STRUCTURE AND COMPETITION Indicator 13.5.4: Sum of market shares of 3 main competitors (excl. incumbent) Indicator 13.5.5 Mergers and acquisitions of incumbent since 2007 Indicator 13.5.1:Information about the incumbent Main activities of the Main objectives behind the Date Name of acquired company acquired company acquisition Question Answer Question Answer 1.5.07 Postbank joint venture with Fortis Provision of banking, insur- Synergies with retail Name of incum- An Post Main activities: Postal and retail (Subsidiaries: Lottery, high volume ance and retail services bent: printing, database services, computer software services) 3.12.09 Major stakeholding acquired in Gift Pre-paid giftcard company GVS has significant synergy Legal status: Public Lim- Employment: 10,495 (2009 FTEs representing permanent, part time, Voucher Shop (GVS) with the An Post brand and re- ited Com- temporary and casual staff. The figure excludes post- tail offering pany masters on contract and staff serving in subsidiaries) 01.3.10 Announcement that banking activities under Postbank project will be State ownership: 100% Source of financing Reserved area as defined in European Communities ceased from December 2010 (Postal Services) Regulations 2002 and funds internally Source: USP generated by the company Source: USP Indicator 13.5.6 New entrants since 2008 Indicator 13.5.2 Incumbent profits, 2009, national currency Segment No. of Approximate market End-to-end or Name en- share up/downstream com- Statistic Value trants petition? Total profit in 2009 € 5.7 No new entrants since 2008 Loss coming from letter mail €21.5 m Loss from reserved area (if present) €32.1m Source: USP Source: NRA

I Indicator 13.5.3 Mail market segmentation Indicator 13.5.7 Cross border mail Percentage opened to Subject to No. of sig- Main actors (if not re- Terminal dues regu- competition license / nificant Names of significant Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Segment Under na- authorisa- competi- competitors 52.5 million items per year Only inbound Yes Actual tional law tion? tors Source: USP Addressed items 60% c. 2% Yes None Letters Correspondence Indicator 13.5.9 Presence and role of mail consolidators in the market Direct mail Question Answer Publications Are companies offering mail consolidation services present in the market? Yes Unaddressed items 100% 60% (est) No 2 Door2Door, Leaflet Company How large is the turnover of mail consolidators in relation to the postal market? Very small Cross-border outbound 100% - Yes 2 DHL Global Mail, Spring Have you handled any competition cases involving mail consolidator? No Express and Parcels 100% 100% Yes 7 DHL, TNT, UPS, Fedex, Night- Source: NRA line, GLS, DPD Total Note: - means no answers in questionnaire Source: NRA

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13.6. STRUCTURE OF MARKET DEMAND Indicator 13.6.5 Effect of the financial crisis on revenues in 2009 Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant)

Indicator 13.6.1 Revenues and volumes generated by consumers vs. business customers in 2009, national currency, millions of items Indicator 13.6.2 Growth rate in revenues and volumes generated by consumers vs. business customers between 2008-2009 Source: USP Less than 5% 5-15% more than 15% Indicator 13.6.3 Revenues and volumes generated by consumers vs. business Addressed items (domestic) Decline customers in 2008, national currency, millions of items Letters Segment Business & Private consumers Correspondence Revenue Volume Reserved area Addressed items (domestic) 457 734 Direct mail Letters - - Publications Correspondence 430 692 Unaddressed items Decline Reserved area - - Cross-border mail outbound Decline Direct mail 14 25 Express Publications 13 17 Parcels Unaddressed items 9 107 Total Decline Cross-border mail outbound 73 52 Source: USP Express Confidential Confidential Parcels Confidential Confidential Total 539 893 13.7. PRICE PERFORMANCE: Note: - means no answers in questionnaire Indicator 13.7.1 Public tariffs, 2004-2009 Source:*) USP this includes registered lette Segment 2005 2007 2009

Single item: 20g tariff letter €0.48 €0.55* €0.55* Indicator 13.6.4 Trends in mailr itemssubstitution plus inbound cross border Single item: 100g priority mail €0.48 €0.55* €0.55* Short description (in bullet points) Single item: 500g insured and registered €5.35 €6.50 €6.75 • Emerging electronic alternatives to physical delivery have not substantially affected the development in let- Single item: 1 kg parcel (‘Economy’ in 06) €4.50 €6.25 €6.50 ter post volume. This may change in future” ITA/WIK (2009b) Bulk mail: composed of 20g letters €0.39 €0.41 €0.41 • On-line billing: efforts by public utilities to persuade customer to accept electronic bills by offering prize in- Bulk mail: composed of 100g letters €0.39 €0.41 €0.41 centives (e.g. electricity providers) • Discount for on-line payment: One insurance company offers a 5% discount Note: - means no information. • Discount for Direct Debit payments: Companies starting to charge premium for payment by post (e.g. one major cable TV company) * €0.54 if paid by meter machine or through a franking impression • On-line banking Source: Bulk mail price quoted is for the product Source: USP Inland Post Amendment (No 69) Scheme 2003: 48c and 9c discount in 2005 Inland Post Amendment (No 73) Scheme 2004: Registration fee of €5.35 for < 500g in 2005 Inland Post Amendment (No 74) Scheme 2006: 60c for >50g but <100g only wef 20 February 2006 Inland Post Amendment (No 77) Scheme 200 : Increase to €0.55 from 01.3.07 Source: USP “Deferred Processing – pre noon - +85% auto sort”

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13.8. SOCIAL AND CONSUMERS ASPECTS 13.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 13.8.1 Employment indicators, 2009 Indicator 13.9.1 Innovation, technology and new services USP Service Do you offer? Volume Do you plan to offer? Remarks Employment (thousand), in full time equivalents 10.5 Hybrid mail Yes (via An Confidential Hybrid services in Ireland are (limted service) Post’s Printpost “End- to-end” services. There Percentage of total country employment subsidiary) are no downstream hybrid Share of civil servants (=staff prior to 1984 when An Post set up) 25% products. Share of part time and temporary employment 20% http://www.printpost.ie/abo ut.html Number of outsourced and/or subcontracted workers in the delivery function in 38 workers (monthly average for 2009) Virtual delivery of No Under review by An http://www.pci.ie/ mail Post’s PCI subsidiary Note: - means no information Pick up locations for No Not applica- Under review Source: ITA/WIK (2009), Eurostat (2008), USP parcels, (parcel ble shops) Other examples (in- 1.Geocoordinates of all buildings in the State in cooperation http://www.geodirectory.ie/ Indicator 13.8.2 Wage and productivity indicators sert name) with the Government mapping service # 2. Provider of certificates to verify on-line digital identities http://www.post.trust.ie/Pag Incumbent (facilitates growth in E-Commerce) es/default.aspx Wages as a proportion of total costs 73% in 2008 3.Advance offline payment system - “Go and Pay” (cus- http://www.goandpay.ie/ Average wage per hour (€) € 21.82 in 2009 tomer can prepay for goods ordered online) Source: USP 4.Debit card product developed in association with Ryanair 5.Joint venture set up for MVNO (Mobile Virtual Network An Post launched an MVNO Operator) Services operation in collaboration with Vodafone in June 2010. Source: USP

Indicator 13.9.2 Statistics on technological progress Indicator Value in 2009 Increase/decline since 2007 Percentage of letter mail 84.5 % (For “P” format or standard size letter + 2.5 % (For “P” format or benefiting from automated items max 235mm x 162 mm) standard size letter items processing (e.g. sorting) max 235mm x 162mm) Percentage of parcels bene- 100 % (Not related to sorting activity per se but to 100 % fiting from automated proc- parcel handling on conveyor belt system within the essing (e.g. sorting) national distribution hub facility at Portlaoise) Source: USP

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Indicator 13.9.3 Supply of e-commerce services, total market Indicator 13.9.6 The most important environmental initiatives implemented Question Answer - Incumbent Brief answer (in bullet points) Do you supply own e-commerce services? What kind? Yes – see http://www.shoppingdirectory.ie/ • Guidelines issued to bulk customers on lowering the carbon footprint of their mailings and a “Movies by Mail” DVD rental service at • Provide all of the Company’s electricity needs from renewable sources from 2010 http://anpost.screenclick.com/1/AnPost/ • Divert 70% of office waste away from landfill sites and recycle What share of turnover do you generate from own e- Confidential • Obtain a BER (Building Energy Rating) certificate for all the Company’s larger buildings commerce services? What is the trend? • Make savings on utility and fuel costs (electricity, heating oil and for vehicle fleet) What own e-commerce services do you plan to develop? Encourage more retailers to sign up and exploit the • Achieve a 20% reduction in carbon emissions by 2020 close partnership with “One4All” gift voucher shop Note: - means no information Are you able to indicate how the percentage of your turnover No Source: USP that originates from or is related to third-party e-commerce transactions (e.g. purchases on the internet) Source: USP 13.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 13.9.4 Supply of hybrid mail services, total market Indicator 13.10.1 Transit time for domestic priority mail, 2009 Question Answer - Incumbent D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 Do you supply hybrid mail or virtual delivery solutions? What kind? Please see response under 1.9.1 dard (% actual dard (% actual dard (% actual dard (% actual If yes, how many years have you been supplying these services for? Since 1994 via our subsidiary trading as FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) “Printpost” www.printpost.ie/about.html 94 84 - - 99.5 98 - - What share of turnover do you generate from hybrid mail and/or vir- Please see response under 1.9.1 Note: - means no answers in questionnaire.”Standard” re tual delivery solutions? What is the trend? Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes Source:tion. NRA Source: USP

Indicator 13.9.5 Developments within networks and mail consolidation services Indicator 13.10.2 Transit time for cross-border priority mail, 2009 Question Answer D+1 stan- D+1 D+2 stan- D+2 D+3fers stan- to the targetD+3 performanceD+4 stan- specifiedD+4 by legisla- dard (% actual dard (% actual dard (% actual dard (% actual Have you carried out a major reorganisation of Yes. FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) your logistics network? For example, decentral- Deliveries: Delivery routes are being redesigned and rationalised. ising, implementing hub & spoke systems? This maximises the benefit of the recent transition to auto- - - - - 85 >85 - - mated route sorting. Collections: Mail boxes are scanned to ensure timely collections. Note: - means no information There are plans for this to be done on a ‘real time’ basis. Source: Ecorys (2008a) Quality: Plans for implementation of ISO 9001 quality management system and ‘Six Sigma’ Do you use different networks for letters and Different networks exist for inter regional transport with sepa- Indicator 13.10.3 Quality of service indicators parcels at collection, sorting, transportation or rate national hubs located in the Dublin Mails Centre (DMC) for Indicator Value delivery levels? What are the reasons? Letters and the town of Portlaoise for Parcels (PMC). Percentage of lost mail - What is the relative importance of road, rail and Transport by road accounts for 100% of all mail conveyed within air as modes of transportation for mail? Have Ireland. Number of postal outlets (post offices and agencies) and number of letter boxes c. 3.5 these shares changed recently? Why? per 10.000 inhabitants. c.15 Source: USP The implementation of CEN standards. Yes Note: - means no answers in questionnaire Source: NRA

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14.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 14.1.1 Country facts Country facts Value Unit Year Population 60.3 Million 2010 Population growth 6.0 Percent 2000-2010

Population density 200 Pop. / km2 2010 Urbanisation rate 68 Percent 2008 GDP 1 445 PPS, billion 2009 GDP/capita 24,000 PPS 2009 Postal services to GDP ’99/09: 0.55/0.54 Ratio 1998/2008

NRA Ministry of the economic development, department for postal regulation NRA responsibilities? Authorisation, Administrate USO fund, US rates, Special tariffs, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US Incumbent Poste Italiane S.p.A. Main activities of incumbent Postal services; Financial services; insurance services Employment, incumbent Private Law/Collective Bargaining Source of financing Banking facilities, Loans, Bonds Source: ITA/WIK (2009) Country fiche, Eurostat Chapter 14 ITALY Indicator 14.1.2 Volume of items delivered by segment in total market, millions Box 14.1 – Country summary of items Between 2007 and 2009, the total volume of Italian postal items decreased modestly 5.7 per- Segment 2005 2007* 2009 cent to 5.6 billion items. Addressed items - - - Italy is obliged to transpose the directive 2008/6/EC before the 1.1.2011 deadline. Letter - - - The role of the NRA is performed by the Ministero dello Sviluppo Economico (the Ministry of Correspondence - 1.759** 1.512** Economic Developmnet), which cannot be considered fully independent. Direct mail - 1.709 1.564 Correspondence and cross-border outbound are reserved area. Unaddressed items, express Publications - - - and parcels are fully liberalised. Unaddressed items - - - The Italian NPO experiences emerging competition in the areas of correspondence, direct mail Cross-border outbound - - - and cross-border outbound. Express - - - In Italy there have been three competition cases since 2007, of which one is closed and two Parcels - - - ongoing. The closed case dealt with abuse of dominant position in the reserved area. The remaining two with abuse of dominant position in inbound cross-border mail and the reserved Total 6.000 5.700 5.600 area. Note: * 2008 ** incl. priority mail Some potential legal barriers to entry are the state compensation for delivery of publications Source: NRA and for the universal service provision as well as the VAT exemption,. The NPO is adapting to changed market conditions by extensive restructuring of the mail de- , registered mail, judicial acts- livery network (e.g. the introduction of IT-based supply chain management) and diversification Indicator 14.1.3 Revenues from segments in total market, millions of Euro into new service areas (e.g. mobile telephone services). The Italian NPO is VAT exempted on all USO products. means no answers in questionnaire

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14.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 14.2.4 Services ensured as universal services under national law Segment Defined as universal service by law? Are quality standards specified by law? Indicator 14.2.1 National regulatory framework Basic letter post Yes Yes Bulk letters Yes Yes Question Yes/No Name of law Year of Remarks enactment Direct mail Yes Yes

Is postal law en- Yes Decreto Legislativo 22 luglio 1999, n. 1999 acted? 261 Periodicals Yes No

Is Directive 2008/6 No 2010 – Sec- transposed? ond half Non-priority letter s No No

Is there a law that defines… Basic parcel post Yes Yes Scope of USO? Yes Decreto Legislativo 22 luglio 1999, n. 1999 261 Bulk parcels No No Quality of USO? Yes See above, Decree 23/11/2009 1999, 2009 Note: - means no answers in questionnaire USO rates? Yes USP accounts Yes Decreto Legislativo 22 luglio 1999, n. 1999 Last document: 14 June Source: NRA, USP 261 2010, referring to 2009 accounts Reserved area? Yes See above, Deliberation 29/12/2005 1999, 2006 Indicator 14.2.5 Mechanisms to ensure provision of universal service Authorisation pro- Yes Leg. Decree 22/7/99 n. 261 1999 Question Answer cedures? Describe the role played by the three mechanisms: market forces, designa- - Universal service Yes See above tion and public procurement. Are other safeguarding measures present? fund? Note: - means no answers in questionnaire User protection? Yes See above Source: NRA Source: NRA, Ministry

Indicator 14.2.6 Legal mechanisms to ensure quality of universal service Indicator 14.2.2 Regulation of services based on new technologies Mechanism Yes/No Mechanism Yes/No Question Answer NRA sets monitoring standards? No* NRA can fine USP(s) Yes Are you aware of the presence of services based on new technologies in your market? For ex- Hybrid mail Annual measurement of quality of service? Yes NRA can impose other remedies? No ample, hybrid mail or virtual delivery networks? Annual publication of results on quality of service Yes Do you have plans to regulate such products? For example, confidentiality of hybrid mail? - monitoring? Note: - means no answers in questionnaire Note: *) NRA outsources monitoring Source: NRA Source: NRA

Indicator 14.2.3 VAT treatment of postal services performance to an independent body. Postal product Part of USO? VAT rate Legal basis Universal and non-universal Universal service is 20% Directive 2006/112/CE, imple- postal services for USP exempt from VAT mented by art.10 DPR 633/72, Law 73/2010). Source: NRA, Ministry

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Indicator 14.2.7 Financing the net cost of universal service Indicator 14.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area Reserved area Yes Who contributes to the compensation fund? Licensees* Services within universal services If yes, state services e.g. letter post (Incumbent, competitors, other entities) items, otherwise insert “No” Compensation fund Yes Public procurement No What licensing procedure is used? Individual license Size of compensation fund 116.000 Direct compensation from public funds Yes Which universal services are subject to individual license? Basic letter post, Bulk letters, Direct mail, Peri- (if present, in Euro / one hundred and odicals, Basic parcel post sixteen thousand euros)) Which universal services are subject to general authorisation? None Note: *) Postal operators providing Are authorisation requirements published (transparent)? Yes Source: NRA Is the USP authorised under Art. 9*? Yes Services outside universal Answer Remarks, experiences, problems encountered Indicator 14.2.8 Cost of universalservices withinservic universale obligation service. and method for its calcula- services tion For which services is general au- Non-universal Also USP needs to obtain a general authorisation, if wants thorisation required? services to perform postal services outside the scope of Universal Question Answer Service, i.e. value added services. Cost estimate of universal service (if available, in Euro) Confidential* For which services is an individual None Name of calculation method (if available) “Accounting Separation” license required (ex ante approval)? Short description of calculation method “Accounting Separation” is achieved through a cal- Source: NRA (if available) culation method which consists in allocating costs to each product / service obtaining the full-cost con- figuration. This methodology consists in the prod- Indicator 14.2.10 Access to postal infrastructure ensured by Member States ucts / services all cost components, directly and indirectly attributable, in accordance with the follow- Access to: Yes/No Other conditions: Yes/No ing composition: - Direct costs of production (estimated through the Post codes No * Change of address database No accounting methodology Activity Based Costing) Address database No USP return services No - Indirect costs of production - Costs directly attributed to products Post office boxes Yes Street letter boxes No - Indirect central costs Delivery boxes Yes Sorting centres No Is a thorough documentation of calculation method avail- The calculation method is defined within the Postal able? Where? Act (Legislative Decree 261 on 22 July 1999, article 7). Other conditions: Yes/No Is calculation method approved by the NRA? Yes Require downstream access to USP No Note: No figure was provided either Note: *) Poste Italiane (USP) allows access to po Source: USP Source: NRA

by the USP or the NRA (Ministry) st codes, but it is not regulated by NRA.

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Indicator 14.2.11 Involvement in competition cases since 2007 Indicator 14.3.2 Accounting requirements Postal product(s) con- Question Answer Question Answer Case name Case status cerned Issue Separation of accounts No. of up/down stream accounts - A299 international mail express it- Ongoing Inbound cross-border mail Abuse of dominant posi- Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - aly/poste italiane (starting tion: remailing activities. 04/04/2001); Appeal against the No. of reserved product accounts 7 Transparency administrative court (tar) decision Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes (no 689/2005); Case before the council of state to ask revision of No. of unreserved product accounts 11 Last review of USP accounts 2009 penalty imposed by the italian Body reviewing USP accounts (Type of body, Firm em- competition authority (agcm) Application of tariff principles e.g. NRA, USP) ployed by A388 poste italiane/concessionari Closed after self- Reserved area Abuse of dominant posi- USP servizi postali Case before the na- commitments by tion To bulk services within USO? Yes NRA issues statement of compliance? No tional competition authority (agcm) Poste Italiane (starting 03/08/2007) Does USP conclude individual agreements? No Last publish statement of compliance N/A A413 tnt post italia/poste italiane Ongoing - Reserved area Foreclosure strategy: Individual agreement: cost-based price required? N/A Publish cost allocation system? No Case before the national competi- - registered mail related to abuse of dominant posi- Individual agreement: NRA has cost data? N/A USP financial accts audited? Yes tion auhority for (agcm) (starting administrative and judicial tion USP has special tariffs? No Last published financial accounts 2009 19/10/2009 ) proceedings - Postal items up to 2 Kg, parcels up to 20 Kg, To up- and downstream accounts? N/A registered and insured mail Note: - means no answers in questionnaire - time-certain delivery Source: NRA Source: USP

Indicator 14.3.3 Cost accounting system of the USP 14.3. REGULATION OF PRICES AND ACCOUNTING Question Answer What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC Indicator 14.3.1 Method of price regulation Is the cost accounting system approved by the National Regulatory Authority? Yes Segment Method Remark Assessment of the system (pros and cons) Basic letter post Price cap For all items in this service category - Bulk letters Price cap For all items in this service category Note: - means no answers in questionnaire Direct mail Price cap For all items in this service category Periodicals Price cap For all items in this service category Source:FAC NRA, = fullyUSP allocated cost accounting Non-priority letter post Basic parcel post Price cap For all items in this service category Indicator 14.3.4 Promoting access to and affordability of postal services Bulk parcels Question Yes/No If yes, how? Source: NRA Non-discriminatory prices (Art. 12) required? Yes - Affordability (Art. 12) defined in national law? Yes - Note: - means no answers in questionnaire Source: NRA.

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14.4. ROLE OF NRA Indicator 14.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 14.4.1: NRA powers Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Task or power Yes/No Task or power Yes/No To whom is NRA decision appealed? Court Number of NRA decisions reversed? - Note: - Means no answer in questionnaire. Require USP cost allocation system? Yes Levy fines? Yes Approve USP cost allocation system? No Fines levied since 1.1.2006 regarding data require- No Source: NRA ments? Review cost allocation to non-USO? No Seek court order? - Require data from USP (Art.22)? Yes Cancel unlawful rates? Yes Indicator 14.4.5 Enforcement of competition rules by NRA and cooperation with Require data from non-USPs (Art.22) Yes Set new rates for USP? Yes NCA Require data studies? Yes Court orders sought since 1.1.2006 regarding data? - Question Yes/No Question Yes/No Require downstream access? No Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No Note: - means no answer in questionnaire Note: ‘NCA’ national competition authority. Source: NRA Source: NRA

Indicator 14.4.2: NRA human and financial resources Indicator 14.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 3,067 User protection procedures in postal Both USP(s) required to issue annual report Yes or consumer law? Number of total staff? 54 Enforcement by NRA or national con- Both NRA issues annual report No (Of which, staff dealing with postal affairs) sumer protection authority (NCPA)? Source of NRA budget General budget of the State or government, Fees collected from non- Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes postal operators Applies to non-USO services No Agency reviewing operator Postal Minister or Who approves NRA budget Parliament ministry staff Source: Remedies by competent national au- Both USP(s) required to issue annual report Yes thority? (maximum fee) Source: NRA Indicator 14.4.3: NRA independence

Question Yes/No Question Answer Does the government have a formal right Yes Who, and under what conditions, can Council of Minis- Indicator 14.4.7 Main issues of discussion between NRA and USP to guide NRA on policies? appoint NRA head? ter or Prime Min- Issue (Short description in bullet points) ister • Universal service funding Some NRA decisions require governmen- Yes Who, and under what conditions, can See above tal support? dismiss NRA head? • National Service Agreement • Transposition of the new postal directive 2008/6/EC Can government suspend NRA orders? - Minimum qualifications for NRA heads No Source: USP Note: - means no answer in questionnaire Source: NRA Indicator 14.4.8: NRA relations with customer associations

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14.5. MARKET STRUCTURE AND COMPETITION 14.5.3 Mail market segmentation Percentage opened to Subject to li- competition cense / au- No. of sig- Names of sig- Indicator 14.5.1:Information about the incumbent Under na- thorisation? nificantcom- nificant com- Actual Question Answer Question Answer Segment tional law (Yes/No) petitors petitors Name of incumbent Poste Italiane S.p.A. Main ac- Postal services; Financial services; Addressed items tiviies insurance services Letters Legal status State owned public limited company Employment Private Law/Collective Bargaining Correspon- reserved area unchanged Yes 1 TNT State ownership 65% Ministry of the Economy and Fi- Source of fi- - Banking facilities dence 50g (percent) nance nancing - Loans Direct mail >10,000 Yes 1 TNT - Bonds items Source: USP Publications Yes 1 TNT Unaddressed items TNT Cross-border out- reserved area unchanged 1 TNT Indicator 14.5.2 Incumbent profits, - 2009, national currency bound 50g Statistic Value Express Yes 6 DHL, TNT, Bartolini, Total profit 737 mln € UPS, GLS, Fedex Parcels Yes 6 See above Percentage of profit coming from letter mail Confidential Total Percentage of profit coming from reserved area (if present) Confidential Source: NRA Note: Profit by Poste Italiane S.p.A., Annual report 2009.

Source: USP

ndicator 14.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Indicator 14.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the ac- Main objectives behind the Date company quired company acquisition No mergers Note: USP: Information excludes creations of new co Source: USP

Indicator 14.5.6 New entrants since 2008 No. of en- Approximate market End-to-end or Segment trants share mpaniesup/downstream and operations by competition? controlled companies. Name Yes Source: NRA

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Indicator 14.5.7 Cross border mail Indicator 14.6.3 Revenues and volumes generated by consumers vs. business Main actors (if not re- Terminal dues regu- customers in 2008, national currency, millions of items Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Segment Business and Private customers 59 million items per year Yes - No Revenue Volume Note: - Means no answers in questionnaire Addressed items (domestic)* 3.529 5.875

Source: NRA Letters 3.352 4.905 Correspondence 3.021 3.384 Indicator 14.5.8 Presence and role of mail consolidators in the market Reserved area confidential confidential Question Answer Direct mail 331 1.437 Publications 177 970 Are companies offering mail consolidation services present in the market? Yes Unaddressed items 32 591 How large is the turnover of mail consolidators in relation to the postal market? - Cross-border mail outbound* - - Have you handled any competition cases involving mail consolidator? - Express 457 49 Note: - Means no answers in questionnaire Parcels 76 9 Source: NRA Total 4.094 6.524

Note: * Addressed items includes cross-border mail. 14.6. STRUCTURE OF MARKET DEMAND Source: USP and NRA (Poste Italiane Annual Report 2009)

Indicator 14.6.1 Revenues and volumes generated by consumers vs. business Indicator 14.6.4 Trends in mail substitution customers in 2009, national currency, millions of items Short description (in bullet points) Segment Revenue Volume Approximate • Actually, Internet penetration in Italy is low. We expect an increase of electronic substitution. (Mln/€) (Mln of items) market share in • Poste Italiane has taken advantage of new media (WEB, Internet) to develop the innovative digital services the total market (hybrid mail products, online registered mail and online telegram, Certificated Electronic Mail, remote banking services, mobile phone services, etc.). Addressed items (domestic)1 3.269 5.217 N/A Source: USP Letters 3.116 4.335 N/A Correspondence 2.832 3.077 N/A Reserved area confidential confidential N/A Direct mail 284 1.258 N/A Publications 153 882 N/A Unaddressed items 31 579 N/A Cross-border mail outbound1 - - N/A Express 420 46N/A Parcels 66 8N/A Total 3.786 5.850 N/A Note: - The table shows both total revenues and

business customers by segment ( the distinction be Addressed items includes cross-border mail. Market Source: Poste Italiane Annual Report 2009. Indicator 14.6.2: volumes without distinction between consumers and

tween consumer and business is confidential). share estimates are not available to the NRA. 136

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Indicator 14.6.5 Effect of the financial crisis on revenues in 2009 14.8. SOCIAL AND CONSUMERS ASPECTS Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Indicator 14.8.1 Employment indicators, 2009 Less than 5% 5-15% more than 15% USP Addressed items (domestic)* Decrease Employment (thousand), in full time equivalents 150.792 Letters Decrease Percentage of total country employment Correspondence Decrease Share of civil servants 0% Reserved area** Share of part time and temporary employment - Direct mail Decrease Number of outsourced and/or subcontracted workers in the delivery function N/A Publications Decrease in (monthly average for 2009) Unaddressed items Decrease Note: Data refers to Annual Report 2009 ; other data confidential. Cross-border mail outbound Source: USP Express Decrease Parcels Decrease Total Indicator 14.8.2 Wage and productivity indicators Note: * Addressed items include “cross-border mail outbound” Incumbent * *Information on reserved area are confidential Wages as a proportion of total costs 44,31% (including charges and Source: USP taxes) Average wage per hour (€) - 14.7. PRICE PERFORMANCE: Productivity measured by output per person employed Note: Data refers to Annual Report Source: USP Indicator 14.7.1 Public tariffs, 2004-2009 Segment 2005 2007 2009 2009 ; other data confidential. Single item: 20g tariff Ordinary letter: € 0,45,Priority Priority letter: € 0,60 Priority letter: € 0,60 14.9. TECHNOLOGICAL DEVELOPMENTS letter letter: € 0,60 Single item: 100g prior- € 1,50 Format M std: € 1,50, Format E Format M std: € 1,50, Format E ity mail std or other format not std: € std or other format not std: € Indicator 14.9.1 Innovation, technology and new services 2,00 2,00 Service Do you offer? Volume (million of items) Do you plan to offer? Single item: 500g in- Insured letter up to € 50:€ 8,85, Insured letter until € 50: € 8,85, Insured letter until € 50: € 9,85, sured and registered Registered letter: € 6,35 Registered letter: € 6,35 Registered letter: € 7,35 Hybrid mail Yes - - Single item: 1 kg parcel € 7,00 € 7,00 € 7,00 Virtual delivery of mail Yes - - Bulk mail: composed of Ordinary letter: € 0,45, Priority High density urban areas: € 0,28, High density urban areas: € 0,28, 20g letters letter: € 0,60 Low density urban, areas: € 0,43, Low density urban, areas: € 0,43, Rural areas: € 0,53 Rural areas: € 0,53 Pick up locations for parcels No - - (parcel shops) Bulk mail: composed of Ordinary letter: € 0,90, Priority High density urban areas: € 1,15, High density urban areas: € 1,15, 100g letters letter: € 1,50 Low density urban, areas: € 1,20, Low density urban, areas: € 1,20, Note: Data confidential Rural areas: € 1,25 Rural areas: € 1,25 Source: USP Source: USP

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Indicator 14.9.2 Statistics on technological progress Indicator 14.9.5 Developments within networks and mail consolidation services Indicator Value in Increase/decline Question Answer 2009 since 2007 Have you carried out a major re- We have not carried out a major reorganisation, but we increased the inte- Percentage of letter mail benefiting from automated processing (e.g. sorting) - - organisation of your logistics grated logistic platform and automated tracking processes and realized four network? For example, decen- "Logistic Control Room ". Further, we consolidated the governance models Percentage of parcels benefiting from automated processing (e.g. sorting) - - tralising, implementing hub & which are necessary to supervise the end-to-end process with the support of Note: Data confidential spoke systems? this network. Source: USP Do you use different networks for Yes, we use two different networks: one is for letters and small parcels (up to 2 letters and parcels at collection, kilos) and a second one is for bigger parcels (up to 30 kilos). The optimization sorting, transportation or deliv- and unification of overlapping process phases is under study. Indicator 14.9.3 Supply of e-commerce services, total market ery levels? What are the reasons? Question Answer - Incumbent What is the relative importance We do not use railway transportation. We use air transportation for j+1 prod- of road, rail and air as modes of ucts on routes whose length does not meet the standards of product by road Do you supply own e-commerce services? What kind? Poste Italiane is directly offering an integrated or transportation for mail? Have transportation. In recent years, we substituted part of air transportation by the modular platform, which allows merchant to manage these shares changed recently? road one for three main reasons: sales, payments, logistics within a unique solution Why? - the moving of the air hub from the centre to the north of Italy; What share of turnover do you generate from own e- - - the improvement of productive capacities of sorting centres; commerce services? What is the trend? - the reduction of volumes. What own e-commerce services do you plan to develop? - Source: USP Are you able to indicate how the percentage of your turn- - over that originates from or is related to third-party e- commerce transactions (e.g. purchases on the internet) Indicator 14.9.6 The most important environmental initiatives implemented Note: Data confidential Brief answer (in bullet points) Source: USP • Participation since 2007 in the Green-House Gas Reduction Programme. This Programme aims at reducing greenhouse gases by 10% within 5 years (2012) and by 20% by 2020. • Participation since 2010 in the Environmental Measurement and Monitoring System (EMMS). Indicator 14.9.4 Supply of hybrid mail services, total market • Coordination of the Green Post project, supported by Intelligent Energy for Europe (European Commis- Question Answer - Incumbent sion programme). This project aims at improving energy efficiency and reducing air pollution in Italy, Do you supply hybrid mail or virtual delivery solutions? Yes, Poste Italiane is offering both hybrid mail and vir- Belgium, Hungary, and Bulgaria by substituting the gasoline vehicles currently in use in mail delivery What kind? tual delivery solutions (e.g. Electronic Document Man- services with electric and hybrid vehicles. agement), directly and through Group’s companies • Purchase of an increasing percentage of renewable energy (electricity), which has reached 50% in If yes, how many years have you been supplying these Since 1987, as Poste Italiane Group. 2010, producing a 30% decrease of the whole CO2 emissions from buildings in the last three years. services for? • Set up of a bi-fuel (gasoline/methane) fleet in Europe, consisting of 1,374 vehicles What share of turnover do you generate from hybrid mail - and/or virtual delivery solutions? What is the trend? • Use of electric and hybrid vehicles in mail delivery • Set up a number of company policies and procedures for carbon management, such as: internal cam- Do you plan to develop (new) hybrid mail / virtual delivery - solutions? paign for separate collection of rubbish, publishing of the Environmental Value Paper, and participa- Note: Data confidential tion in international campaigns in favour of climate change. Source: USP Source: USP

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ITALY

14.10. QUALITY OF SERVICE DEVELOPMENTS Indicator 14.10.3 Quality of service indicators Indicator Value Indicator 14.10.1 Transit time for domestic priority mail, 2009 Percentage of lost mail N/A Number of postal outlets (post offices and agencies) and number of letter Post offices: * D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 boxes per 10.000 inhabitants. Letter boxes : about 10 ** dard (% actual dard (% actual dard (% actual dard (% actual The implementation of CEN standards. Yes FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Note: *The criterion for dist 89,0 90,7 - 99 99,3 - - Note: - means answer in questionnaire in terms of kilometers traveled by the user to Under the conditions of the NRA (decree 01/10/2008), Poste Italiane is obliged to meet quality of service With reference to theribution whole of national post offices territory is the maximum di standards for domestic priority mail at national level An access point within a maximum distance of 3 ki and regional level (21 quality standards). the population;

An access point within a maximum distance go to of the5 km nearest access point for residents. Source: NRA population; stance of accessibility to the service, , the universal service provider shall ensure: An access point within a maximum distance of 6 km Indicator 14.10.2 Transit time for cross-border(2 quality priority standards), mail, flow 2007 level (4 quality standards), population; lometers from the place of residence for 75% of D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 The universal service provider shall ensure the operation of a post office at least 96% of Italian dard (% actual dard (% actual dard (% actual dard (% actual municipalities. (decree 07/10/2008) from the place of residence for 92.5% of the FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) In Italian municipalities with one post office, th - - - - 85 91.3 - - the opening time is assured not less than three daysfrom and the eighteenplace of residencehours per for week 97.5% (decree of the Note: - means no information - no time reductions in the munici 07/10/2008).During summer, reduction of opening ho Source: Ecorys (2008a) to or less than 5,000 inhabitants - no opening time less than 3 days per week and 18 hours per week; ** Decree- no 07/10/2008, time reductions art. 3.2.can be applied to pr e USP is not allowed to close any post office, and palities with only one post office and whose population is equal Source: NRA urs of postal offices must respect following criteria: evalent tourist cities (decree 28/06/2007)

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15.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 15.1.1 Country facts Country facts Value Unit Year Population 2.2 Million 2010 Population growth -5.6 Percent 2000-2010

Population density 35 Pop. / km2 2010 Urbanisation rate 68.1 Percent 2008 GDP 25.8 PPS, billion 2009 GDP/capita 11,400 PPS 2009 Postal services to GDP ’99/09: 0.33/0.53 Ratio 1998/2008

NRA Public Utilities Commission (PUC) NRA responsibilities? To ensure compliance with the obligations arising from the Postal Directive; decisions and administrative instruments in order to safeguard the interests of users and to enhance development of the (universal)service provider (tasks/ responsabilities listed in Postal law; Chapter II section 6, Chapter III Section 8-Section 12, Chapter VI Section 27, Chapter VII Section 32, Chapter XIII, Section 54, 55) Incumbent Latvijas Pasts Main activities of incumbent Postal services Chapter 15 LATVIA Employment, incumbent Source of financing

Note: - Means no answer in questionnaire Box 15.1 – Country summary Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP The Latvian market experienced quite substantial declines in mail volumes from 2007 to 2009. Letter volumes declined by 20 percent, while cross-border mail nearly by a half. Express fell by 25 percent while parcel volumes declined by 25 percent. Indicator 15.1.2 Volume of items delivered by segment in total market, millions Latvia has not yet transposed Directive 2008/6/EC although in 2009 and by following of items amendments Latvia has introduced already some steps to transpose. Latvia is required to fully Segment 2005 2007 2009 transpose before 31.12.2012; the extended deadline. USO was changed in 2010, periodicals now included in USO. Addressed items Segments of correspondence, direct mail and cross-border outbound are still protected by the Letters 74.3 69.5 54.8 presence of the reserved area for size less than 50g. Publications, unaddressed items, express Correspondence 64.9 63 43.8 and parcels are market segment that are fully open to competition. Direct mail In addressed items, the Latvian NPO has 97% market share. In express the NPO has 8.5% Publications while in parcels the NPO has 100% market share. Unaddressed items Latvia has not experienced any competition cases related to postal services since 2007. Cross-border outbound 4.7 4.2 2.2 All USO related products are VAT exempt for the Latvian NPO. Express 2.7 6.3 4.7 Parcels 1.2 1.6 1.2 Total Source: NRA

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Indicator 15.1.3 Revenues from segments in total market, millions of Euro 15.2. REGULATORY FRAMEWORK AND PRACTICES Segment 2005 2007 2009 Mail 22.9 32.1 35.3 Express 10 13.7 15.5 Indicator 15.2.1 National regulatory framework Logistics Question Yes/no Name of law Year of enactment Remarks Financial Is postal law enacted? Yes Postal Law 2009 Others Yes Postal Law 2009 *). Postal Law deter- Total mines transitional period till 2013 for Source: NRA Is Directive 2008/6 transposed? reserved area and establishment of US compensation fund Is there a law that defines *) Yes Postal Law 2009 single, bulk letters, Scope of USO? int.al. direct mail, periodical, parcels Yes PUC Decision 2010 Postal Law sets down that Quality Quality of USO? of USO shall specified by PUC Decision Yes PUC Decision 2005, 2010 According the new Postal Law rates of USO rates? additional products of US are approved by PUC in the 2010 Yes Methodology of the 2009 Regulations of Determination of the USP accounts? PUC Tariffs of General Postal Services Reserved area? Yes Postal Law 2009 Till 2013 Yes Regulations on the 2009 Regulations of Authorisation procedures? General Authorization PUC in Postal Sector No Expected : Postal Law deter- 2012, December mines, that regula- Universal service fund? tions shall be issued by Cabinet till 31.12.2012. Yes Postal Law, 2009 User protection? Regulations of Cabinet 2010 Other special rights (which)? No Note: - *) Postal Directive is transposed in the several legislative acts –general provisions are set down in the Postal Law, more detailed provisions are defined in the Regulations of Cabinet, Regulations of PUC (Public Utility Com- mission) and Decisions of PUC. Source: NRA, Ministry

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Indicator 15.2.2 Regulation of services based on new technologies Indicator 15.2.5 Mechanisms to ensure provision of universal service Question Answer Question Answer Are you aware of the presence of services based on new technologies in your market? For No Describe the role played by the three NRA: Public procurement example, hybrid mail or virtual delivery networks? mechanisms: market forces, designation Ministry: Until 31.12.2012 one designated postal operator (only incum- Do you have plans to regulate such products? For example, confidentiality of hybrid mail? and public procurement. Are other safe- bent operator was demanded individual licence for providing of US ) will Source: NRA guarding measures present? provide US in the whole territory and all parts of the US. PUC is specified USO to this designated operator for ensuring providing of US. In 2012 PUC shall organise a tender in order to select the postal operator, which will provide US. The requirements and criteria of tender are Indicator 15.2.3 VAT treatment of postal services not yet defined. Postal product Part of USO? VAT rate Legal basis Note: - *) Postal Directive is transp (Yes/No) All, other then reserved yes, no 21% Law on VAT the Postal Law, more detailed provisions are defi area PUC (Public Utility Commission Letters till 50 grams (re- yes exemption Law on VAT Source: NRA and Ministry osed in the several legislative acts served area), provided by USP Indicator 15.2.6 Legal mechanisms to ensure quality of universal service Postage stamps no exemption Law on VAT ) and Decisions of PUC. Source: Ministry Mechanism Yes/No ned inMechanism the Regulations–general provisions of Cabinet, are setRegulations downYes/No in of Indicator 15.2.3 NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Indicator 15.2.5 Annual measurement of quality of service? No NRA can impose other remedies? Yes Indicator 15.2.4 Services ensured as universal services under national law Annual publication of results on quality of service No monitoring? Segment Defined as universal service by law? Are quality standards specified by law? Source: NRA Basic letter post Yes Yes Yes NRA: No Bulk letters USP: Yes Indicator 15.2.7 Financing the net cost of universal service NRA: Yes No Mechanism Yes/No Mechanism Yes/No Direct mail USP: No Reserved area Yes Who contributes to the compensation fund? No Periodicals Yes No (Incumbent, competitors, other entities) Non-priority letter s Yes Yes Compensation fund No Public procurement Yes Yes NRA: Yes Basic parcel post Size of compensation fund No Direct compensation from public funds No USP: No (if present, in Euro) Bulk parcels No No Source: NRA Source: NRA, USP Indicator 15.2.8 Cost of universal service obligation and method for its calculation Question Answer What is the cost estimate of USO? (if available, in Euro) N/A* Note: *: Data will be ready December 2010. Source: NRA, USP

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Indicator 15.2.9 Authorisation/licensing for services within and outside universal 15.3. REGULATION OF PRICES AND ACCOUNTING service area Services within universal services If yes, state services e.g. letter Indicator 15.3.1 Method of price regulation post items, otherwise insert “No” Segment Method Remark What licensing procedure is used? No (designation, general authorisation, individual license) Basic letter post ex post Which universal services are subject to individual license? No Bulk letters ex post Which universal services are subject to general authorisation? Letter post items, Parcels, Periodical Direct mail ex post Are authorisation requirements published (transparent)? Yes Periodicals ex post Is the USP authorised under Art. 9*? Yes Non-priority letter post ex post Services outside universal services Answer Basic parcel post ex post Bulk parcels N/A For which services is general authorisation required? Express, Courier Source: NRA No For which services is an individual license required (ex ante approval)? Note: *) Article 9 of Directive2008/6/EC Source: NRA Indicator 15.3.2: Accounting requirements Question Answer Question Answer No. of up/down stream accounts N/A Indicator 15.2.10 Access to postal infrastructure ensured by Member States Separation of accounts Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA N/A Access to: Yes/No Other conditions: Yes/No No. of reserved product accounts 1 Transparency Post codes No Change of address database No Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Address database No USP return services No No. of unreserved product accounts N/A Last review of USP accounts 2008 Post office boxes Yes Street letter boxes Yes Body reviewing USP accounts (Type of body, NRA Delivery boxes No Sorting centres No Application of tariff principles e.g. NRA, USP)

Other conditions: Yes/No To bulk services within USO? Yes NRA issues statement of compliance? No Require downstream access to USP Yes Does USP conclude individual agreements? No Last publish statement of compliance Yes Source: NRA Individual agreement: cost-based price required? N/A Publish cost allocation system? Yes Individual agreement: NRA has cost data? N/A USP financial accts audited? Yes Indicator 15.2.11 Involvement in competition cases since 2007 USP has special tariffs? No Last published financial accounts 2008 To up- and downstream accounts? N/A Case name Case status Postal product(s) concerned Issue Source: NRA None Source: USP

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Indicator 15.3.3 Cost accounting system of the USP 15.4. ROLE OF NRA Question Answer What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC Indicator 15.4.1: NRA powers Is the cost accounting system approved by the National Regulatory Authority? - Task or power Yes/No Task or power Yes/No Assessment of the system (pros and cons) Require USP cost allocation system? Yes Yes Levy fines? Yes Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- No - ments? Note: - means no answers in questionnaire Review cost allocation to non-USO? No Seek court order? Yes Require data from USP (Art.22*)? Yes Cancel unlawful rates? No FAC = fully allocated cost accounting,. Source: NRA, USP Require data from non-USPs (Art.22*) Yes Set new rates for USP? Yes Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Indicator 15.3.4 Promoting access to and affordability of postal services Require downstream access? No Question Yes/No If yes, how? Note: - means no information Non-discriminatory prices (Art. 12) re- Yes - quired? *) Article 22 of Directive 2008/6/EC Affordability (Art. 12) defined in national NRA: No Source: NRA law? Ministry: Yes Universal postal service – the minimum aggregate of postal services of specific quality available for affordable prices to all users throughout the territory of Lat- Indicator 15.4.2: NRA human and financial resources via regardless of the geographical location thereof; Question Answer obligations to provide the universal postal service in the most economically advantageous manner, ensur- Size of budget? (€ thousands) - ing that users throughout the territory of Latvia have Number of total staff ? 6 equal opportunities to receive the services included in the universal postal service. (Of which, staff dealing with postal affairs) Note: - means no answers in questionnaire Source of NRA budget - Who approves NRA budget Parliament Article 12 of Directive 2008/6/EC stipulates that Note: - means no answers in questionnaire and must be such that all users, independent of ge Source: NRA Source:national NRA conditions, have acce Indicator 15.4.3: NRA independence Question Yes/No Question Answer ss to the services provided.prices shall be non-discriminatory and affordable Does the government have a formal right No Who, and under what conditions, can ap- - ographical location, and, to guide NRA on policies? point NRA head? Some NRA decisions require governmen- No Who, and under what conditions, can - tal support? dismiss NRA head? in the light Can government suspend NRA orders? No Minimum qualifications for NRA heads No * of specific Note: - means no answers in questionnaire *: There is no criteria in the legal basis Source: NRA

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Indicator 15.4.4 Complaint handling – appeal from NRA decisions 15.5. MARKET STRUCTURE AND COMPETITION Question Answer Question Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes To whom is NRA decision appealed? Court Number of NRA decisions reversed? 0 Indicator 15.5.1:Information about the incumbent Source: NRA Question Answer Question Answer Name of incumbent Latvijas Pasts Main activities Postal services Legal status State Joint Stock Company Employment - Indicator 15.4.5 Enforcement of competition rules by NRA and cooperation with State ownership (percent) 100% Source of financing - NCA Note: - means no answers in questionnaire Question Yes/No Question Yes/No Source: USP Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Note: ‘NCA’ national competition authority. Source: NRA Indicator 15.5.2 Incumbent profits, 2009, national currency Statistic Value

Indicator 15.4.6 Regulation of user protection procedures and remedies Total profit in 2009 losses 0.1 mln EUR Percentage of profit coming from letter mail 51.2% Question Answer Question Answer Percentage of profit coming from reserved area (if present) - User protection procedures in postal or con- Postal USP(s) required to issue annual report Yes sumer law? law Note: - means no answers in questionnaire Enforcement by NRA or national consumer NRA NRA issues annual report Yes Source: USP protection authority? Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Indicator Indicator 15.5.3 Mail market segmentation Applies to non-USO services Yes Agency reviewing operator NRA Percentage opened to Remedies by competent national authority? Yes Subject to li- No. of sig- competition Names of significant (maximum fine) Segment cense / au- nificant- Under na- competitors Source: NRA Actual thorisation? competitors tional law Addressed items Yes 3 Latvijas Pasts Indicator 15.4.7 Main issues of discussion between NRA and USP Letters Issue Short description (in bullet points) Correspondence Reserved Yes area 50g • Tariffs calculation Direct mail Reserved Yes • Quality of services area 50g Source: NRA, USP Publications 100 Indicator 15.4.8 Unaddressed items Cross-border out- Re-served Yes 1 bound area 50g Express 100 Yes 55 Velokurjers, City express Parcels 100 Yes 28 DPD Latvia Total Source: NRA

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Indicator 15.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Indicator 15.5.8 Presence and role of mail consolidators in the market Segment Approximate sum of market shares of 3 main competitors Question Answer Are companies offering mail consolidation services present in the market? N/A Letter post (open area) 100% How large is the turnover of mail consolidators in relation to the postal market? N/A Parcels Below 80% Have you handled any competition cases involving mail consolidator? N/A Express Above 50% Unaddressed items - Source: NRA Note: - means no answers in questionnaire Source: NRA 15.6. STRUCTURE OF MARKET DEMAND

Indicator 15.5.5 Mergers and acquisitions of incumbent since 2007 Main activities of the ac- Main objectives be- Indicator 15.6.1 Revenues and volumes generated by consumers vs. business Date Name of acquired company quired company hind the acquisition customers in 2009, national currency, millions of items 2008 Joint venture “Latvijas Pasta Nodaļu Separating Post Offices net- Due to change in strategy Segment Total Business + Private Approximate market share in Tīkls” (Latvian Post Offices Network), work from main company activities not started. In cooperation with SIA MONO Revenue Volume the total market Source: NRA Addressed items (domestic) 28.4 96.3 97.06% Letters 23.6 48.8 99.98% Indicator 15.5.6 New entrants since 2008 Correspondence 20.6 40.2 - Reserved area - Segment No. of en- Approximate End-to-end or up/downstream com- Name Direct mail 3.0 7.6 - trants market share petition? Publications 4.8 47.5 97.88% Mail 0 Unaddressed items 1.4 21.3 - Express 20 Below 5% Cross-border mail outbound 1.8 2.2 - Logistics - Express 2.3 0.4 8.52% Financial - Parcels 1.1 0.3 100% Others - Total 35.0 123.0 - Note: - means no answers in questionnaire Note: - Means no answer in questionnaire Source: NRA Source: USP

Indicator 15.6.2: Indicator 15.5.7 Cross border mail Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? 14,6 million (2.2) Yes No Source: NRA

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Indicator 15.6.3 Revenues and volumes generated by consumers vs. business Indicator 15.6.5 Effect of the financial crisis on revenues in 2009 customers in 2008, national currency, millions of items Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Business + private customers Less than 5% 5-15% more than 15% Segment Revenue Volume Addressed items (domestic) decline Addressed items (domestic) 34.4 120.3 Letters decline Letters 29.1 60.8 Correspondence decline Correspondence 23.8 51.7 Reserved area Reserved area Direct mail decline Direct mail 3.6 9.1 Publications decline Publications 5.3 59.5 Unaddressed items increase Unaddressed items 1.4 19.9 Cross-border mail outbound decline Cross-border mail outbound 2.5 2.9 Express decline Express 2.7 0.5 Parcels increase Parcels 0.9 0.2 Total Total 41.9 143.8 Note: - means no answer in questionnaire Source: USP Source: USP 15.7. PRICE PERFORMANCE: Indicator 15.6.4 Trends in mail substitution Short description (in bullet points) Indicator 15.7.1 Standard public tariffs, 2005-2009, national currency • Domestic letter post has substantially increased until 2008, but at lower growth rates than real GDP. Since beginning of 2009 swift decrease in almost all categories of mail including letter post. Segment 2005 2007 2009 • “Emerging electronic alternatives have possibly limited growth in correspondence: the penetration rates of Single item: 20g tariff letter 0.15 0.31 0.40 internet and broadband access are relatively high” ITA/WIK (2009b) Single item: 100g priority mail 0.35 0.56 0.58 Source: USP Single item: 500g insured and registered 0.80 + insurance 1.02 + insurance 2.05 + insurance Single item: 1 kg parcel 0.85 1.07 1.16 Bulk mail: composed of 20g letters - 0.22 0.22 Bulk mail: composed of 100g letters - 0.40 0.40 Note: - means no answers in questionnaire Source: USP

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15.8. SOCIAL AND CONSUMERS ASPECTS Indicator 15.9.2 Statistics on technological progress Value in Increase/decline Indicator 2009 since 2007 Indicator 15.8.1 Employment indicators, 2009 Percentage of letter mail benefiting from automated processing (e.g. sorting) 0% 0% USP Percentage of parcels benefiting from automated processing (e.g. sorting) 0% 0% Employment (thousand), in full time equivalents 5.1 Note: - means no answers in questionnaire Percentage of total country employment Source: NRA Share of civil servants 0 Indicator 15.9.3: Indicator 15.9.4: Share of part time and temporary employment 27% Indicator 15.9.5 Developments within networks and mail consolidation services Share of outsourced and subcontracted employment 0 Question Answer Note: - means no answers in questionnaire Have you carried out a major reorganisation In period 2007 to 2009 decrease in number of distribution centres Source: USP of your logistics network? For example, de- from 26 to 11 centralising, implementing hub & spoke systems? Indicator 15.8.2 Wage and productivity indicators Do you use different networks for letters and Collection – different networks for collection (letters from MB and Incumbent parcels at collection, sorting, transportation PO, parcels only PO); or delivery levels? What are the reasons? Sorting – Located in one sorting and exchange centre, separated Wages as a proportion of total costs 65% sorting process in Parcels sorting office and Letters sorting office; Average wage per hour (€) - Transportation – the same network for transportation between Of- Note: - means no answers in questionnaire fice of Exchange and distribution centres; Delivery – No home-delivery for parcels; parcels handed over at Source: Latvijas pasts, Annual report 2009 post office counter What is the relative importance of road, rail Domestic mail transported only by road; and air as modes of transportation for mail? International mail mostly by air, only to EE and LT by road 15.9. TECHNOLOGICAL DEVELOPMENTS Have these shares changed recently? Why? Do you offer mail consolidation services? What type and to whom? Indicator 15.9.1 Innovation, technology and new services Note: - means no answers in questionnaire Service Do you offer? Volume (million of items) Do you plan to offer? Source: USP (Yes/No) (Yes/No) Incator 15.9.6:

Hybrid mail Yes 24.0 - Virtual delivery of mail No - 15.10. QUALITY OF SERVICE DEVELOPMENTS

Pick up locations for parcels No Not applicable - (parcel shops) Indicator 15.10.1 Transit time for domestic priority mail, 2009 Note: - means no answers in questionnaire D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual Source: NRA FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC)

97 96.3 - - 97 99.5 Note: - means no answers in questionnaire Source: NRA

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Indicator 15.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 - - - Note: - means no information Source: Ecorys (2008a)

Indicator 15.10.3 Quality of service indicators Indicator Value Percentage of lost mail N/A Number of postal outlets (post offices and agencies) and number of letter 2,7 postal outlets boxes per 10.000 inhabitants. 7,9 letter boxes The implementation of CEN standards. No Source: NRA

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16.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 16.1.1 Country facts Country facts Value Unit Year Population 3.3 Million 2010 Population growth -5.2 Percent 2000-2010

Population density 51 Pop. / km2 2010 Urbanisation rate 66.9 Percent 2008 GDP 51.6 PPS, billion 2009 GDP/capita 12,500 PPS 2009 Postal services to GDP ’99/09: 0.40%/0.40% Ratio 1998/2008

NRA Communications Regulatory Authority of The Republic Of Lithuania (RRT) NRA responsibilities? Market supervision, US rates, USP accounts, Quality of US, User complaints, Cross subsidy, supervision of compliance with public postal network characteris- tics, establishment of requirements for the provision of postal and courier services Incumbent AB Lietuvos paštas Main activities of incumbent Chapter 16 LITHUANIA Employment, incumbent Source of financing

Source: ITA/WIK (2009) Country fiche, Eurostat, NRA

Box 16.1 – Country summary Indicator 16.1.2 Volume of items delivered by segment in total market, millions The volume of letter mail increased about 3 percent in the period from 2007 to 2009. Parcels increased Direct mail grew by 66 percent while parcels grew by 17 percent. of items Lithuania has not transposed Directive 2008/6/EC. In 2009, a work group was established to Segment 2005 2007 2009 prepare amendments to the postal law to meet the country’s extended deadline for transposi- Addressed items N/A N/A N/A tion on 31.12.2012. Letters 61.0 80.76 83.38 Market segments of correspondence and direct mail are reserved area for items less than 50g. Correspondence N/A N/A N/A Publications and unaddressed items are fully open to competition. Direct mail 1.95 2.43 4.05 The Lithuanian NPO experiences little competition in the market for letter mail. There is in- Publications N/A N/A N/A tense competition in markets express and parcels. Unaddressed items N/A N/A N/A Lithuania did not have any competition cases since 2007 related to the postal sector. Cross-border outbound N/A N/A N/A One legal entry barrier is the reserved area which will remain in force until January 1, 2013. Express N/A N/A N/A The NPO in Lithuania is VAT exempted for all products connected to the USO. Parcels 2.27 3.5 4.1 Total Source: NRA

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Indicator 16.1.3 Revenues from segments in total market, millions of Euro 16.2. REGULATORY FRAMEWORK AND PRACTICES Segment 2005 2007 2009 Mail 69.83 LT 90.24 LT 97.67 LT Express N/A N/A N/A Indicator 16.2.1 National regulatory framework Logistics 78.28 LT 129.87 LT 128.39 LT Question Yes Name of law Year of en- Remarks /no actment Financial N/A N/A N/A Is postal law Yes Republic of Lithuania Postal Law (Official 2000, 2004, http://www.rrt.lt/index.ph Others 215.2 LT 281.83 LT 279.21 LT enacted? Gazette Valstybės žinios, 1999, No. 36-1070; 2010 p?1408717299 Total 2004, No. 60-2125). Source: NRA Is Directive No 2012 In the year 2009 a working 2008/6 group on this issue was es- transposed? tablished and the amendments to the Postal Law are being prepared. Is there a law that defines… Yes Republic of Lithuania Postal Law (Official Ministry: 2004 http://www.rrt.lt/index.ph Scope of Gazette Valstybės žinios, 1999, No. 36-1070; NRA: 2010 p?1408717299 USO? 2004, No. 60-2125). Quality of Yes Order No.3-495 of the Minister of Transport Ministry: 2004 http://www3.lrs.lt/pls/inte USO? and Communications of the Republic of NRA: 2007 r3/dokpaieska.showdoc_l?p Lithuania regarding the approval of the _id=243879 schedule of the universal postal services quality requirements of 12 October 2004. USO rates? Yes Resolution No. 745 of the Government of 2007 http://www3.lrs.lt/pls/inte the Republic of Lithuania regarding the ap- r3/dokpaieska.showdoc_l?_ provement of the biggest rates of universal id=30 services of 11 July 2007. USP ac- Yes Order No. IV-625 of the Director of Commu- 2005 http://www.rrt.lt/index.ph counts? nications Regulatory Authority of the Re- p?-1030098618 public of Lithuania on the approval of the rules for cost accounting of universal postal service providers of July 1, 2005 Reserved Yes Republic of Lithuania Postal Law (Official 2004 http://www.rrt.lt/index.ph area? Gazette Valstybės žinios, 1999, No. 36-1070; p?1408717299 2004, No. 60-2125). Authorisation Yes Order No. IV-1544 of the Director of Commu- Ministry: 2009 Ministry: procedures? nications Regulatory Authority of the Re- NRA: 2009, http://www.rrt.lt/index.ph public of Lithuania regarding the approve- 2010 p?1575240983 At the moment of the regulations on providing of ment the text of the docu- postal and couriers services of 29 December ment is available in Lithua- 2009. nian only. NRA: From 2010 there is no licensing regime for postal services providers. They have just to inform the regulator about the beginning of their activities

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Universal No This issue is the subject of service fund? analysis of the working Indicator 16.2.4 Services ensured as universal services under national law group. Up to now no con- Segment Defined as universal service by law? Are quality standards specified by law? crete decisions or conclusions have been drawn yet. Basic letter post Yes Yes User protec- Yes Order No. IV-656 of the Director of Commu- 2005 http://www.rrt.lt/index.ph Bulk letters Yes Yes tion? nications Regulatory Authority of the Re- p?1408717299 Direct mail No No public of Lithuania on the approval of the rules for investigation of disputes between Periodicals No No providers and consumers of postal servines Non-priority letter s Yes No and/or courier services of 18 July 2005. Basic parcel post Yes No Other special Yes Republic of Lithuania Postal Law (Official 2004 http://www.rrt.lt/index.ph rights Gazette Valstybės žinios, 1999, No. 36-1070; p?1408717299 Bulk parcels Yes No (which)? 2004, No. 60-2125).Article 8. 3. A universal Source: NRA postal service provider shall be obliged: 5) to compensate for the expenses of posting literature for the blind and of letter-post items of prisoners of war or internees. Indicator 16.2.5 Mechanisms to ensure provision of universal service Source: Ministry, NRA Question Answer Describe the role played by the The Government of Lithuania has authorized /designated AB Lietuvos three mechanisms: market forces, paštas (“Public Limited Company Lithuania Post”) to provide universal Indicator 16.2.2 Regulation of services based on new technologies designation and public procure- postal services throughout the whole of the territory of the country. It is the Question Answer ment. Are other safeguarding only UPS provider as no other postal services provider has country wide infra- measures present? structure.There are over 80 other postal and courier services providers acting Are you aware of the presence of services based As hybrid mail is printing and delivery of mail, just delivery of in towns or other limited areas. on new technologies in your market? For exam- letters falls under the regulation. ple, hybrid mail or virtual delivery networks? Source: NRA, Ministry Do you have plans to regulate such products? The regulator is obliged to ensure confidentiality of information For example, confidentiality of hybrid mail? according to the Postal Law Indicator 16.2.6 Legal mechanisms to ensure quality of universal service Source: NRA Mechanism Yes/No Mechanism Yes/No NRA sets monitoring standards? No NRA can fine USP(s)? Yes Indicator 16.2.3 VAT treatment of postal services Annual measurement of quality of service? Yes NRA can impose other remedies? No Postal product Part of USO? VAT rate Legal basis Annual publication of results on quality of service Yes (Yes/No) monitoring? 1. Universal postal services provided by USP, as Yes Shall be ex- Republic of Lithuania Law on Source: NRA they are defined in the Postal Law, and the empt from VAT Value-Added Tax goods directly related with the provision of (Article 9. Amendment of Ar- those services shall be exempt fromVAT. ticle 25. Postal services) Indicator 16.2.7 Financing the net cost of universal service 2. The provisions of this Article shall be not applied to the postal services provided by the USP Mechanism Yes/No Mechanism Yes/No and the goods related to those services in case Reserved area Yes Who contributes to the compensation fund? No the conditions of their provision have been ne- (Incumbent, competitors, other entities) gotiated individually. Compensation fund No Public procurement No Postal correspondence up to 2 kg Yes 0 The Law of VAT, 2009 Parcels up to 10 kg Yes 0 The Law of VAT, 2009 Size of compensation fund No Direct compensation from public funds No (if present, in Euro) Parcels up to 20 kg from EU countries Yes 0 The Law of VAT, 2009 Note: Direct compensation from public fu Registered and insured items Yes 0 The Law of VAT, 2009 Source: NRA Source: NRA, Ministry

nds includes subsidies and state aid. 152

LITHUANIA

Indicator 16.2.8 Cost of universal service obligation and method for its calcula- Indicator 16.2.11 Involvement in competition cases since 2007 tion Case name Case status Postal product(s) con- Issue (ongoing/closed) cerned Question Answer - Closed Direct mail Price discrimination What is the cost estimate of USO? (if N/A available, in Euro) Note: - means no information Source: NRA Source: Competition Council of the Republic of Lithuania (2007),

http://www.konkuren.lt/en/index Indicator 16.2.9 Authorisation/licensing for services within and outside universal 16.3. REGULATION OF PRICES AND ACCOUNTING service area

Services within universal services If yes, state services e.g. letter post .php?show=news_view&pr_id=454 items, otherwise insert “No” Indicator 16.3.1 Method of price regulation What licensing procedure is used? Designation* Segment Method Remark (designation, general authorisation, individual license) Basic letter post Ex ante For all items in this service category Which universal services are subject to individual license? None Bulk letters Ex post For all items in this service category Which universal services are subject to general authorisation? None Direct mail Ex post Are authorisation requirements published (transparent)? Yes Periodicals N/A Periodicals aren’t universal service Is the USP authorised under Art. 9*? Yes Non-priority letter post Ex ante For all items in this service category Services outside universal services Answer Basic parcel post Ex ante For all items in this service category For which services is general authorisation required? Correspondence, courier Bulk parcels Ex post For which services is an individual license required (ex ante approval)? No Source: NRA Note: *) Article 9 of Directive2008/6/EC Source: NRA Indicator 16.3.2 Accounting requirements

Question Answer Question Answer Indicator 16.2.10 Access to postal infrastructure ensured by Member States Separation of accounts No. of up/down stream accounts N/A Access to: Yes/No Other conditions: Yes/No Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA 2004 Post codes Yes Change of address database No No. of reserved product accounts 18 Transparency Address database Yes USP return services Yes Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Post office boxes Yes Street letter boxes Yes No. of unreserved product accounts 190 Last review of USP accounts 2009 Delivery boxes Yes Sorting centres Yes Application of tariff principles Body reviewing USP accounts (Type of body) NRA Other conditions: Yes/No Bulk services within USO? Yes NRA issues statement of compliance? Yes Require downstream access to USP Yes Does USP conclude individual agreements? Yes Last publish statement of compliance 2008 Source: NRA Individual agreement: cost based price required Yes Publish cost allocation system? No Individual agreement: NRA has cost data? Yes USP financial accounts audited? Yes USP has special tariffs? Yes Last published financial accounts 2009 Up- and downstream accounts? N/A Source: NRA

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Indicator 16.3.3 Cost accounting system of the USP 16.4. ROLE OF NRA Question Answer What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Indicator 16.4.1: NRA powers Is the cost accounting system approved by the National Regulatory Authority? Task or power Yes/No Task or power Yes/No Assessment of the system (pros and cons) Require USP cost allocation system? Yes Levy fines? Yes Yes Fines levied since 1.1.2006 regarding data require- Approve USP cost allocation system? Yes Detailed products/services cost accounting information, The current costs are significantly different from the his- ments? torical costs Review cost allocation to non-USO? No Seek court order? Yes Require data from USP (Art.22*)? Yes Cancel unlawful rates? No Source: NRA Require data from non-USPs (Art.22*) Yes Set new rates for USP? No

Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Indicator 16.3.4 Promoting access to and affordability of postal services Require downstream access? Yes Question Yes/No If yes, how? Note: - means no information Non- Yes Republic of Lithuania Postal Law, Article 8. *) Under Article 22 of Directive 2008/6/EC discrimina- “1. Every user shall enjoy the right to universal postal services provided at affordable NRA tory prices prices at all points in the territory of the country.” Source: (Art. 12*) re- “5. The tariffs of universal postal services must be geared to the costs of the universal quired? postal services provided, but must be affordable for all users of postal services, transparent and non-discriminatory. Where the Government fixes lower tariff ceilings for Indicator 16.4.2: NRA human and financial resources universal postal services to a universal postal service provider than costs of postal services, the difference between the costs and tariffs shall be covered in the manner set Question Answer forth by the Government from the funds earmarked in the State budget.” Size of budget? (€ thousands) - “6. In applying special tariffs, a universal postal service provider shall apply the principles of transparency and non-discrimination to the tariffs and to the terms and condi- Number of total staff ? tions related thereto. Such tariffs shall be set taking account of the avoided costs, as (Of which, staff dealing with postal affairs) 9 (4 in Universal Services Division, 4 in Postal Regulation Division and compared to the standard postal services. The tariffs must be the same to all users Director of Postal Department) posting under comparable conditions.” Source of NRA budget Fees collected from postal operators generally and non-postal opera- Affordability Yes - tors (Art. 12*) de- Who approves NRA budget Parliament fined in national law? Note: - means no answers in questionnaire Note: - means no answers in questionnaire Source: NRA Article 12 of Directive 2008/6/EC. Source: Ministry, NRA Indicator 16.4.3: NRA independence Question Yes/No Question Answer Does the government have a formal right No Who, and under what conditions, can ap- The President to guide NRA on policies? point NRA head? Some NRA decisions require governmen- No Who, and under what conditions, can The President tal support? dismiss NRA head? Can government suspend NRA orders? No Minimum qualifications for NRA heads - Note: - means no answers in questionnaire

Source:NRA

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Indicator 16.4.4 Complaint handling – appeal from NRA decisions Indicator 16.4.7 Main issues of discussion between NRA and USP Question Answer Question Answer Issue Short description (in bullet points) Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes 1) Postal strategy • Working Group is created from the representatives of NRA, Ministry, USP and other To whom is NRA decision appealed? Court Number of NRA decisions reversed? 2 till 2015 operators. 2) Transposition of Source: NRA • In 2009 Working Group on this issue was established from the representatives of Directive NRA, Ministry, USP and other operators and the amendments of the Postal Law are 3) USO supervision being prepared. 4) Market supervi- • Regular meetings with the USP regarding quality, cost accounting, transposition of Indicator 16.4.5 Enforcement of competition rules by NRA and cooperation with sion standard EN 13850, user protection. NCA 5) Economical sanc- • Regular meetings with postal and courier services providers, regarding requirements of tions the provision of postal and courier services, information provided on the seals, report- Question Yes/No Question Yes/No ing to NRA, return of letters and others. Who is the primary enforcer of com- NCA ex post and NRA ex NRA obliged to share info with NCA? Yes • Draft amendments prepared in the Postal Law for rude violators of requirements of petition rules? ante postal services provision. Note: ‘NCA’ national competition authority. Source: NRA Source: NRA Indicator 16.4.8: NRA relations with customer associations Example of relation (Short description in bullet points) Indicator 16.4.6 Regulation of user protection procedures and remedies NRA is the institution resolving disputes between the providers and users. There are consultations and change of in- Question Answer Question Answer formation between consumer association and NRA. User protection procedures in postal or con- Postal USP(s) required to issue annual report Yes Source: NRA sumer law? law Enforcement by NRA or national consumer NRA NRA issues annual report Yes protection authority? 16.5. MARKET STRUCTURE AND COMPETITION Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Applies to non-USO services Yes Agency reviewing operator NRA Indicator 16.5.1:Information about the incumbent Remedies by competent national authority? Yes (maximum fine) Question Answer Question Answer Source: NRA Name of incumbent AB Lietuvos pastas Main activities Postal, courier, financial services Legal status Stock company Employment 8053 (3660 of them are working not full day) State ownership (percent) 100 Source of financing State budget for loss-making universal postal services Source: NRA

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Indicator 16.5.2 Incumbent profits, 2009, national currency Indicator 16.5.5 Mergers and acquisitions of incumbent since 2007 Statistic Value Total profit in 2009 -48 672 LT Indicator 16.5.6 New entrants since 2008 Percentage of profit coming from letter mail Segment No. of Approximate mar- End-to-end or up/downstream Name Percentage of profit coming from reserved area (if present) entrants ket share competition? Note: - means no information Mail 1 0-1 Source: NRA Express - Logistics 19 10-20 Indicator 16.5.3 Mail market segmentation Financial - Others - Percentage opened to com- Note: - means no answers in questionnaire Subject to li- petition cense / au- No. of significantcom- Names of signifi- Source: NRA Segment Under thorisation? petitors cant competitors (Yes/No) national Actual Indicator 16.5.7 Cross border mail law Main actors (if not re- Terminal dues regu- Addressed items 11 Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Letters 11 3.3 million items Inbound only - No Correspondence Reserved Yes 11 area 50g Source: NRA Direct mail Reserved Yes 11 area 50g Publications 100 100 Indicator 16.5.8 Presence and role of mail consolidators in the market Unaddressed items 100 100 11 Question Answer Cross-border out- Yes Are companies offering mail consolidation services present in the market? Yes bound How large is the turnover of mail consolidators in relation to the postal market? Express 100 100 Yes 5 Have you handled any competition cases involving mail consolidator? Parcels 100 100 Yes 82 Note: - means no answers in questionnaire Total 84 Source: NRA Source: NRA

16.6. STRUCTURE OF MARKET DEMAND Indicator 16.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Segment Approximate sum of market shares of 3 main competitors No answers were provided Letter post (open area) 5-8 Parcels 50-60 Express - Unaddressed items - Note: - means no answers in questionnaire Source:NRA

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16.7. PRICE PERFORMANCE: Indicator 16.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual Indicator 16.7.1 Public tariffs, 2004-2009 FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Segment 2005 2007 2009 - - - - 85 79.2 - - Single item: 20g tariff letter 1LT 1.35 FOR NON- 1.35 FOR NON- Note: - means no information PRIORITY, 1.55 FOR PRIORITY, 1.55 FOR Source: Ecorys (2008a) PRIORITY PRIORITY Single item: 100g priority mail 1.4 LT 1.8 LT Single item: 500g insured and registered 4 LT (+2LT FOR RE- 4.25 FOR NON- Indicator 16.10.3 Quality of service indicators GISTERING, +2.8 PRIORITY, 4.9 FOR FOR INSURANCE) PRIORITY (+2 LT Indicator Value FOR REGISTERING, Percentage of lost mail N/A +12 FOR INSUR- ANCE) Number of postal outlets (post offices and agencies) 880 Single item: 1 kg parcel 6.32 LT 10.38 LT 8.8 LT Number of letter boxes per 10.000 inhabitants. 7 Bulk mail: composed of 20g letters The implementation of CEN standards. Yes (of EN 13850 and EN 14012) Bulk mail: composed of 100g letters Source: NRA Source: USP

16.8. SOCIAL AND CONSUMERS ASPECTS

No answers were provided

16.9. TECHNOLOGICAL DEVELOPMENTS

No answers were provided

16.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 16.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 85 75 - 96 97 99 - 100 Note: - means no answers in questionnaire Source: NRA

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17.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 17.1.1 Country facts Country facts Value Unit Year Population 0.5 Million 2010 Population growth 15.8 Percent 2000-2010 Population density 194 Pop. / km2 2010 Urbanisation rate 82.4 Percent 2008 GDP 31.7 PPS, billion 2009 GDP/capita 63,700 PPS 2009 Postal services to GDP ’99/09: 0.81%/0.59% Ratio 1998/2008 NRA Institut Luxembourgeoise de Régulation (ILR) NRA responsibilities? Authorisation, US rates, Special tariffs, USP accounts, Quality of US, Cross subsidy in US, Cross subsidy non-US Incumbent Entreprise des Postes et Télécommu-nications (EPT) Main activities Telecom, postal and postal financial services Chapter 17 Employment Mostly civil servants (> 80%) Source of financing Reserved area until 1.1.2013 Note: - means no answers in questionnaire LUXEMBOURG Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

Box 17.1 – Country summary Indicator 17.1.2 Volume of items delivered by segment in total market, millions The mail market in Luxembourg has been stable from 2007 to 2009 with volumes unof items changed in most segments, with the exception of unaddressed items growing 7 percent Segment 2005 2007 2009 and cross-border declining by about 20 percent. Addressed items 125 130 130 Luxembourg has not transposed Directive 2008/6. The country has the extended deadline of 31 December 2012. Letters 120 120 120 The areas of correspondence, direct mail and cross border outbound are protected by re- Correspondence 50 50 50 served area for sizes less than 50g.The postal markets in Luxembourg is fully opened in Direct mail - - - publications and unaddressed items. Publications 12 11 10 The NPO in Luxembourg has 95% of the market share in correspondence, 80-85% in Unaddressed items 130 140 150 publications and cross border outbound, while unaddressed items and parcels they have Cross-border outbound 60 55 45 50% and 25% respectively. Express < 1 < 1 < 1 Luxembourg has not had any competition cases related to postal service since 2007. Parcels 1 1 1 The NPO in Luxembourg is VAT exempt on all products. Total - - - Note: - means no answers in questionnaire Source: NRA,

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Indicator 17.1.3 Revenues from segments in total market, millions of Euro Indicator 17.2.3 VAT treatment of postal services Postal product Part of USO? VAT rate Express mail No Full rate of 15% 17.2. REGULATORY FRAMEWORK AND PRACTICES US mail products Yes Exemptions Non-US mail products No Exemptions Indicator 17.2.1 National regulatory framework Source: NRA, Ministry Question Yes/no Name of law Year of enactment Is postal law en- Yes Loi modifiée du 15 décembre 2000 sur les services 2000 (modified in 2002) Indicator 17.2.4 Services ensured as universal services under national law acted? postaux et les services financiers postaux Segment Defined as universal service by law? Are quality standards specified by law? Is Directive 2008/6 No transposed? Basic letter post Yes Yes Is there a law that defines… Bulk letters NRA: Not defined NRA: - Scope of USO? No NRA: Loi modifiée du 15 décembre 2000 sur les 2000 USP: Yes USP: Yes services postaux et les services financiers pos- Direct mail Yes, if addressed NRA: No taux USP: Yes if addressed Quality of USO? Yes 2001 Periodicals Yes, if addressed NRA: No USO rates? No USP: Yes, contractually defined USP accounts? No NRA: Loi modifiée du 15 décembre 2000 sur les 2000 Non-priority letters NRA: - - services postaux et les services financiers pos- USP: Yes taux Basic parcel post Yes NRA: Yes Reserved area? Yes Loi modifiée du 15 décembre 2000 sur les services 2000 (modified in 2002) USP: No postaux et les services financiers postaux Bulk parcels NRA: Not defined No Authorisation proce- No USP: Yes dures? Note: - means no answer in questionnaire Universal service No The USP and the NRA have answered differently on some questions fund? Source: NRA, USP User protection? No NRA: Loi modifiée du 15 décembre 2000 sur les services postaux et les services financiers postaux Indicator 17.2.5 Mechanisms to ensure provision of universal service Source: Ministry and NRA Question Answer Describe the role played by the three mechanisms: market forces, designa- No - Directive 2008/6 not trans- Indicator 17.2.2 Regulation of services based on new technologies tion* and public procurement. Are other safeguarding measures present? posed** Question Answer Note: *: There is a design of implementation of Directive 2008//EC. Are you aware of the presence of services based on new technologies in your market? For ex- No ample, hybrid mail or virtual delivery networks? **:The current postal law of December 15th 2000 na Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No communications as the Universal Service Provider

Source: NRA Source:2012. NRA, Ministry

mely designates Entreprise des Postes et Télé- – this will remain valid until December 31st

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Indicator 17.2.6 Legal mechanisms to ensure quality of universal service Indicator 17.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? No If yes, state services Remarks, experi- Annual measurement of quality of service? Yes NRA can impose other remedies? Yes e.g. letter post items, ences, problems Annual publication of results on quality of service No Services within universal services otherwise insert “No” encountered monitoring? What licensing procedure is used? - Directive 2008/6/EC Source: NRA not yet transposed! Which universal services are subject to individual license? None Indicator 17.2.7 Financing the net cost of universal service Which universal services are subject to general authorisation? Correspondence Are authorisation requirements published (transparent)? Yes Mechanism Yes/No Mechanism Yes/No Is the USP authorised under Art. 9*? - Directive 2008/6/EC Reserved area Yes Who contributes to the compensation fund? No not yet transposed! (Incumbent, competitors, other entities) Services outside universal services Answer Compensation fund No Public procurement No For which services is general authorisation required? All postal services Size of compensation fund N/A Direct compensation from public funds No For which services is an individual license required (ex ante approval)? No (if present, in Euro) Note: - means no answer in questionnaire Note: Direct compensation from public fu Source: NRA Source:*Article NRA 9 of Directive2008/6/EC

Indicator 17.2.8 Cost of universal service obligation and method for its calcula- nds includes subsidies and state aid. Indicator 17.2.10 Access to postal infrastructure ensured by Member States tion Access to: Yes/No Other conditions: Yes/No Question Answer Post codes No Change of address database No What is the cost estimate of USO? (if N/A Address database No USP return services No available, in Euro) What is the name of calculation ABC methodology (Activity Based Costing) with LRIC (Long Run Incre- Post office boxes No Street letter boxes No method? (if available) mental Cost) Delivery boxes No Sorting centres No Short description of calculation - Other conditions: Yes/No method (if available) Require downstream access to USP No Is a thorough documentation of calcu- USP: Yes lation method available? Where? Source: NRA Is calculation method approved by the USP: Yes NRA? Indicator 17.2.11 Involvement in competition cases since 2007 Does NRA calculate USO cost? No Case name Case status Postal product(s) con- Issue Note: - means no answers in questionnaire cerned Source: NRA, USP None Source: USP

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17.3. REGULATION OF PRICES AND ACCOUNTING Indicator 17.3.3 Cost accounting system of the USP Question Answer Indicator 17.3.1 Method of price regulation What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) ABC methodology, with both LRIC and FDC Segment Method Remark Is the cost accounting system approved by the National Regulatory Authority? Yes Basic letter post Ex ante For the first weight step in this service category, both national and export Assessment of the system (pros and cons) Bulk letters No Direct mail No - Periodicals No Note: LRIC = long run incremental costs.

Non-priority letter post N/A There is no non-priority mail offer by the USP Source: NRA

Basic parcel post No Bulk parcels No Indicator 17.3.4 Promoting access to and affordability of postal services Source: NRA Question Yes/No If yes, how? Non-discriminatory prices (Art. 12*) required? Yes By postal act, art. 20 Affordability (Art. 12*) defined in national law? No Directive 2008/6 not transposed Indicator 17.3.2 Accounting requirements Note: *) Article 12 of Directive 2008/6/EC Question Answer Question Answer Source: NRA Separation of accounts No. of up/down stream accounts - Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - 17.4. ROLE OF NRA No. of reserved product accounts 5 Transparency Unreserved product accounts required? Yes Independent body reviews USP accounts? - No. of unreserved product accounts 19 Last review of USP accounts 2004 Indicator 17.4.1: NRA powers Body reviewing USP accounts (Type of External audi- Task or power Yes/No Task or power Yes/No Application of tariff principles body) tor of the In- cumbent Require USP cost allocation system? Yes Levy fines? Yes Yes Fines levied since 1.1.2006 regarding data require- Bulk services within USO? No NRA issues statement of compliance? No Approve USP cost allocation system? No ments? Does USP conclude individual agreements? Yes Last publish statement of compliance N/A Review cost allocation to non-USO? Yes Seek court order? No Individual agreement: cost based price required Yes Publish cost allocation system? No Require data from USP (Art.22*)? Yes Cancel unlawful rates? Yes Individual agreement: NRA has cost data? N/A USP financial accounts audited? Yes Require data from non-USPs (Art.22*) No Set new rates for USP? Yes USP has special tariffs? Yes Last published financial accounts 2008 Require data studies? No Court orders sought since 1.1.2006 regarding data? Up- and downstream accounts? No No Note: - means no answers in questionnaire Require downstream access? No Source: NRA Note: *) Under Article 22 of Directive 2008/6/EC Source: NRA

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Indicator 17.4.2: NRA human and financial resources Indicator 17.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 870 User protection procedures in postal or con- Neither USP(s) required to issue annual report Yes sumer law? Number of total staff ? 2 (Of which, staff dealing with postal affairs) Enforcement by NRA or national consumer Neither NRA issues annual report No protection authority? Source of NRA budget Funds from state budget Applies to non-USP(s) in USO area? - Review of operator decision ensured Yes Who approves NRA budget - Applies to non-USO services Yes Agency reviewing operator NRA Note: - means no answers in questionnaire Remedies by competent national authority? - Source: NRA (maximum fine) Note: - means no answers in questionnaire Indicator 17.4.3: NRA independence Source: NRA Question Yes/No Question Answer Indicator 17.4.7 Indicator 17.4.8: Does the government have a formal right No Who, and under what conditions, can ap- Grand-Duke to guide NRA on policies? point NRA head? Some NRA decisions require governmen- No Who, and under what conditions, can Grand Duke 17.5. MARKET STRUCTURE AND COMPETITION tal support? dismiss NRA head?

Can government suspend NRA orders? No Minimum qualifications for NRA heads Yes Source: NRA Indicator 17.5.1:Information about the incumbent Question Answer Question Answer Name of incumbent Entreprise des Postes et Télé- Main activities Telecom, postal and postal Indicator 17.4.4 Complaint handling – appeal from NRA decisions communications (EPT) financial services Question Answer Question Answer Legal status Public law company Employment Mostly civil servants (> 80%) Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes State ownership (percent) 100% Source of financing - To whom is NRA decision appealed? - Number of NRA decisions reversed? 0 Note: - means no answers in questionnaire Note: - means no answers in questionnaire Source: USP Source: NRA Indicator 17.5.2 Incumbent profits, 2009, national currency Indicator 17.4.5 Enforcement of competition rules by NRA and cooperation with Statistic Value NCA Total profit in 2009 Cf below Question Yes/No Question Yes/No Percentage of profit coming from letter mail minor Who is the primary enforcer of competition rules? NRA NRA obliged to share info with NCA? No Percentage of profit coming from reserved area (if present) minor Note: ‘NCA’ national competition authority. Note: Entreprise des Postes et Té Source: NRA line, but only as a whole for the

activity of EPT), postal and financial services. Source: USP lécommunications (EPT) does not publish individual figures per business

entire company, all business lines

included, i.e. telecom (the main

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Indicator 17.5.3 Mail market segmentation Indicator 17.5.6 New entrants since 2008 Percentage opened to Subject to li- No new entrant competition cense / au- No. of sig- Source: NRA Under na- thorisation? nificant- Names of significant Actual Segment tional law (Yes/No) competitors competitors Addressed items Notification Indicator 17.5.7 Cross border mail Letters Main actors (if not re- Terminal dues regu- Correspon- Reserved 5% Belgian Post International, Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? dence area, 50g Deutsche Post, La Poste 36 million items per year Yes Belgian Post International, No (FR) Deutsche Post, La Poste (FR) Direct mail Reserved Notification Belgian Post International, Source: NRA area, 50g Deutsche Post, La Poste (FR) Publications 100% 100% Notification Dintec Indicator 17.5.8 Presence and role of mail consolidators in the market Unaddressed items 100% 100% Notification LuxDiffusion, Dintec Question Answer Cross-border out- Reserved 15% Notification Belgian Post International, bound area, 50g Deutsche Post, La Poste Are companies offering mail consolidation services present in the market? Yes (FR), Dintec How large is the turnover of mail consolidators in relation to the postal market? Minor Express 100% 100% Notification TNT, DHL, UPS, Fedex, Din- Have you handled any competition cases involving mail consolidator? No tec Source: NRA Parcels 100% 100% TNT, DHL, UPS, Fedex, Mi- chel Greco, Dintec Total Source: NRA

Indicator 17.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Approximate sum of market shares of 3 main competitors Segment Letter post (open area) 5% Parcels 50% Express 70% Unaddressed items 50% Source: NRA

Indicator 17.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the acquired Main objectives behind the ac- Date company company quisition None N/A N/A N/A Source: USP

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17.6. STRUCTURE OF MARKET DEMAND Indicator 17.6.3 Revenues and volumes generated by consumers vs. business customers in 2008, national currency, millions of items Indicator 17.6.1 Revenues and volumes generated by consumers vs. business Segment Business customers Private consumers Revenue Volume Revenue Volume customers in 2009, national currency, millions of items Addressed items (domestic) 36 77 25 44 Segment Business customers Private consumers Approximate Letters 33 71 25 43 Revenue Volume Revenue Volume market share in the total Correspondence N/A as per definition given in the 25 43 guidelines market Reserved area 29 66 21 40 Addressed items (domestic) confidential 108 confidential 16 95% Direct mail No data available No data available Letters confidential 102 confidential 14 95% Publications 2 6 Correspondence n/a as per definition given confidential 14 95% Unaddressed items 19 73 in the guidelines Cross-border mail outbound 19 25 15 13 Reserved area confidential 95 confidential 14 95% Express fully outsourced to our 50% subsidiary TNT Express-Luxembourg Direct mail not available n/a ? Parcels Domestic parcels of minor relevance (small country size) Publications confidential 6 n/a 80% Total 74 175 40 57 Unaddressed items confidential 82 n/a 50% Cross-border mail outbound confidential 31 confidential 2 85% Source: USP Express USP does not offer Express services Parcels Domestic parcels are of minor relevance, due to the 25% Indicator 17.6.4 Trends in mail substitution small country size. Short description (in bullet points) Total confidential 221 confidential 18 Source: USP. Note: values are approximate. • “The future growth potential appears to be limited in the next years due to economic decline (2009 GDP growth rate 3%) combined with high penetration rates of internet and broadband access” ITA/WIK (2009b) Indicator 17.6.2 • A progressive mail substitution has been going on for years. However, the financial crisis boosted it further and contributes to a notable and still ongoing decline of mail volumes. Source: USP

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Indicator 17.6.5 Effect of the financial crisis on revenues in 2009 17.8. SOCIAL AND CONSUMERS ASPECTS Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Indicator 17.8.1 Employment indicators, 2009 Less than 5% 5-15% more than 15% USP Addressed items (domestic) decline Employment (thousand), in full time equivalents 2.568, for the entire company of P&T Luxembourg (Post, Letters decline Telecom and Financial services) out of which 1.261 for the Correspondence decline sole postal business Reserved area decline Percentage of total country employment Direct mail decline Share of civil servants 89 % Publications decline Share of part time and temporary employment <1% Unaddressed items decline Share of outsourced and subcontracted employment Minor Cross-border mail outbound decline Source: USP Express decline Parcels Total Indicator 17.8.2 Wage and productivity indicators Source: USP Incumbent Wages as a proportion of total costs 38% for the entire company of P&T Luxembourg (Post, Telecom and Financial services) +- 65% for the sole postal business 17.7. PRICE PERFORMANCE: Average wage per hour (€) 33 EUR/hour Productivity measured by output per person employed Indicator 17.7.1 Public tariffs, 2004-2009 Source: USP Segment 2005 2007 2009 Single item: 20g tariff letter EUR 0,50 EUR 0,50 EUR 0,50 Single item: 100g priority mail EUR 1,00 EUR 1,00 EUR 1,00 17.9. TECHNOLOGICAL DEVELOPMENTS Single item: 500g insured and registered EUR 10,60 EUR 10,60 EUR 10,60 Single item: 1 kg parcel EUR 5,50 EUR 5,50 EUR 5,50 Bulk mail: composed of 20g letters Depends on volume Depends on volume Depends on volume and other criteria and other criteria and other criteria Indicator 17.9.1 Innovation, technology and new services Bulk mail: composed of 100g letters Depends on volume Depends on volume Depends on volume Service Do you offer? Volume Do you plan to offer? and other criteria and other criteria and other criteria Hybrid mail No N/A Yes Source: USP Virtual delivery of mail No N/A Yes Pick up locations for parcels (parcel shops) Yes < 10% Source: USP

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Indicator 17.9.2 Statistics on technological progress Indicator 17.9.6 The most important environmental initiatives implemented Indicator Value in 2009 Increase/decline since 2007 Brief answer (in bullet points) (percentage) (in percentage points) • Creation of a sustainable development project team, under the lead of the Director of the postal division Percentage of letter mail in the com- P&G formats P&G formats • Participation in the PostEurope and IPC greenhouse gas reduction and sustainable development programs munications' market 80% 70% • Construction of a national sorting centre in 2006 based on environmental criteria and using techniques such as rain water collection, solar panels etc. Similar criteria are applied for each new construction by the Percentage of letter mail and parcel parcels are processed 95% auto- parcels are processed 95% auto- mail subject to manual processing P&T group matically, i.e. 5% manually matically, i.e. 5% manually (e.g. sorting) • Purchase of “green electricity”

• Brochure on eco-driving techniques bulky mail is 100% automatically bulky mail is 100% automatically • Purchase of hybrid and LPG-gas cars as a pilot project processed, i.e. 0% manually processed, i.e. 0% manually • Current delivery vehicles are replaced by low emission vehicles Source: USP - Cooperation with and sponsoring of environmental NGO’s Source: USP Indicator 17.9.3 Supply of e-commerce services, total market Question Answer - Incumbent 17.10. QUALITY OF SERVICE DEVELOPMENTS Do you supply own e-commerce services? What kind? No

Source: USP Indicator 17.10.1 Transit time for domestic priority mail, 2009

D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 Indicator 17.9.4 Supply of hybrid mail services, total market dard (% actual dard (% actual dard (% actual dard (% actual Question Answer - Incumbent FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Do you supply hybrid mail or virtual delivery solutions? What kind? No 95 97.93 99 99.93 - - - - Source: USP Note: - means no answers in questionnaire Source: NRA

Indicator 17.9.5 Developments within networks and mail consolidation services Question Answer Have you carried out a major reorganisation of The number of regional distribution centres is in the process of your logistics network? For example, decentral- being progressively reduced from over 40 to 12. Furthermore, our ising, implementing hub & spoke systems? entire distribution network and postal routes have been subject to an in depth review in 2006, resulting in major efficiency gains. No further optimisation possible. Do you use different networks for letters and YES, as it allows to avoid that for example postmen have to deal parcels at collection, sorting, transportation or with numerous bulky parcels when distributing mail, especially delivery levels? What are the reasons? when on foot. What is the relative importance of road, rail and 100% road transport. air as modes of transportation for mail? Have these shares changed recently? Why? Source: USP

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Indicator 17.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 94.1 - - Note: - means no information Source: Ecorys (2008a)

Indicator 17.10.3 Quality of service indicators

Indicator Value Percentage of lost mail 0,000185% (in 2008) Number of postal outlets (post offices and agencies) and number of letter Total of 112 postal outlets, i.e. boxes per 10.000 inhabitants. 2,5/10.000 inhabitants Total of 1.168 letter boxes, i.e. 26/10.000 inhabitants The implementation of CEN standards. - Note: - means no answers in questionnaire Source: NRA

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18.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 18.1.1 Country facts Country facts Value Unit Year Population 0.4 Million 2010 Population growth 8.6 Percent 2000-2010

Population density 1,307 Pop. / km2 2010 Urbanisation rate 94.3 Percent 2008 GDP 7.6 PPS, billion 2009 GDP/capita 18,400 PPS 2009 Postal services to GDP ’99/09: 0.43%/0.40% Ratio 1998/2008

NRA Malta Communications Authority (MCA) NRA responsibilities? Authorisation, US rates, Uniform tariff rules, Special tariffs, USP accounts, Quality of US, Dealing with User complaints, investigating Cross subsidy in US, investigating Cross subsidy non-US Incumbent Malta Post p.l.c. Main activities of incumbent Postal Services Employment, incumbent 607 Source of financing Private Ownership Chapter 18 MALTA Source: ITA/WIK (2009) Country fiche, Eurostat, NRA

Box 18.1 – Country summary The volume of letters and cross-border outbond dropped by 15 and 19 percent, respectively, from 2007 to 2009. Express and parcels grew 50 percent in the same period. Malta has not transposed Directive 2008/6/EC, but is required to do so before its extended deadlines finishes on 31.12.2012. The process of transposition began already in 2009 and in is in progress. Correspondence, direct mail and cross-border outbound mail are postal segments where the Maltese NPO has reserved area of items less than 50g. Unaddressed items and express are fully open. The Maltese NPO has 99% of the market for correspondence and direct mail. For unaddressed items they have 97%. For express they have 15% of the market share. Malta has not had any postal competition cases since 2007. All products sold by the Maltese NPO are VAT exempted.

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Indicator 18.1.2 Volume of items delivered by segment in total market, millions Indicator 18.1.2 Revenues from segments in total market, millions of Euro of items Segment 2005 2007 2009 Segment 2005 2007 2009 Mail 13.63 16.18 17.1 Addressed items Express Unavailable Unavailable 7.77 Letters 76.97 48.56 41.37 Logistics - - - Correspondence - - - Financial 0.13 0.11 0.11 Bulk Mail 22.65 27.72 27.42 Others 3.34 2.56 3.36 Publications Unavailable Unavailable Unavailable Total Unaddressed itemsUnavailable Unavailable 17.87 Note: As regards the unaddressed mail items this includ Cross-border outbound 5.58 4.11 3.34 tors as there are other operators which are not regu Express 0.22 0.25 0.38 Parcels 0.03 0.04 0.06 The revenuepostal figure service. generated from mail items in Total bound mail items. Note: The Authority does not have figu The figure for the express mail items may also es only the figures given by licensed postal opera-

items” figure. lated by the MCA as this is not considered as a Figures fortinguish logistics between are not the currently two. being collected. Figures for direct mail are not avai Source: NRA cludes also the revenue from cross border out- which is being given here. res for ‘publications’ separately. Information for unaddressed mail items was not collected prior to 2009. Unaddressed items are not include freight items as some operators do not dis- considered as postal services. There may therefore lable separately. This is includ ing these services. This is included in the “addressed The figures that are collected for the express mail items may also include freight as some operators do not separate the two items. ed in the figure for bulk mail The figures given under the item ‘parcels’ exclude cr under the cross border outbound mail items. be other operators in the sector which are provid- Source: NRA

oss border outbound as these are being included

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18.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 18.2.2 Regulation of services based on new technologies Indicator 18.2.1 National regulatory framework Question Answer Are you aware of the presence of services based on new technologies in your market? For No Question Yes/ Year of enactment example, hybrid mail or virtual delivery networks? No (actual or expected) Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No Is postal law Yes 1975 enacted? http://docs.justice.gov.mt/lom/legislation/english/leg/vol_6/chapt254.pdf Source: NRA Is Directive No A consultation document has been issued in June 2009 by the Ministry responsible for 2008/6 postal services on proposed amendments to the postal legislative framework includ- transposed? ing the transposition of the said Directive. Indicator 18.2.3 VAT treatment of postal services https://mitc.gov.mt/MediaCenter/PDFs/1_MITC-Consultation%20Booklet.pdf Postal product Part of USO? VAT rate Legal basis Is there a law that defines… All postal services provided by the USP are currently exempt from VAT. Other postal ser-vice providers do charge Scope of Yes The Postal Services Act and the Postal Services (General) Regulations. A detailed VAT at the standard rate of 18%. USO? product list of the products that must be offered under the USO are annexed to the Source: NRA designated USP’s licence. This has been issued as subsidiary legislation http://docs.justice.gov.mt/lom/Legislation/English/SubLeg/254/14.pdf Quality of Yes There are general provisions found in the Postal Services Act (Ref to Art. 24-26 Indicator 18.2.4 Services ensured as universal services under national law USO? http://docs.justice.gov.mt/lom/legislation/english/leg/vol_6/chapt254.pdf ). The Authority then issues the quality of services targets that have to be achieved. Prior to Segment Defined as universal service by law? Are quality standards specified by law? issuing these targets the Authority consults with all the stakeholders involved. Basic letter post Yes Yes USO rates? Yes These are defined in the annex to the designated USP’s licence referred to above. Prior to changing any of these prices the USP must submit the prices for approval to Bulk letters Yes Yes the MCA. Direct mail Yes Yes USP ac- Yes The accounting procedures are defined in the third schedule of the Postal Services Periodicals Yes NRA: Yes counts? Act. The Authority has also through decision notices established the framework un- USP: No der which the USP shall implement cost accounting systems and prepare regulatory Non-priority letters No No separated accounts. (Ref: 2005 Decision: http://www.mca.org.mt/infocentre/openarticle.asp?id=628&pref=18 & 2009 Deci- Basic parcel post Yes Yes sion: http://www.mca.org.mt/infocentre/openarticle.asp?id=1341&pref=18 Bulk parcels Yes Yes Reserved Yes Refer to art.20 of the Postal Services Act. These are defined in detail in the fourth Note: The USP and the NRA have answered differently on some questions area? schedule of the same Act. Source: NRA, USP Authorisa- Yes Ref. to art. 8 of the Postal Services Act. tion procedures? Indicator 18.2.5 Mechanisms to ensure provision of universal service Universal No service Question Answer fund? Describe the role played by the three mecha- Currently the provision of universal services in Malta is ensured User protec- Yes The Postal Services Act (Ref. to art. 81(2)(c)) gives the power to the Minister after nisms: market forces, designation and public through the designation of a universal service provider. Presently, tion? consultation with the Authority to issue regulations for the better protection of the procurement. Are other safeguarding meas- this is the only safeguarding mechanism provided at law. interests of users of the postal services and for the establishment of any criteria or ures present? procedures to be followed by postal operators in the handling of complaints. The USP’s licence also specifies other user protection measure such as compensation, Source: NRA, Ministry complaints handling, and mail integrity measures. Other spe- Yes The fifth schedule of the VAT Act (Chapter 406 of the Laws of Malta) which exempts cial rights from the charging of VAT “the supply of public postal services”. (which)? Note: - means no information Source: NRA, Ministry

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Indicator 18.2.6 Legal mechanisms to ensure quality of universal service Indicator 18.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Services within universal services If yes, state services e.g. letter post Annual measurement of quality of service? Yes NRA can impose other remedies? Yes items, otherwise insert “No” Annual publication of results on quality of service Yes What licensing procedure is used? Individual licenses monitoring? Which universal services are subject to individual license? All the universal services are subject to individ- Source: NRA ual licenses. Which universal services are subject to general authorisation? None Indicator 18.2.7 Financing the net cost of universal service Are authorisation requirements published (transparent)? Yes Mechanism Yes/No Mechanism Yes/No Is the USP authorised under Art. 9*? - Reserved area Yes Who contributes to the compensation fund? N/A Services outside universal services Answer (Incumbent, competitors, other entities) For which services is general authorisation required? All services falling outside the scope of the Compensation fund No Public procurement No universal services Size of compensation fund N/A Direct compensation from public funds No For which services is an individual license required (ex ante ap- Services falling outside the scope do not re- (if present, in Euro) proval)? quire a license. Source: NRA Note: - means no answers in questionnaire

Indicator 18.2.8 Cost of universal service obligation and method for its calcula- Source:*Article NRA 9 of Directive2008/6/EC tion Question Answer Indicator 18.2.10 Access to postal infrastructure ensured by Member States What is the cost estimate of USO? (if USP: 2008 : €12.8 million Access to: Yes/No Other conditions: Yes/No available, in Euro) NRA: Presently the cost of the USO is not calculated Post codes Yes Change of address database Yes What is the name of calculation USP: Activity Based Address database Yes USP return services Yes method? (if available) Post office boxes Yes Street letter boxes Yes Short description of calculation USP: Volume driven costs method (if available) Delivery boxes Yes Sorting centres Yes Is a thorough documentation of calcu- USP: Internally only Other conditions: Yes/No lation method available? Where? Require downstream access to USP Yes Is calculation method approved by the USP: Explained to NRA, mostly approved NRA? Note: The MCA in December 2009 issued a Decision Notice Note: The Ministry and the NRA have Source: NRA, USP (http://www.mca.org.mt/infocentr mum standards setting out the duties and obligation aging common operational issues in a multi-operator answered differently on some questions postal infrastructure should be e/openarticle.asp?id=1378&pref= tion information and access to private delivery bo offers on how access to this infrastructure should granted (incl. sharings of of licensed postcode postal op Source:by NRA law to grant access. 18)introducing a set of mini- environment. This included how access to erators relating to man- xes). The USP was direct information, sharing of redirec- be granted. Postal Service Providers are required

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Indicator 18.2.11 Involvement in competition cases since 2007 Indicator 18.3.3 Cost accounting system of the USP Postal product(s) con- Question Answer Case name Case status cerned Issue What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) None Source: USP Is the cost accounting system approved by the National Regulatory Authority? Yes Assessment of the system (pros and cons)

- 18.3. REGULATION OF PRICES AND ACCOUNTING Note: - means no answers in questionnaire

Indicator 18.3.1 Method of price regulation Source:FAC NRA, = fullyUSP allocated cost accounting Segment Method Remark Basic letter post Ex ante For all items in this service category Indicator 18.3.4 Promoting access to and affordability of postal services Bulk letters Ex ante Question Yes/No If yes, how? Direct mail Ex ante For all items in this service category Non-discriminatory prices (Art. 12*) required? Yes - Periodicals Ex ante For all items in this service category Affordability (Art. 12*) defined in national law? No - Non-priority letter post N/A Note: - means no answers in questionnaire Basic parcel post Ex ante For all items in this service category Article 12 of Directive 2008/6/EC Bulk parcels Ex ante Source: NRA, Ministry Source: NRA 18.4. ROLE OF NRA Indicator 18.3.2 Accounting requirements Question Answer Question Answer Indicator 18.4.1: NRA powers Separation of accounts No. of up/down stream accounts N/A Task or power Yes/No Task or power Yes/No Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - Require USP cost allocation system? Yes Levy fines? Yes No. of reserved product accounts 1 Transparency Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- No Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes ments? No. of unreserved product accounts 4 Last review of USP accounts FY 08 Review cost allocation to non-USO? Yes Seek court order? Yes Body reviewing USP accounts (Type of body) Firm em- Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes Application of tariff principles ployed by Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? Yes USP Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Bulk services within USO? Yes NRA issues statement of compliance? As from FY Require downstream access? No Does USP conclude individual agreements? No 09 Note: *) Under Article 22 of Directive 2008/6/EC Individual agreement: cost based price required N/A Last publish statement of compliance N/A Individual agreement: NRA has cost data? N/A Publish cost allocation system? No Source: NRA USP has special tariffs? No USP financial accounts audited? Yes Up- and downstream accounts? N/A Last published financial accounts 2008 Note: - means no information Source: NRA

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Indicator 18.4.2: NRA human and financial resources Indicator 18.4.5 Enforcement of competition rules by NRA and cooperation with Question Answer NCA Question Yes/No Question Yes/No Size of budget? (€ thousands) 233 (this refers to the budget for the budget for 2010) Who is the primary enforcer of com- The Director of Office of NRA obliged to share info Yes – as required by Number of total staff ? 3 (full time equivalent) petition rules? Fair Competition with NCA? law (Of which, staff dealing with postal affairs) Source: NRA Source of NRA budget General budget of the State or government and fees collected from postal operators generally Who approves NRA budget Ministry responsible for postal services Indicator 18.4.6 Regulation of user protection procedures and remedies Source: NRA Question Answer Question Answer User protection procedures in postal Both USP(s) required to issue annual re- Yes or consumer law? port Indicator 18.4.3: NRA independence Enforcement by NRA or national con- Both NRA issues annual report This is included as part Question Yes/No Question Answer sumer protection authority (NCPA)? of the NRA’s annual Does the government have a formal right to Yes* Who, and under what conditions, can Minister** report guide NRA on policies? appoint NRA head? Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Some NRA decisions require governmental Yes Who, and under what conditions, can Minister*** Applies to non-USO services Agency reviewing operator support? dismiss NRA head? Yes Several government agencies Can government suspend NRA orders? No Minimum qualifications for NRA heads No Remedies by competent national au- - thority? (maximum fee) Note: *) Provided that the Minister may give the MCA Note: - means no answers in questionnaire Source: NRA consistent Art. 6 of with the theMalta law Communi on the policy to be followe http://docs.justice.gov.mt/lom/legislation/english/leg/vol_13/chapt418.pdf law. **) The Minister appoints the Chairman and members of the Board governing MCA for a term of Indicator 18.4.7 Main issues of discussion between NRA and USP between 1 to 3 years. The appointment can be re cations Authority Act [cap. 418 of the Laws of Malta Issue (Short description in bullet points) ***) The Minister if he considers the persondirections in qu in writing of a general character not in- NRA: Source:properly NRA performing his duties’. d by the MCA in the exercise of its functions at • T+1 Quality of service measurement and monitoring of standards (dealing with misdelivery and lost mail). • Other aspects of quality of service and consumer complaints handling • Tariff rebalancing in preparation for full market opening newed for similar terms. [see art.3 of Cap.418] • Correct implementation of postal service schemes and their review

Indicator 18.4.4 Complaint handling – appeal fromestion NRA to be ‘unfit’decisions or has become ‘incapable of • Monitoring of mail integrity and related incidents. Question Answer Question Answer • Particular amendments to existing postal services legislation. The Government issued a consultation on amendments required to the existing Postal legislative framework. The USP made its submissions to Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes both the Government and the NRA. To whom is NRA decision ap- Specialized board Number of NRA decisions re- 1– decision was con- USP: pealed? of appeals * versed? firmed by Court of • Definition of cost accounting principles Appeal • Pricing of products in the Universal Service Note: *) Communications Appeals Board. There is a righ • Other obligations related to the provision of the Universal Service, such as integrity of mail, customer care and access • Terms and conditions of services under the Universal Service Appeals Board on a point of law to Source: NRA Source: NRA, USP

the Court of Appeal [inferior] t of further appeal from a decision of the said

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Indicator 18.4.8: NRA relations with customer associations Indicator 18.5.3 Mail market segmentation Example of relation Short description (in bullet points) Percentage opened Subject No. of Periodical meetings are held with this association, though In Malta there is only one consumer association to competition to li- signifi- these have generally focused on issues related to elec- (Ghaqda Konsumaturi Maltin). This is a member of cense / cantcom Under na- tronic communications. The MCA when issuing consulta- Consumers International and BEUC. This association Actual authori- petitors tions which relate to postal services and impact consumers deals with all issues concerning consumers and is cur- Segment tional law sation? Names of significant competitors does seek the views of this consumer association. rently staffed by unpaid volunteers. Addressed items Source: NRA Letters Reserved Low - Yes 1 Premiere Post Ltd. ** area. 50g 0.4% * Correspondence Reserved Low - 18.5. MARKET STRUCTURE AND COMPETITION area. 50g 0.4% Direct mail Reserved Low - Yes area. 50g 0.4% Indicator 18.5.1:Information about the incumbent Publications Yes Question Answer Question Answer Unaddressed items 100% 2.7% Not con- 1 Premiere Post *** sidered Name of incumbent MaltaPost p.l.c. Main activities Postal Services postal services Legal status Public Liability Company Employment 607 Cross-border out- Reserved Low State ownership (percent) 0% Source of financing Private Ownership bound area. 50g Source: USP

Express 100% 85% Yes 3 DHL, C&C and Airswift Indicator 18.5.2 Incumbent profits, 2009, national currency Parcels Low Yes Statistic Value Total Total profit in 2009 € 1.9 Million Note: * Includes both correspondence and direct mail.

Percentage of profit coming from letter mail Confidential **This entity provides a particul Percentage of profit coming from reserved area (if present) Confidential *** Therespite may the be reservedother providers area. operating in this Source: USP

Source:This NRA figure may therefore notar be form of registered mail prod

Indicator 18.5.4 Sum of market shares of 3 main competitors (excl. incumbent) uct which has been liberalised de- Segment Approximate sum comprehensiveof market shares for theof 3sector. main competitors area which are not postal service providers. Letter post (open area) 0.4% Parcels 0% Express 72.18% Unaddressed items 2.7% - This refers to the figures provided by the other licensed Postal service providers. Since unaddressed items are not considered as postal services there may be other providers operating in the sector. Source: NRA

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Indicator 18.5.5 Mergers and acquisitions of incumbent since 2007 18.6. STRUCTURE OF MARKET DEMAND Name of acquired Main activities of the acquired Main objectives behind the ac- Date company company quisition No mergers Indicator 18.6.1 Revenues and volumes generated by consumers vs. business Source: USP customers in 2009, national currency, millions of items Segment Business customers Private consumers Approximate mar- Indicator 18.5.6 New entrants since 2008 Revenue Volume Revenue Volume ket share in the total market Segment No. of End-to-end or Name Approximate Addressed items (domestic) - - - - en- market share up/downstream trants competition? Letters (including Correspondence) - - - - +99.99% Mail 1 Data not yet End to end On the 3rd February 2010 DHL International Correspondence - - - - available. Ltd. has been granted a license to provide Reserved area - - - - non reserved services within the scope of the Direct mail 0.404 1.7 - - universal service. Publications 0.5 1.9 - - Express 3 6.38% End to end competi- X-Press Logistics Ltd, Aramex Ltd, Gozo tion Channel Co. Ltd Unaddressed items 0.4 17.3 - - Logistics Cross-border mail outbound - - - - < 100% Financial Express - - - - 10.31% Others Parcels - - - - 33% Source: NRA Total Note: - means no answers in questionnaire Source: USP Indicator 18.5.7 Cross border mail Indicator 18.6.2: Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Indicator 18.6.3 Revenues and volumes generated by consumers vs. business 3.34 million mail item Up to 50g reserved for the USP Yes customers in 2008, national currency, millions of items Source: NRA Segment Business customers Private consumers Revenue Volume Revenue Volume Indicator 18.5.8 Presence and role of mail consolidators in the market Addressed items (domestic) - - Letters - - - - Question Answer Correspondence - - - - Are companies offering mail consolidation services present in the market? No Reserved area - - - - How large is the turnover of mail consolidators in relation to the postal market? - Direct mail 0.488 1.85 - - Have you handled any competition cases involving mail consolidator? - Publications 0.320 1.62 - - Note: - means no answers in questionnaire Unaddressed items 0.474 17.40 - - Source: NRA Cross-border mail outbound - - - - Express - - - - Parcels - - - - Total Note: - means no answers in questionnaire Source: USP

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Indicator 18.6.4 Trends in mail substitution Indicator 18.8.2 Wage and productivity indicators Short description (in bullet points) Incumbent • “Letter post volume has not substantially changed over time despite of increasing per capita income. Emerg- Wages as a proportion of total costs 58.5% ing electronic alternatives have possibly limited the development: Malta has relatively high penetration Average wage per hour (€) €6.23 shares of internet and broadband access of households” ITA/WIK (2009b) Source: USP Source: USP

Indicator 18.6.5:

18.7. PRICE PERFORMANCE:

Indicator 18.7.1 Standard public tariffs, 2005-2009, national currency Segment 2005 2007 2009 Single item: 20g tariff letter (up to 50g) LM0.07 (€0.16) €0.19 €0.19 Single item: 100g priority mail LM0.11 (€0.26) €0.26 €0.26 Single item: 500g insured and registered LM0.64 (€1.49) €1.47 €1.47 Single item: 1 kg parcel LM0.50 (€1.16) €1.16 €1.16 Bulk mail: composed of 20g letters (up to 50g) LM0.07 (€0.16) €0.19 €0.19 Bulk mail: composed of 100g letters LM0.11 (€0.26) €0.26 €0.26 Source: USP

18.8. SOCIAL AND CONSUMERS ASPECTS

Indicator 18.8.1 Employment indicators, 2009 USP Employment (thousand), in full time equivalents 0.594 Percentage of total country employment Share of civil servants 0 Share of part time and temporary employment 71 Share of outsourced and subcontracted employment 0 Source: USP

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18.9. TECHNOLOGICAL DEVELOPMENTS Indicator 18.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent Do you supply hybrid mail or virtual delivery solutions? What kind? No Indicator 18.9.1 Innovation, technology and new services If yes, how many years have you been supplying these services for? No Service Do you offer? Volume (million of items) Do you plan to offer? What share of turnover do you generate from hybrid mail and/or virtual delivery solu- No Hybrid mail - - Yes tions? What is the trend? Virtual delivery of mail - - Yes Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes Source: USP Pick up locations for parcels - Not applicable Yes (parcel shops) Note: - means no answers in questionnaire Indicator 18.9.5 Developments within networks and mail consolidation services Source: USP Question Answer Have you carried out a major reorganisation of your logistics network? Yes For example, decentralising, implementing hub & spoke systems? Indicator 18.9.2 Statistics on technological progress Do you use different networks for letters and parcels at collection, Yes, we use different networks, including Indicator Value in Increase/decline sorting, transportation or delivery levels? What are the reasons? 2009 since 2007 Branches, due to different type of items handled Percentage of letter mail benefiting from automated processing (e.g. sorting) 0% 0% What is the relative importance of road, rail and air as modes of Road – 100% for Local Mail Percentage of parcels benefiting from automated processing (e.g. sorting) 0% 0% transportation for mail? Have these shares changed recently? Why? Rail – 0% Source: USP Air – 100% for International Mail Source: USP Indicator 18.9.3 Supply of e-commerce services, total market Question Answer - Incumbent Indicator 18.9.6 The most important environmental initiatives implemented Do you supply own e-commerce services? What kind? No Brief answer (in bullet points) What share of turnover do you generate from own e-commerce services? What is the No • Electric vehicles trend? • Recycling initiatives What own e-commerce services do you plan to develop? Confidential • Energy audits for consumption control Are you able to indicate how the percentage of your turnover that originates from or No Source: USP is related to third-party e-commerce transactions (e.g. purchases on the internet) Source: USP 18.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 18.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 92 95.13 97 99.13 99 99.93 - - Note: - means no answers in questionnaire Source: NRA

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Indicator 18.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 92 94.1 Note: - means no information Source: NRA

Indicator 18.10.3 Quality of service indicators Indicator Value Percentage of lost mail Not measured Number of postal outlets (post offices and agencies) and number of letter boxes per 10.000 12.67* inhabitants. The implementation of CEN standards. Yes Note: As regards the number of postal outlets (post

10,000 inhabitants we have estimated this on the ba Source:figure NRA includes also the access points of all the postal service providers.

offices and agencies) and number of letterboxes per

sis of the data available by the Authority. This

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19.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 19.1.1 Country facts Country facts Value Unit Year Population 16.6 Million 2010 Population growth 4.5 Percent 2000-2010 Population density 399 Pop. / km2 2010 Urbanisation rate 81.9 Percent 2008 GDP 508 PPS, billion 2009 GDP/capita 30,700 PPS 2009 Postal services to GDP ’99/09: 0.99%/0.79% Ratio 1998/2008 NRA Onafhankelijke Post en Telecommunicatie Autoriteit (OPTA) NRA responsibilities? Registration, Evaluation of net cost of USO , US rates, Special tariffs, USP accounts, Quality of US, User complaints, dispute settlement of access requirements Incumbent TNT Post Main activities of incumbent Collection and delivery of postal items Chapter 19 Employment, incumbent Labour contracts Source of financing Private capital: stocks and bonds Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

NETHERLANDS Indicator 19.1.2 Volume of items delivered by segment in total market, millions Box 19.1 – Country summary of items The volume of addressed items fell by approximately 6.5 percent from 2007 to 2009, Segment 2005 2007 2009 while the volume of express items increased by over 8 percent. Addressed items 5574* 5401 5042 Netherlands has already transposed Directive 2008/6/EC as of April 2010. Letters 4849 - All Dutch postal market segments have been fully opened for competition legally. Correspondence 2453 - 2901 The Dutch NPO, TNT Post, has almost total market share in correspondence and a large Direct mail 2397 - 1288 part of the market in direct mail, publications, and unaddressed items. The cross border Publications 725 - 853 outbound is a very competitive market segment. Unaddressed items - - - USO fund set up, but not yet activated, to compensate TNT for net cost of USO. Cross-border outbound - - - Since 2007 there has been two competition case related to postal service. One ongoing Express 197 216 235 where TNT post is accused of predatory pricing and one closed, also dealing with predatory pricing. Parcels 100 (2004 data) - - The Dutch NPO is VAT exempted on all USO products. Total - - Note: - means no answers in questionnaire

Source:*) NRA, 2005 RBB and 2007Postmarktmonitor volume of top (express 3 companies data).

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Indicator 19.1.2 Revenues from segments in total market, millions of Euro Segment 2005 2007 2009 Indicator 19.2.2 Regulation of services based on new technologies Mail 2647 2551 2,658.0 Question Answer Express - - - Are you aware of the presence of services based on new technologies in your market? For ex- Yes Logistics - - - ample, hybrid mail or virtual delivery networks? Financial - - - Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No Others - - - Source: NRA Total 2647 2551 2,658.0* Note: - means no answers in questionnaire Indicator 19.2.3 VAT treatment of postal services Postal product Part of USO? VAT rate Legal basis Source:*) NRA Turnover of USP from postal and related services, domestic. NRA: Postal products with single item tariffs (letters, parcels) Yes VAT exempted Postal Law and international postal products (single items and bulk) for USP 19.2. REGULATORY FRAMEWORK AND PRACTICES Ministry: All Universal service products 19% Ministry: Note: domestically the universal service is limited to products with single piece tariffs. Indicator 19.2.1 National regulatory framework Source: NRA, Ministry Question Yes/No Name of law Year of enactment Remarks Is postal law enacted? Yes - 2009 Indicator 19.2.4 Services ensured as universal services under national law Is Directive 2008/6 Yes - transposed? Segment Defined as universal service by law? Are quality standards specified by law? Is there a law that defines… Basic letter post Yes Yes Scope of USO? Yes - 2009 Bulk letters No No Quality of USO? Yes - 2009 Direct mail No No USO rates? Yes - 2009 Periodicals No No USP accounts? Yes - 2009 Non-priority letter s No No Reserved area? No - Basic parcel post Yes No Authorisation proce- Ministry: Registration - Bulk parcels No No dures? NRA: No Source: NRA, USP Universal service fund? Ministry: Yes - NRA: No User protection? Ministry: Yes, will be - NRA: Required com- established if neces- plaints procedure sity arises NRA: No Note: - means no answers in questionnaire The Ministry and the NRA have answered differently on some questions Ministry :There is a procedure for registration. Ev

sal service fund: there is a provision in the Postal tors have to adopt a procedure fo Source:garding NRA, Ministrythe Postal Conveyance Services it provides. ery postal operator is obliged to register. Univer- r dealing with complaints expresse Act for compensation of net costs. Postal opera- 180 d by senders and recipients re-

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Indicator 19.2.5 Mechanisms to ensure provision of universal service Indicator 19.2.7 Financing the net cost of universal service Question Answer Mechanism Yes/No Mechanism Yes/No Describe the NRA: Reserved area No Who contributes to the compensation fund? N/A role played by Designation of USP for providing US. Other market parties may of course offer the services be- (Incumbent, competitors, other entities) the three longing to the universal services, but at this moment as far as we know, this is nit the case Compensation fund Yes, will be established Public procurement No mechanisms: Ministry: if necessary market forces, For the time being TNT post BV is designated as the universal service provider. Size of compensation fund N/A Direct compensation from public funds No designation and There are conditions fixed to provide for another operator and a selection procedure in article 15 (if present, in Euro) public procure- of the Postal Act. ment. Are other Section 4.2. Appointment of the Provider of the Universal Postal Service Source: NRA safeguarding Article 15 measures pre- 1. On the basis of a transparent selection procedure, Our Minister shall ap-point a Postal sent? Conveyance Company to operate the Universal Postal Service or part thereof for an indefinite Indicator 19.2.8 Cost of universal service obligation and method for its calcula- period of time. 2. Our Minister may withdraw such appointment, either wholly or partly, if: tion a. the proper provision of the Universal Postal Service, or part thereof, is no longer Question Answer guaranteed; b. a Universal Postal Service Provider has indicated pursuant to Article 30(1) that the What is the cost estimate of USO? (if N/A, confidential provision of that service will involve net costs; available, in Euro) c. the appointed Postal Conveyance Company so requests; What is the name of calculation Legal requirement for Activity Based Costing d. another Postal Conveyance Company has indicated that it wishes to op-erate the method? (if available) Universal Postal Service. 3. Our Minister shall announce the intention to withdraw the said ap-pointment, in part or in Short description of calculation No whole, to the appointed Postal Conveyance Company and shall publish that intention in the method (if available) Government Gazette. Is a thorough documentation of calcu- Yes, at TNT Post 4. The appointment shall not be withdrawn before a Postal Conveyance Company has been lation method available? Where? appointed to provide the Universal Postal Service or the specific part that is to be withdrawn Is calculation method approved by the NRA has no authority for approval but NRA can enforce the obligations of to which the appointment relates. NRA? legally required calculation method. Approval is required and obtained 6 from an independent accountancy firm, assigned by the NRA 5. A Postal Conveyance Company from which the appointment is withdrawn shall be obliged to participate in the selection procedure. Does NRA calculate USO cost? N/A, confidential 6. No applicant shall be appointed to provide the Universal Postal Service that cannot be expected to provide that service in the proper manner. Note: NRA: “We assume these questions relate to net co 7. Specific rules for the selection procedure shall be set by a general administrative order. 8. A general administrative order to be determined pursuant to paragraph 7 of this article USO fund-provision (yet), the answers we could give in this paragraph would be highly specula- shall not be promulgated until at least four weeks have lapsed since the presentation of the Source:tive” NRA, USP draft to both houses of the States General. Source: NRA, Ministry st of the USO. Because We don’t actually have a Indicator 19.2.6 Legal mechanisms to ensure quality of universal service Mechanism Yes/No Mechanism Yes/No NRA sets monitoring standards? No NRA can fine USP(s)? Yes Annual measurement of quality of service? Yes NRA can impose other remedies? Administratve measures Annual publication of results on quality of ser- Yes vice monitoring? Source: NRA

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Indicator 19.2.9 Authorisation/licensing for services within and outside universal Indicator 19.2.11 Involvement in competition cases since 2007 service area Postal product(s) Case name Case status concerned Issue Services within universal ser- If yes, state services e.g. letter Remarks, experiences, prob- vices post items, otherwise insert “No” lems encountered 6207BEMP Sandd Ongoing - Appeal by Sandd against Mail of Netwerk VSP Dominance. Accused of versus TNT Post decision of Competition Authority predatory pricing What licensing procedure is used? Designation of USP. Registration for all Registration required regardless Netwerk VSP Gead- Closed Mail delivery Predatory pricing, tying postal providers whether postal services are within resseerd B.V. vs. TNT and bundling, exclusive or outside universal service long-term contracts, and Which universal services are subject None price discrimination to individual license? Source: USP Which universal services are subject All. Registration of postal providers to general authorisation? (see above). Are authorisation requirements N/A published (transparent)? 19.3. REGULATION OF PRICES AND ACCOUNTING Is the USP authorised under Art. USP designated 9*? Indicator 19.3.1 Method of price regulation Services outside universal services Answer For which services is general authorisation required? None Segment Method Remark For which services is an individual license required (ex ante approval)? No Basic letter post Ex ante Note: - means no information Bulk letters N/A Direct mail N/A Source:*) NRA Article 9 of Directive2008/6/EC Periodicals N/A Non-priority letter post N/A Indicator 19.2.10 Access to postal infrastructure ensured by Member States Basic parcel post Ex ante Bulk parcels N/A Access to: Yes/No Other conditions: Yes/No Source: NRA Post codes Yes Change of address database Yes Address database No USP return services Yes Post office boxes Yes Street letter boxes No Delivery boxes No Sorting centres No* Other conditions: Yes/No Require downstream access to USP No Note: *) Conditional access (sorting centres of downst

Source:provided NRA to (large volume) customers by postal

ream access) for postal pr operator with network for 5 days delivery

oviders only if access is

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Indicator 19.3.2 Accounting requirements 19.4. ROLE OF NRA Question Answer Question Answer Separation of accounts No. of up/down stream accounts N/A Indicator 19.4.1: NRA powers Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA N/A Task or power Yes/No Task or power Yes/No No. of reserved product accounts N/A Transparency Require USP cost allocation system? Legal framework Levy fines? Yes Unreserved product accounts required? No Independent body reviews USP accounts? N/A Approve USP cost allocation system? No Fines levied since 1.1.2006 re- Yes No. of unreserved product accounts N/A Last review of USP accounts 2007 garding data requirements? Application of tariff principles Body reviewing USP accounts (Type of body) Firm em- Review cost allocation to non-USO? No Seek court order? Yes ployed by Bulk services within USO? No Require data from USP (Art.22*)? Yes, only concerning legal re- Cancel unlawful rates? No USP quirements Does USP conclude individual agreements? Yes NRA issues statement of compliance? No Require data from non-USPs (Art.22*) Yes, only concerning legal re- Set new rates for USP? No Individual agreement: cost based price required None Last publish statement of compliance 2006 quirements Individual agreement: NRA has cost data? No Publish cost allocation system? No Require data studies? Yes Court orders sought since Yes, see 1.1.2006 regarding data? above USP has special tariffs? Yes USP financial accounts audited? Yes Require downstream access? No, conditional access by law Up- and downstream accounts? No Last published financial accounts 2007 Note: *) Under Article 22 of Directive 2008/6/EC Source: NRA Source: NRA

Indicator 19.3.3 Cost accounting system of the USP Indicator 19.4.2: NRA human and financial resources Question Answer Question Answer What type of cost accounting system According to description of USP: FAC, Direct costs are directly attributed Size of budget? (€ thousands) 499 does the USP use? (e.g. LRIC, FAC) to services, indirect costs are attributed to USO/non-USU with the help Number of total staff ? 152 (2008), of activity based costing (ABC) (Of which, staff dealing with postal affairs) 5 FTE (2010) Is the cost accounting system approved Yes by the National Regulatory Authority? Source of NRA budget Fees collected from the National USP and from other postal operators Assessment of the system (pros and cons) Who approves NRA budget Ministry of Economic Affairs (responsible for postal services) Level of detail is low. Regulation only requires cost attribution to categories of services and indirect costs are only Source: NRA available on the level of USO/non-USO. Direct confrontation of costs and tariffs on individual service level is impossible. Note: FAC = fully allocated cost accounting Indicator 19.4.3: NRA independence Source: NRA, USP Question Yes/No Question Answer Can government guide NRA No Who, and under what condi- Ministry of economic affairs, once every on policy? tions, can appoint NRA head? 4 years Indicator 19.3.4 Promoting access to and affordability of postal services Some NRA decisions require No Who, and under what condi- Minister of eco-nomic affairs. Conflict- Question Yes/No If yes, how? governmental support? tions, can dismiss NRA head? ing interests, dysfunction. Based on OPTA-law Non-discriminatory prices Yes Conditional: IF the incumbent offers any retail customer(s) access to (Art. 12*) required? (lower parts of) the network, THEN it has to offer the same form of access Can government suspend No Minimum qualifications for No at the same conditions to competitors. NRA orders? NRA heads Affordability (Art. 12*) de- No - Source: NRA fined in national law? Note: - means no answers in questionnaire *) Article 12 of Directive 2008/6/EC Source: NRA, Ministry

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Indicator 19.4.4 Complaint handling – appeal from NRA decisions Indicator 19.4.8: NRA relations with customer associations Question Answer Question Answer Example of relation Short description Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Consumer authority OPTA is part of Consuwijzer, a common counter for consumer problems. Association of large postal customers There is one, but OPTA has no formal connection to it. To whom is NRA decision appealed? Court Number of NRA decisions reversed? 2* Source: NRA Source: NRA *OPTA’s decisions on the postal market have been reversed twice: in December 2006 and in July 2010. In both cases OPTA required TNT to provide certai 19.5. MARKET STRUCTURE AND COMPETITION lenged this in court, and won. The decisions had noth tomers. Indicator 19.5.1:Information about the incumbent Indicator 19.4.5 Enforcement of competition rules by NRA and cooperation with Question Answer Question Answer n information (on contracts, or on costs). TNT chal- NCA Name of incumbent TNT Post Main activities Collection and delivery of postal items ing to do with complaints by market parties or cus- Legal status BV Employment Labour contracts Question Yes/No Question Yes/No State ownership (percent) 0% Source of financing Private capital: stocks and bonds Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Source: USP Note: ‘NCA’ national competition authority. Source: NRA Indicator 19.5.2 Incumbent profits, 2009, national currency Indicator 19.4.6 Regulation of user protection procedures and remedies Statistic Value Question Answer Question Answer Total profit in 2009 € 472 M Percentage of profit coming from letter mail N/A Not available User protection procedures in Requirement of complaints USP(s) required to issue annual Yes postal or consumer law? procedure in postal law report Percentage of profit coming from reserved area (if present) None Source: USP Enforcement by NRA or national NRA for complaints proce- NRA issues annual report Yes consumer protection authority? dure Applies to non-USP(s) in USO area? Yes for complaints Review of operator decision en- No sured Applies to non-USO services Yes, for complaints Agency reviewing operator None Remedies by competent national Administrative measures authority? (maximum fine) and fines Source: NRA

Indicator 19.4.7 Main issues of discussion between NRA and USP Issue (Short description in bullet points) NRA: • Currently cost allocation in context of cost oriented tariffs

USP: • NRA refuses to set the starting tariffs for the USO as of 1 October 2009. The NRA wants more information on the accounting of the costs Source: NRA

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Indicator 19.5.3 Mail market segmentation Indicator 19.5.6 New entrants since 2008 Percentage opened to Subject to li- Segment No. of Approximate End-to-end or Name No. of sig- competition cense / au- Names of significant entrants market share up/downstream com- Segment nificant Under na- thorisation? competitors petition? Actual competitors tional law (Yes/No) Mail c.a. 7 Very small End-to-end and down- Largest 3: MetroPost Twente, stream (mainly local) Op/maat, Akin Transport Brabant Addressed items 100% Emerging Registration 3* TNT Post (+ Netwerk VSP), Sandd, DHL Global Mail Express - - - - Letters 100% Emerging Registration TNT Post (+ Netwerk VSP), Logistics - - - - Sandd, DHL Global Mail Financial - - - - Correspon- 100% Emerging Registration 3 (mainly bulk) TNT Post Others - - - - dence Source: NRA Direct mail 100% Substantial Registration 3 TNT Post (+ Netwerk VSP), Sandd, DHL Global Mail Publications 100% Substantial Registration 3 TNT Post +? Indicator 19.5.7 Cross border mail Unaddressed items 100% Substantial No >>3 TNT Post +? Main actors (if not re- Terminal dues regu- Cross-border out- 100% - Registration 3 (but still in- TNT Post +? Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? bound significant) Express 100% - No >>3 TNT Post +? Not available No TNT ? Parcels 100% - Registration >>3 TNT Post +? Source: NRA Total Note: *Including Netwerk VSP whic Indicator 19.5.8 Presence and role of mail consolidators in the market Source: NRA Question Answer Are companies offering mail consolidation services present in the market? Yes Indicator 19.5.4 Sum of marketh is a sharessubsidiary of of 3 TNT main Post competitors (excl. incumbent) How large is the turnover of mail consolidators in relation to the postal market? Not available Segment Approximate sum of market shares of 3 main competitors Have you handled any competition cases involving mail consolidator? No Source: NRA Letter post (open area) 13% (2008 and 2009) Parcels - Express - Unaddressed items - Note: - means no answers in questionnaire Source: NRA

Indicator 19.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the acquired Main objectives behind the ac- Date company company quisition No mergers Source: USP

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19.6. STRUCTURE OF MARKET DEMAND Indicator 19.6.3: Revenues and volumes generated by consumers vs. business customers in 2008, national currency, millions of items Indicator 19.6.4 Trends in mail substitution Indicator 19.6.1 Revenues and volumes generated by consumers vs. business Short description (in bullet points) • E-substitution customers in 2009, national currency, millions of items Segment Business customers Private consumers Approximate mar- Source: USP Revenue Volume Revenue Volume ket share in the total market

Indicator 19.6.5: Effect of the financial crisis on revenues in 2009 Addressed items (domestic) 4679 363 - Letters - 2901 - 363 - Correspondence - 2901 - 363 - 19.7. PRICE PERFORMANCE: Reserved area 0 0 0 0 0% Direct mail - 1288 - 0 - Indicator 19.7.1 Standard public tariffs, 2005-2009, national currency Publications - 853 - 0 - Segment 2005 2007 2009 Unaddressed items - - - 0 - Single item: 20g tariff letter 0,39 0,44 0,44 Cross-border mail outbound - - - N/A - Single item: 100g priority mail 1.17 1.34 1.34 Express - - -N/A - Single item: 500g insured and registered 7.75* 8.50** 10.00 Parcels - - -N/A - Single item: 1 kg parcel 5.95 6.20 6.75 Total Bulk mail: composed of 20g letters*** 39.7 41.90 41.20 Source: USP,NRA, RBB Postmark Bulk mail: composed of 100g letters**** 76.0 80.20 79.00 Note: *) Insured to € 450,-. A maximum insured value up to € 5,400 is possible but is more expensive Indicator 19.6.2 Growth rate in revenues and volumes generated by consumers vs. business customers betweentmonitor 2008-2009 (express data). **) Insured(maximum to € 500,-. of € A 17,-). maximum insured value up to € 5,400 is possible but is more expensive Segment Business customers Private consumers (maximum of € 7,- + € 8,50). Revenue Volume Revenue Volume ***) Domestic, ex VAT, 1. Addressed items (domestic) - -4,6% - - 6% ****) Domestic, ex VAT, 1. Source: USP Letters - -5 - - 6% Correspondence - -5 - - 6% 000 letters. Price per letter.

Reserved area - N/A - N/A 000 letters. Price per letter. Direct mail - -4 - N/A Publications - -4 - N/A Unaddressed advertising - - - N/A Cross-border mail outbound - - - - Express - -- - Parcels - -- - Total Note: - means no information Source: USP,NRA, RBB Postma

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19.8. SOCIAL AND CONSUMERS ASPECTS Indicator 19.9.3 Supply of e-commerce services, total market Question Answer - Incumbent Do you supply own e-commerce services? What kind? Yes, we have a TNT-webshop which Indicator 19.8.1 Employment indicators, 2009 offers several postal products as well USP printed photo’s, photo albums etc. Employment (thousand), in full time equivalents 39,743 What share of turnover do you generate from own e-commerce services? N/A What is the trend? Percentage of total country employment What own e-commerce services do you plan to develop? N/A Share of civil servants 0% Share of part time and temporary employment N/A Are you able to indicate how the percentage of your turnover that origi- N/A Share of outsourced and subcontracted employment N/A nates from or is related to third-party e-commerce transactions (e.g. purchases on the internet) Source: USP Source: USP

Indicator 19.8.2 Wage and productivity indicators Indicator 19.9.4 Supply of hybrid mail or virtual delivery services Incumbent Question Answer - Incumbent Wages as a proportion of total costs 40% Do you supply hybrid mail or virtual delivery solutions? What kind? Yes, digital nota’s. Some transac- Average wage per hour (€) N/A tional mail to online banking services. Source: TNT Post, Annual report 2009 If yes, how many years have you been supplying these services for? 4 years What share of turnover do you generate from hybrid mail and/or virtual de- N/A livery solutions? What is the trend? 19.9. TECHNOLOGICAL DEVELOPMENTS Do you plan to develop (new) hybrid mail / virtual delivery solutions? N/A Source: USP

Indicator 19.9.1 Innovation, technology and new services Indicator 19.9.5 Developments within networks and mail consolidation services Service Do you offer? Volume (million Do you plan to offer? of items) Question Answer Have you carried out a major reorganisation of your logistics network? For No Hybrid mail Yes N/A N/A example, decentralising, implementing hub & spoke systems? Virtual delivery of mail Yes N/A N/A Do you use different networks for letters and parcels at collection, sorting, Yes, there is a separate parcel and transportation or delivery levels? What are the reasons? letter network. Pick up locations for parcels (parcel shops) No Not applicable N/A What is the relative importance of road, rail and air as modes of transpor- Road is the only mode of transport. Source: USP tation for mail? Have these shares changed recently? Why? Source: USP Indicator 19.9.2 Statistics on technological progress Indicator Value in Increase/decline Indicator 19.9.6 The most important environmental initiatives implemented 2009 since 2007 Brief answer (in bullet points) Percentage of letter mail benefiting from automated processing (e.g. sort- 85% (including - • Certified with several ISO standards (ISO 9001, ISO 14001, OHSAS 18001, Investors in People). ing) parcels) • Active environmental program, called Planet Me. Percentage of parcels benefiting from automated processing (e.g. sorting) - - • Has an ambition to reduce CO2 emissions with 45% in 2020. Note: - means no answers in questionnaire • Pilots with sustainable energy modes of transport (i.e. electric vehicles). Majority of our trucks are Source: USP equipped with EURO5 engines. Source: USP

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19.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 19.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 95 95.2 ------Note: - means no answer in questionnaire Source: NRA

Indicator 19.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 96.1 - - Note: - means no information Source: Ecorys (2008a)

Indicator 19.10.3 Quality of service indicators Indicator Value Percentage of lost mail < 5%. (Actual figure is confidential) Number of postal outlets (post offices and agencies) and number of letter 1,3 (postal Outlets) boxes per 10.000 inhabitants. 12 (letter boxes) The implementation of CEN standards. Yes Source: NRA

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20.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 20.1.1 Country facts Country facts Value Unit Year Population 38.2 Million 2010 Population growth -1.3 Percent 2000-2010

Population density 122 Pop. / km2 2010 Urbanisation rate 61.2 Percent 2008 GDP 547 PPS, billion 2009 GDP/capita 14,300 PPS 2009 Postal services to GDP ’99/09: 0.45%/0.49% Ratio 1998/2008

NRA Office of Electronic Communications (UKE) NRA responsibilities? Authorisation, US rates, USP accounts, Quality of US, User complaints, Cross subsidy in US Incumbent Poczta Polska S.A. Main activities of incumbent Postal, financial, CEP, retail Employment, incumbent 96400 Source of financing Self financing Chapter 20 POLAND Source: ITA/WIK (2009) Country fiche, Eurostat, NRA

Indicator 20.1.2 Volume of items delivered by segment in total market, millions Box 20.1 – Country summary of items The volume of addressed items grew nearly 2 percent between 2007-2009 – the growth Segment 2005 2007 2009 delivered by 4 percent correspondence – though offset by a nearly 14 percent decline in Addressed items* 1,642.7 1,791.3 1,826.3 direct mail. Unaddressed items grew 4 percent. Parcels and express fell 4 percent. Letters 1,642.7 1,791.3 1,826.3 Poland has not transposed Directive 2008/6/EC, but are obliged to do so before the extended deadline, 31.12.2012. Transposition work was in progress as of 2010 as a draft law Correspondence 1,494.1 1,598,2 1,660.1 was discussed internally in the government. Direct mail 1,49.6 1,93,1 166.2 Legally, the postal market segments of correspondence, direct mail and cross-border Publications - - - outbound of sizes less than 50g are reserved areas for the NPO. Unaddressed items 1,867.2 3,199.0 3,348.7 The market share of the Polish NPO is 70% in correspondence in the open area. In ex- Cross-border outbound 44.4 41.6 35.6 press and unaddressed items the Polish NPO has respectively has less than a third of the Express 1.0 49.7 47.8 market. Parcels 29.3 23.3 22.6 Some potential legal barriers to entry are firstly the reserved services (area) of the in- Total cumbent, national USO regulation, lack of access to postal infrastructure and the special Note: - means no answers in questionnaire VAT treatment of the incumbent. Products sold by the Polish NPO are all VAT exempted. Source:*) NRA data include mail over 2 kg)

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Indicator 20.1.3 Revenues from segments in total market, millions of PLN Indicator 20.2.2 Regulation of services based on new technologies Segment 2005 2007 2009 Question Answer Mail* 3,050.6 3124.7 3650.7 Are you aware of the presence of services based on new technologies in your market? For Yes Express 34.3 980.1 749.4 example, hybrid mail or virtual delivery networks? Do you have plans to regulate such products? For example, confidentiality of hybrid mail? No Logistics 213.3 215.7 278.5 Financial 575.3 506.1 472.4 Source: NRA Others 133.9 181.9 152.2 Total Indicator 20.2.3 VAT treatment of postal services Note: - means no answers in questionnaire Postal product Part of USO? VAT rate Legal basis Services provided by Yes Exempted Article 43, paragraph 1, subsection 1 – Act of 11 Source:*) NRA data include mail over 2 kg) public operator March 2004 Tax on goods and services Source: NRA, Ministry 20.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 20.2.4 Services ensured as universal services under national law

Segment Defined as universal service by law? Are quality standards specified by law? Indicator 20.2.1 National regulatory framework Basic letter post Yes Yes Question Yes/no Name of Year of Remarks law enactment Bulk letters No - Is postal law en- Yes Postal law 2003 Direct mail No - acted? Periodicals No - Is Directive 2008/6 No Transposition in progress (draft law dis- Non-priority letter s Yes Yes transposed? cussed internally in the government). Basic parcel post Yes Yes

Is there a law that defines… Bulk parcels No - Scope of USO? Yes 2003 Source: NRA Quality of USO? Yes 2004 USO rates? Ministry: Yes 2003 There are general guiding rules about setting NRA; No prices Indicator 20.2.5 Mechanisms to ensure provision of universal service USP accounts? Yes 2004 Question Answer Reserved area? Yes 2003 Describe the role played by the three mechanisms: market forces, Designation of the incumbent to provide the Authorisation proce- Yes 2003 designation and public procurement. Are other safeguarding universal service throughout the country on the dures? measures present? basis of the Act of Postal law. Universal service No Public operator obliged to provide universal fund? postal services, shall receive from the State Source: NRA, Ministry budget the subsidy to the provided universal postal services, if it incurs loss User protection? Yes 2004

Note:Source: The Ministry Ministry and the NRA have answered differently on some questions

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Indicator 20.2.6 Legal mechanisms to ensure quality of universal service Indicator 20.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? No Services within universal services If yes, state services e.g. letter post items, Annual measurement of quality of service? Yes NRA can impose other remedies? Yes otherwise insert “No” Annual publication of results on quality of service Yes What licensing procedure is used? Individual license monitoring? (designation, general authorisation, individual license) Source: NRA Which universal services are subject to individual license? Basic letter post (priority and non-priority letter post), Basic parcel post, Postal items for the blind persons Indicator 20.2.7 Financing the net cost of universal service Which universal services are subject to general authorisa- None tion? Mechanism Yes/No Mechanism Yes/No Are authorisation requirements published (transparent)? Yes Reserved area Yes Who contributes to the compensation fund? Is the USP authorised under Art. 9*? - (Incumbent, competitors, other entities) Services outside uni- Answer Remarks, experiences, problems encountered Compensation fund - Public procurement No versal services Size of compensation fund Direct compensation from public funds Yes (if present, in Euro) For which services is gen- Other General authorisation is not required for postal activity consisting of clear- eral authorisation re- postal ance, transport and delivery on non-addressed printed forms. Note: - means no answers in questionnaire quired? services General authorisation is not required for activities performed by the postal Source: NRA agent on the basis of agency agreement concluded with the operator in accordance with provisions of Kodeks cywilny (Civil Code) For which services is an No Indicator 20.2.8 Cost of universal service obligation and method for its calcula- individual license required (ex ante approval)? tion Note: *) Article 9 of Directive2008/6/EC Question Answer Source: NRA What is the cost estimate of USO? (if available, in Euro) - What is the name of calculation method? (if available) - Indicator 20.2.10 Access to postal infrastructure ensured by Member States Short description of calculation method (if available) - Is a thorough documentation of calculation method available? Where? At the disposal of the incumbent Access to: Yes/No Other conditions: Yes/No Is calculation method approved by the NRA? No Post codes No Change of address database No Does NRA calculate USO cost? No Address database No USP return services No Note: - means no answers in questionnaire Post office boxes No Street letter boxes No Source: NRA Delivery boxes Yes Sorting centres No

Other conditions: Yes/No Require downstream access to USP No Source: NRA

Indicator 20.2.11:

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20.3. REGULATION OF PRICES AND ACCOUNTING Indicator 20.3.3 Cost accounting system of the USP Question Answer Indicator 20.3.1 Method of price regulation What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Segment Method Remark Is the cost accounting system approved by the National Regulatory Authority? Basic letter post Ex ante For all items in this service category Assessment of the system (pros and cons) Bulk letters - Direct mail Note: - means no answers in questionnaire Periodicals Source: NRA Non-priority letter post Ex ante For all items in this service category Basic parcel post Ex ante For all items in this service category Indicator 20.3.4 Promoting access to and affordability of postal services Bulk parcels Question Yes/No If yes, how? Source: NRA Non-discriminatory prices (Art. 12*) required? Yes Universal postal services shall be provided within domestic and international traffic on the territory of Re- public of Poland, in a consistent way on comparable Indicator 20.3.2 Accounting requirements conditions and at affordable prices, maintaining quality required by law and ensuring of emptying the mail Question Answer Question Answer box and delivery of the postal items at least on every Separation of accounts No. of up/down stream accounts - working day and no less frequently, than 5 days a week Affordability (Art. 12*) defined in national Yes As above Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - law? No. of reserved product accounts N/A Transparency Note: *) Article 12 of Directive 2008/6/EC Unreserved product accounts required? No Independent body reviews USP accounts? Yes Source: Ministry No. of unreserved product accounts - Last review of USP accounts 2008 Body reviewing USP accounts (Type of body) Accounting firm em- Indicator 20.3.5 Promoting access to and affordability of postal services Application of tariff principles ployed by NRA Question Yes/No If yes, how? Bulk services within USO? No NRA issues statement of compliance? Yes Non-discriminatory prices (Art. 12) required? Yes Postal Act states that prices for universal services should be uniform and cost oriented. USP could apply Does USP conclude individual agreements? Yes Last publish statement of compliance 2009 special tariffs. Individual agreement: cost based price re- - Publish cost allocation system? No Affordability (Art. 12) defined in national law? Yes There is no specific regulation, but in the Postal act quired there is one regulation which states that prices for Individual agreement: NRA has cost data? No USP financial accounts audited? Yes universal services should be affordable. There is mechanism for price control. USP has special tariffs? Yes Last published financial accounts 2009 Up- and downstream accounts? No Note: *) Article 12 of Directive 2008/6/EC Note: - means no answers in questionnaire Source: Ministry Source: NRA

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20.4. ROLE OF NRA Indicator 20.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 20.4.1: NRA powers Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Task or power Yes/No Task or power Yes/No To whom is NRA decision appealed? Court Number of NRA decisions reversed? 0 Source: NRA Require USP cost allocation system? Yes Levy fines? Yes Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- Yes ments? Review cost allocation to non-USO? Yes Seek court order? No Indicator 20.4.5 Enforcement of competition rules by NRA and cooperation with Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes NCA Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? Yes Question Yes/No Question Yes/No Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Who is the primary enforcer of competition rules? NRA NRA obliged to share info with NCA? Yes Require downstream access? Note: ‘NCA’ national competition authority. Note: - means no answers in questionnaire Source NRA *) Under Article 22 of Directive 2008/6/EC Source: NRA Indicator 20.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Indicator 20.4.2: NRA human and financial resources User protection procedures in postal or con- Postal USP(s) required to issue annual report Yes sumer law? Question Answer law Size of budget? (€ thousands) About 800 PLN Enforcement by NRA or national consumer NRA NRA issues annual report Yes protection authority? Number of total staff ? 13 Applies to non-USP(s) in USO area? - Review of operator decision ensured Yes (Of which, staff dealing with postal affairs) Applies to non-USO services Yes Agency reviewing operator Several gov- Source of NRA budget General budget of the State or government ernment agen- Who approves NRA budget Parliament cies Source: NRA User protection procedures in postal or con- Postal USP(s) required to issue annual report Yes sumer law? law Note: - means no answers in questionnaire Indicator 20.4.3: NRA independence Source: NRA Question Yes/No Question Answer Does the government No Who, and under what The President of the NRA is appointed by the have a formal right to conditions, can ap- Prime Minister at the request of the minister re- Indicator 20.4.7 Main issues of discussion between NRA and USP guide NRA on policies? point NRA head? sponsible for communications for a 5-year term. Issue Short description Some NRA decisions re- No Who, and under what Can be dismissed by the Prime Minister only un- Price control systems quire governmental sup- conditions, can dis- der the following conditions: gross violation of • port? miss NRA head? the act, criminal offence committed, serious ill- • Methodology for calculation of net costs ness, resignation. Source: NRA Can government suspend No Minimum qualifica- Yes NRA orders? tions for NRA heads Source: NRA Indicator 20.4.8:

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20.5. MARKET STRUCTURE AND COMPETITION Indicator 20.5.3 Mail market segmentation * Percentage opened to com- Subject to No. of Indicator 20.5.1:Information about the incumbent petition license / signifi- Segment authorisa- cant Names of significant competitors Question Answer Question Answer Under tion? com- national Actual (Yes/No) petitors Name of incumbent Poczta Polska S.A. Main activities Postal, financial, CEP, re- law tail Addressed items 3 InPost Sp. z o.o. Legal status Joint stock company Employment 96400 Polska Grupa Pocztowa S.A. I.D.MARKETING Sp. z o.o. State ownership (percent) 100% Source of financing Self financing Letters 3 Source: USP Correspondence Reserved Yes area, 50g Indicator 20.5.2 Incumbent profits, 2009, national currency Direct mail Reserved area, 50g Statistic Value Publications - Total profit in 2009 (EBIT) -147 293 000 Unaddressed items No 5 INTEGER.pl S.A. Percentage of profit coming from letter mail 55,7% I.D.MARKETING Sp. z o.o. Dystrybucja Polska Sp. z o.o., Percentage of profit coming from reserved area (if present) ABC Direct Contact Sp. z o.o. Note: - means no information Target Polska Sp. z o.o. Cross-border outbound Reserved Yes 5 GLS Poland Sp. z o.o. Source: USP area, 50g TNT Express Worldwide (Poland) Sp. z o.o. Federal Express Poland Sp. z o.o. DHL Express (Poland) Sp. z o.o. UPS Polska Sp. z o.o. Express Yes 8 GLS Poland Sp. z o.o. Opek Sp. z o.o. ABC Direct Contact Sp. z o.o. PST "AVISTRANS" Kolporter S.A. TNT Express Worldwide (Poland) Sp. z o.o. DHL Express (Poland) Sp. z o.o. UPS Polska Sp. z o.o. Parcels Yes 1 InPost Sp. z o.o. Total Note: The level of competition can be described as Letters = addressed mail that is enclosed in an envelope or other wrapping and weighing at mosttense. 2 Kg; Direct mail =Advertising, marketing or publicity material sent by mail; Correspon- dence = Private letters sent by mail; Publications = individually addressed periodicals, magazines, newspapers, catalogues and books *) Estimations for 2009 (in ascending order): none Source: NRA

, emerging, substantial, in-

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Indicator 20.5.4 Sum of market shares of 3 main competitors (excl. incumbent)* 20.6. STRUCTURE OF MARKET DEMAND Segment Approximate sum of market shares of 3 main competitors Indicator 20.6.1: Revenues and volumes generated by consumers vs. business customers in 2009, national currency, millions of itemsSource: Indicator 20.6.2 Growth rate in revenues and volumes generated by consumers vs. business customers between 2008-2009Indicator 20.6.3: Revenues and volumes generated by consumers vs. business customers in 2008, national currency, millions of items Indicator 20.6.4: Trends in mail substitution Correspondence (open area) 30% Indicator 20.6.5 Effect of the financial crisis on revenues in 2009 Direct mail (open area) 8% Segment Estimate of the effect of the financial crisis on revenues Parcels 0.5% (please write ‘decline’ or ‘increase’ below, where relevant) Express 60% Less than 5% 5-15% more than 15% Unaddressed items 80% Addressed items (domestic) increase Note: *) Estimations for 2009 Letters increase Source: NRA Correspondence increase Indicator 20.5.5: Reserved area increase Direct mail decline Indicator 20.5.6 New entrants since 2009* Publications - Segment No. of en- Approximate End-to-end or up/downstream Name Unaddressed items decline trants competition? market share Cross-border mail outbound decline Mail 0 - Express increase Express 25 above 0.,5% Parcels increase Logistics 0 - Total increase Financial 0 - Note: - means no information Others 2 below 0.5% Source: USP Note: *) Estimations for 2009 Source: NRA 20.7. PRICE PERFORMANCE: Indicator 20.5.7 Cross border mail - millions of items in 2009 Volume (out- Reserved Main actors (if not reserved to incum- Terminal dues regu- Indicator 20.7.1 Public tariffs, 2004-2009 bound) for USP? bent) lated per Art. 13? Segment 2005 2007 2009 34,1 No Poczta Polska S.A. No Single item: 50 g tariff letter 1,3 1,35 1,55 TNT Express Worldwide (Poland) Sp. z o.o. Single item: 50 g priority mail 2 2,1 1,95 DHL Express (Poland) Sp. z o.o. Single item: 500g insured and registered 4,90 UPS Polska Sp. z o.o. Single item:0 - 10 kg parcel 5-14 6:50 - 15 9:50-18:00 Source: NRA Bulk mail: composed of 20g letters Bulk mail: composed of 100g letters Indicator 20.5.8 Presence and role of mail consolidators in the market Source: USP Question Answer Are companies offering mail consolidation services present in the market? No How large is the turnover of mail consolidators in relation to the postal market? - Have you handled any competition cases involving mail consolidator? No Source: NRA

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20.8. SOCIAL AND CONSUMERS ASPECTS 20.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 20.8.1 Employment indicators, 2009 Indicator 20.9.1 Innovation, technology and new services USP Service Do you offer? Volume Do you plan to Remarks Employment (thousand), in full time equivalents 96400 (Yes/No) (million of offer? Percentage of total country employment items) (Yes/No) Share of civil servants 0 Hybrid mail NO Share of part time and temporary employment Share of outsourced and subcontracted employment Virtual delivery of mail NO Note: - means no information Pick up locations for parcels NO Not applicable Source: USP (parcel shops) Indicato Other examples (insert name) Note: - means no information

Hybrid mail’ refers to items that are despatched quently printed, packed, sorted and delivered ‘Virtual delivery of mail’ refers to the digitalisa Source: USPbased item despatched by the sender and its elec

Indicator 20.9.2 Statistics on technological progress in electronic form by the sender and are subse- Indicator 20.9.3 Supply of e-commerce services,by the postal total operator market to the recipient. r 20.8.2: Question tion (scanning) by the postalAnswer operator - Incum- of a paper- bent tronic delivery of the item to the recipient Do you supply own e-commerce services? What kind? No What share of turnover do you generate from own e-commerce services? What is the trend? What own e-commerce services do you plan to develop?

Are you able to indicate how the percentage of your turnover that originates from or is related to third-party e-commerce transactions (e.g. purchases on the internet) Source: USP

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Indicator 20.9.4 Supply of hybrid mail services, total market Question Answer - Incum- bent Do you supply hybrid mail or virtual delivery solutions? What kind? No If yes, how many years have you been supplying these services for?

What share of turnover do you generate from hybrid mail and/or virtual delivery solutions? What is the trend? Do you plan to develop (new) hybrid mail / virtual delivery solutions? Source: USP

ndicator 20.9.5 Developments within networks and mail consolidation services

Indicator 20.9.6 The most important environmental initiatives implemented 20.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 20.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 82 52,7 90 83,9 94 94,0 - - Note: - means no answers in questionnaire Source: NRA

Indicator 20.10.2 Transit time for cross-border priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 85.5 - - Note: - means no information Source: Ecorys (2008a)

Indicator 20.10.3 Quality of service indicators Indicator Value Percentage of lost mail - Number of postal outlets (post offices and agencies) and number of letter boxes per 2,2 postal outlets 10.000 inhabitants. 12,5 letter boxes

The implementation of CEN standards. Yes Note: - means no answers in questionnaire

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21.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 21.1.1 Country facts Country facts Value Unit Year Population 10.6 Million 2010 Population growth 4.3 Percent 2000-2010

Population density 115 Pop. / km2 2010 Urbanisation rate 59.5 Percent 2008 GDP 197 PPS, billion 2009 GDP/capita 18,500 PPS 2009 Postal services to GDP ’99/09: 0.69%/0.73% Ratio 2000/2008

NRA ICP - Autoridade Nacional De Comunicaçòes (ICP-ANACOM) NRA responsibilities? Authorisation, US rates, Special tariffs, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US Incumbent CTT Correios de Portugal, S.A Main activities of incumbent Postal Services (Mail, Parcels and Express), Financial Services, Data and Docu- ments Employment, incumbent 12 907* Source of financing Reserved area. A compensation fund is also foreseen in Postal Law, but not activated Chapter 21 PORTUGAL Note: *) CTT Group: 14 752 (also includes the follo

Source:Envelopagem, ITA/WIK (2009) PayShop, Country Phone-ix fiche, Eurostat, NRA, USP

Box 21.1 – Country summary Indicator 21.1.2 Volume of items delivered by segment in total market, millions , Tourline wing:Express CTT (Spain)) Expresso, Mailtec, PostContacto, Campos The volume of national addressed items decreased by 6 percent, while outbound cross-border of items by as much as 15 percent, between 2007 and 2009. Volume of national express items was 36 percent higher, while the outbound express volume remained unchanged. The volumes of do- Segment 2005 2007 2009 mestic parcels fell by nearly 60 percent, while the volume of inbound parcels doubled. 1. Addressed items Until July 2010, Portugal has not transposed Directive 2008/6/EC, but is required to do so be- 1.1 National 1,209 1,172 1,103 fore the deadline on 1.1.2011. the NRA expects that transposition will take place in the second 1.2 International outbound 53.5 46.4 39.6 half of 2010. 1.3 International inbound 43.2 40.7 35.0 The market segment of addressed items is not fully open as the reserved area remains in 2. Unaddressed items N/A N/A N/A 2010. 3. Express 19.9 20.0 27.5 The market share of the Portuguese NPO is 98% for addressed items and 95% for cross-border 4. Parcels 10.7 3.1 1.6 outbound mail. For express the market share is 40%, and for parcels the market share is under 40%. Total There has been no competition cases in Portugal related to the postal sector after 2007. Source: NRA The Portuguese NPO are VAT exempt on all USO.

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Authorisa- Yes Access regime for the 2001 Decree Law 150/2001, of 7 May, amended by Decree Indicator 21.1.3 Revenues from segments in total market, millions of Euro tion proce- activity of provision of Law 116/2003 of 12 June. Segment 2005 2007 2009 dures? postal service in a Express 201.1 213.8 228.6 competitive market. Non express (Reserved services) 324.6 303.2 297.9 Universal No Basic law, Basis for It is predicted in the postal law of 1999, but until service fund? the Universal Service now it was not created. Non express (Liberalised service) 242.1 279.6 256.2 Concession, Access Total 783.1 813.8 782.7 regime. Source: NRA User protec- Yes. Basic law, Basis for * tion? the Universal Service Concession, Access 21.2. REGULATORY FRAMEWORK AND PRACTICES regime, Regulation of the public postal service (Decree Law 176/88, of 18 May) and Indicator 21.2.1 National regulatory framework Decree Law 156/2005 Question Yes/N Name of law Year of Remarks of 15 September (that o enact- set an obligation to ment have a book where users can write their Is postal law Yes Basic Law for postal 1999 Law 102/99 of 26 July, amended by Decree-Law complaints). enacted? services 116/2003 of 12 June Other special Yes. Basis for the Universal Exclusive right of the USP in respect to: a) place- Is Directive No 2010 – rights Service Concession. ment of collection boxes on public streets; b) issue 2008/6 Second (which)? and sale of stamps; c) issue of money postal orders. transposed? half Note:*Please see indicator 21.4.6 Is there a law that defines… Source: NRA, Ministry Scope of Yes Basis of the Universal 1999 Amended by Decree Law 116/2003 of 12 June and by USO? Postal Service Conces- Decree Law 112/2006 of 9 June. sion, approved by De- cree Law 448/99 of 4 Indicator 21.2.2 Regulation of services based on new technologies November. Question Answer (in bullet points) Quality of Yes Quality Convention. 1999, The Basic law and the Basis of the Universal Service Are you aware of the presence of services based Yes. Examples are: Hybrid Mail; electronic date-stamp service; USO? 2008 Concession establish several obligations related to on new technologies in your market? For exam- electronic mail boxes to receive, organize and store correspon- quality, as for example the distribution 5 day per ple, hybrid mail or virtual delivery networks? dence in a digital format. week, and the obligation to establish quality of ser- Do you have plans to regulate such products? No information available. The NRA is monitoring the develop- vice indicators through a Quality Convention cele- For example, confidentiality of hybrid mail? ments in the market. Other “horizontal” legal framework such as brated between the NRA and the USP. The most re- data protection laws are applicable. cent convention was celebrated in 2008 and is valid for the period 2008-2010. Source: NRA USO rates? Yes Price Convention. 1999, The Basic law and the Basis for the Universal Service 2008 Concession establish tariff principles and the obligation to define price-setting rules through a Price Convention between the NRA and the USP. The most recent convention was celebrated in 2008 and is valid for the period 2008-2010. USP ac- Yes Basic law and Basis 1999 In 1996 the NRA had defined the general principles counts? for the Universal Ser- of USP’s accounting system, which are in line with vice Concession those set by article 14 of Directive 97/67/EC. Reserved Yes Basis for the Universal 1999, area? Service Concession. 2003

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Indicator 21.2.3 VAT treatment of postal services Indicator 21.2.6 Legal mechanisms to ensure quality of universal service Postal product Part of USO? VAT rate Legal basis Mechanism Yes/No Mechanism Yes/No (Yes/No) NRA sets monitoring standards? Yes NRA can fine USP(s)? No* All products within the US Yes Exempted from VAT Article 9º,nr. 23 of VAT Code of Law Annual measurement of quality of service? Yes NRA can impose other remedies? Yes* (Decree-Law nr 102/2008, of 20 June) Annual publication of results on quality of service Yes All products outside the US No 20% VAT rate VAT Code of Law monitoring?

Note *) If the standards of quality of service are no Note: VAT is exempt on universal services provided by ing to a deduction to the maximum variation of pric the incumbent have been VAT charged. Source: NRA, Ministry sequent to that in which the non compliance took exceptional situations duly substantiated by the Indicator 21.2.4 Services ensured as universal services under national law menting the price reduction, the t complied with, a compensation is applied correspond- Segment Defined as universal service by law?the incumbent.Are quality Non standards universal servicesspecified provided by law?* by compensation in favour of users. The financial va of revenues of reserved services es of reserved services allowed for the year sub- Basic letter post Yes Yes place, up to 1 percentage point at the most. In From the above, it is to highlighoperator may request from the NRA the application of a financial Bulk letters** USP: Yes USP:- USP, related to operational difficulties in imple- NRA: - NRA: - (since year 1995); the compensation benefits di Direct mail Yes No could result from the impositionthat wouldof fines). result from the application of the reduction in the prices Source: NRA lue of the latter shall correspond to the reduction Periodicals Yes Yes t that: there is a link between quality of service achieved and prices Indicator 21.2.7 Financing the net cost of universal service Non-priority letter s** USP: Yes USP: Yes NRA: - NRA: - Mechanism Yes/No Mechanism Yes/No Basic parcel post Yes Yes Reserved area Yes Who contributesrectly to the the compensation users (and notfund? for example* the NRA as Bulk parcels - - (Incumbent, competitors, other entities) Note: * Quality standards are defined in a Quality Compensation fund Yes Public procurement No Size of compensation fund * Direct compensation from public funds No **the Although USP provider. the service Includes segments also standa of Bulk le (if present, in Euro) Note: *) No compensation the law, both segments are provided by the USP. Source: NRA Source:those USP, services, NRA then they are regulated asService universal Convention, services. established between the NRA and rds for waiting time at post offices. fund was created yet. Indicator 21.2.8 Cost of universal service obligation and method for its calcula- tters and Non-priority letters are not expressly referred in Indicator 21.2.5 Mechanisms to ensure provision of universal service tion Question Answer Not withstanding, if th Question Answer Describe the role played by the three Market forces have no specific role. What is the cost estimate of USO? (if NRA:Information not available on the net cost of the USO. mechanisms: market forces, designa- The relevant mechanisms are designation and public procurement. The available, in Euro) USP: Under development taking into account Third Directive guidelines tion and public procurement. Are concession of universal service is established in Portugale USP by chooses a contract. to provide other safeguarding measures pre- Source: NRA, USP sent? Source: NRA, Ministry

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Indicator 21.2.9 Authorisation/licensing for services within and outside universal 21.3. REGULATION OF PRICES AND ACCOUNTING service area Services within universal services If yes, state services e.g. letter post Indicator 21.3.1 Method of price regulation items, otherwise insert “No” Segment Method Remark What licensing procedure is used? Individual licence. Reserved ser- Price cap Letters (correspon- Which universal services are subject to individual license? Letters (correspondence, Direct mail), Pe- vices dence, direct mail) riodicals, Parcel. Non-reserved USP must report to NRA the price of each postal service comprised in Letters (correspon- Which universal services are subject to general authorisation? None. services the US, with an advance notice of at least 30 working days from the dence, direct mail), Are authorisation requirements published (transparent)? Yes, including the titles granted on the date of entry into force. ICP-ANACOM is entitled to determine changes Publications, Parcels NRA website. to those prices at any time (ex-ante or ex-post), based on the compliance with the tariff principles. Is the USP authorised under Art. 9*? No – Under the basis of concession established (contract) Non-universal Prices freely set Express and other ser- services vices not US. Services outside universal services Answer Source: NRA For which services is general authorisation required? For all the services not mentioned at the licensing regime, including express mail. For which services is an individual license required (ex ante approval)? No Note: *Article 9 of Directive2008/6/EC Source: NRA

Indicator 21.2.10 Access to postal infrastructure ensured by Member States* Access to: Yes/No Other conditions: Yes/No Post codes No Change of address database No Address database No USP return services No Post office boxes No Street letter boxes No Delivery boxes Yes Sorting centres No Other conditions: Yes/No Require downstream access to USP Yes Note: *:The law sets the obligation of USP to gi

discriminatory conditions. This ac Source:The NRA NRA has powers to act in a dispute resolution procedure.

ve access to its network under transparent and non- Indicator 21.2.11 Involvement in competitioncess is based on voluntarycases since agreements 2007 celebrated by the parties. Case name Case status Postal product(s) Issue concerned No competition cases Source: USP

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Indicator 21.3.2 Accounting requirements Indicator 21.3.3 Cost accounting system of the USP Question Answer Question Answer Question Answer Separation of accounts No. of up/down stream accounts - What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC – Top down at historical Did NRA approve product accounts? No(a) Special Tariff: 1st year of data to NRA 1993 (e) costs No. of reserved product accounts 13(b) Transparency Is the cost accounting system approved by the National Regulatory Authority? Yes Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Assessment of the system (pros and cons) No. of unreserved product accounts 37(b) Last review of USP accounts 2007 - Body reviewing USP accounts (Type of body) Accounting Note: - means no answers in questionnaire Application of tariff principles firm selected and paid by FAC = fully allocated cost accounting, Bulk services within USO? Yes NRA Source: NRA, USP

Does USP conclude individual agreements? - NRA issues statement of compliance? Yes Individual agreement: cost based price re- Yes Last publish statement of compliance 2006 Indicator 21.3.4 Promoting access to and affordability of postal services quired (c) Question Yes/No If yes, how? Individual agreement: NRA has cost data? (d) Publish cost allocation system? No Non-discriminatory prices Yes The USP is required to apply non-discriminatory prices and to publish in an USP has special tariffs? Yes USP financial accounts audited? Yes (Art. 12*) required? appropriate manner, including by making available in a specific address of (c) its web site, the tariffs and discounts of US. Up- and downstream accounts? - Last published financial accounts 2009 Affordability (Art. 12*) de- Yes Prices of US must be price oriented, the USP is obliged to keep an analyti- Note: - means no answers in questionnaire fined in national law? cal cost accounting system with separation of accounts and reserved services are subject to a price-cap. (a)In Portugal, the NRA did not Note: - = Unknown. No information about law or practice. counts. The USP along the years has reported this *) Article 12 of Directive 2008/6/EC by the NRA, including on how the products should be reported (e.g. separated between each re- Source: NRA

served and non-reserved services,formally and between approve each the universal number and an non-universal service). (b) At a more product elementary level 56 and 327, respectively. 21.4. ROLE OF NRA (c)CTT are entitled to practice di as economies of scale are concerned, so justify.information Th according to d format of USP’s product ac- shall comply with the principle of Indicator 21.4.1: NRA powers Task or power Yes/No Task or power Yes/No the standardised service that providesscounts all and operations special prices, where the principles defined tribution of postal items, as well as with the prin Require USP cost allocation system? Yes Levy fines? Yes Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data wards all customers who meet thecost same orientation, requirements taking into a Yes e application of these discounts and special prices requirements? COM the discount and special price list. economic reasons, namely as far Review cost allocation to non-USO? Yes Seek court order? No (d)The USP reports data on unit cost for (almost) Require data from USP (Art.22)? Yes Cancel unlawful rates? Yes, in USP only concerning clearance, sorting, transport and dis- between the mail processing stages (clearance, tran ccount the avoided costs as regards Require data from non-USPs (Art.22*) Yes Set new rates for USP? No ciples of transparency an can be produced by the system. But improvements can be made. Require data studies? Yes Court orders sought since 1.1.2006 re- No garding data? (e) Considering discounts as special tariffs. The andfi conditions. CTT must submit to ANA-Require downstream access? Yes sent legal framework, took effect in 1993. The d non-discrimination to- Note: *) Under Article 22 of Directive 2008/6/EC had to communicate to NRA the di all services for which a price is set, discriminated Source: NRA Source: NRA sport, sorting, distribution). More information

rst price convention, cele scounts it intendedUSP (at tothat apply. time the incumbent operator) already

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Indicator 21.4.2: NRA human and financial resources Indicator 21.4.5 Enforcement of competition rules by NRA and cooperation with Question Answer NCA Question Yes/No Question Yes/No Size of budget? (€ thousands) 2900 (for postal services) Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Number of total staff ? 402 (as of December 2009) Note: ‘NCA’ national competition authority. (Of which, staff dealing with postal affairs) 20 FTE Source: NRA Source of NRA budget Fees collected from the National USP and from postal operators generally and from non-postal operators (e.g., telecomm) Who approves NRA budget Ministry responsible for postal services Indicator 21.4.6 Regulation of user protection procedures and remedies Source: NRA Question Answer Question Answer User protection procedures in postal Both USP(s) required to is- Yes Indicator 21.4.3: NRA independence or consumer law? sue annual report Enforcement by NRA or national con- Both NRA issues annual re- Yes Question Yes/No Question Answer sumer protection authority? port Does the gov- No Who, and under The board of administration comprises a president and two or Applies to non-USP(s) in USO area? Yes Review of operator Yes ernment have a what conditions, four board member. The members of the board of administra- decision ensured formal right to can appoint NRA tion are appointed by resolution of the Council of Ministers, Applies to non-USO services Yes Agency reviewing op- NRA, National Consumer Protection guide NRA on head? upon proposal by the member of Government responsible for erator Authority, dispute resolutions non- policies? communications judicial entities, courts. Some NRA de- Yes* Who, and under The board of administration can only be dissolved by resolution Remedies by competent national au- * cisions require what conditions, of the Council of Ministers and following an opinion issued by thority? (maximum fee) governmental can dismiss NRA the ICP - ANACOM advisory council, in the following cases: support? head? - Serious irregularities in the functioning of the body; Note: * In the case of the USP, the NRA is entitled Source: NRA - Considerable excesses in expenses over those stipulated in the budget, without due justification. Source:plaints. NRA Can govern- No Minimum qualifi- Yes, the members of the board of administration are nominated ment suspend cations for NRA from among people of recognized capacity, independence and NRA orders? heads technical and professional competence Indicator 21.4.7 Main issues of discussion between NRA and USP Notes:* Ministerial approval is required for: a) The activities plan and budget; b) The activities report and to analyse and issue a reasoned opinion on those com- Issue (Short description in bullet points) accounts; c) Other acts anticipated by law. For more information on NRA independence, please refer to Statutes of ICP-ANACOM (Decree-Law 309/2001, of 7 December: NRA: Prices and Quality. The periodic celebration of price regulation rules and quality standards (price and quality http://www.anacom.pt/template20.jsp?categoryId=4675&contentId=17645). conventions). USP: Cost accounting system: common cost allocation Source: NRA, USP

Indicator 21.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 21.4.8: NRA relations with customer associations Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Example of relation Short description To whom is NRA decision appealed? Court Number of NRA decisions reversed? 2 Hearing the consumers association The approval of the legal framework of postal services Quality / Price Conven- Note: - means no information tions is preceded by the hearing of consumer associations. Source: NRA Source: NRA

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21.5. MARKET STRUCTURE AND COMPETITION Indicator 21.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Segment Approximate sum of market shares of 3 main competitors

Indicator 21.5.1:Information about the incumbent Letter post (liberalized area) 4% Question Answer Question Answer Parcels 70% Name of incum- CTT Correios de Portugal, Main activi- Postal Services (Mail, Parcels and Express), Finan- bent S.A ties cial Services, Data and Documents Express 44% Legal status Public Limited Company Employment 12 907* Unaddressed items N/A State ownership 100% state-owned Source of fi- Reserved area. A compensation fund is also fore- Source: NRA (percent) nancing seen in Postal Law, but not yet activated Note: *CTT Group: 14 752 Source: USP Indicator 21.5.5 Mergers and acquisitions of incumbent since 2007 Main activities of the Main objectives behind the ac- Date Name of acquired company acquired company quisition Indicator 21.5.2 Incumbent profits, 2009, national currency 2007 Campos Envelopagem (CESA) – Mail production and hy- Strengthen CTT’s position in printing & acquisition of the remaining brid mail services finishing, with new offers for mail pro- Statistic Value 30% of the capital duction and hybrid mail services 2009 Creation of one society in Mo- Express and Parcels Increasing the presence and operation Total profit in 2009 50,6 Million Euro zambique (50% of the capital) (starting during 2010) in external markets Percentage of profit coming from letter mail - Source: USP Percentage of profit coming from reserved area (if present) - Note: - means no answers in questionnaire Indicator 21.5.6 New entrants since 2008 Source: USP Segment No. of Approxi- End-to-end Name en- mate mar- or Indicator 21.5.3 Mail market segmentation trants ket share up/downstre am competi- Percentage opened to Subject to No. of sig- tion? competition license / nificant- Mail 2 Confidential End-to-end Celeris, Postcontacto Under na- authorisa- competi- Names of significant com- Actual Express 13 Confidential End-to-end TOTALMÉDIA - entregas ao domicílio, S.A., Segment tional law tion? tors petitors MANOBRA JOVEM - Transpor-tes, Lda, VIANICLE - Addressed items Moderate Low yes 5 Notícias Directo, SDIM, VASP Unipessoal, Lda, RITMO VELOZ, Lda, LEVADO À (letter post) premium, Iberomail, Lordtrans LETRA - Transportes e Serviços, Lda, ADICIONAL - (SEUR) distribuição e gestão comercial, S.A., SERVIÇOS POSTAIS DA LEZÍRIA, Unipessoal, Lda., Unaddressed items N/A N/A No N/A IBERPERÍMETRO, Lda, ATLANTICOURIER - Express (including Intense Substan- Yes 10 Chronopost Portugal, UPS of Por- Transporte e entrega de documentos Unipessoal, parcels) tial tugal, Fedex/Rangel, Expresso, Lda, CARGA COMPATÍVEL UNIPESSOAL, Lda., LISESPO (SEUR), TNT Express, Linexpress, serviços expresso, Lda., Polientrega, Transportes Ochoa, Adicional, DHL, Lda., Rangel Expresso II, S.A. MRW (franchising), NACEX (fran- Logistics N/A chising) Financial N/A Parcels (non ex- Intense Intense Yes 3 Lordtrans (SEUR), Urbanos, MEEST press) Others N/A Total - - - - - Source: NRA Note: - means no answers in questionnaire Source: NRA

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Indicator 21.5.7 Cross border mail 21.6. STRUCTURE OF MARKET DEMAND Volume (out- Reserved for Main actors (if not reserved to in- Terminal dues regu- bound) USP? cumbent) lated per Art. 13? Letter post (reserved 23,2 Yes Indicator 21.6.1 Revenues and volumes generated by consumers vs. business for USP) customers in 2009, national currency, millions of items and million Euro Letter post & parcels 16,5 CTT, Iberomail, VAPS premium, Lordtrand. Yes (for USP) (liberalized area) MEEST Segment Business customers Private consumers Approximate Express 1,9 UPS of Portugal, DHL, CTTExpresso, TNT No Revenue Volume Revenue Volume market share in Express, LISESPO(SEUR), Chronopost Por- the total market tugal. NACEX (franchising), Transportes Addressed items (domestic) 443.9 1065.0 27.7 28.4 98% Ochoa, MRW (franching) Letters 421.7 997.4 - - - Source: NRA Correspondence 380.3 854.6 27,7 28,4 - Reserved area * Indicator 21.5.8 Presence and role of mail consolidators in the market Direct mail 41.4 142.8 - - - Question Answer Publications 22.2 67.6 - - - Unaddressed items ** 13.4 574.9 - - 38% Are companies offering mail consolidation services present in the market? Information not available. Cross-border mail outbound 20.5 19.8 24.4 18.5 95% How large is the turnover of mail consolidators in relation to the postal market? Information not available. Express (both business and private) *** 68.4 12.9 N/A N/A 40% Have you handled any competition cases involving mail consolidator? - Parcels (both business and private) 7.5 0.5 N/A N/A - Note: - means no answers in questionnaire Total - - - - - Source: NRA Note: - means no answers in questionnaire

*) About 55% of revenue of addressed mail (2008) **) Provided by a subsidia ***) Provided by a subsidiary co Source: USP ry company (Post Contacto)

mpany in Portugal (CTT Expresso)

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Indicator 21.6.2 Growth rate in revenues and volumes generated by consumers Indicator 21.6.5 Effect of the financial crisis on revenues in 2009 vs. business customers between 2008-2009 Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Segment Business customers Private consumers Less than 5% 5-15% more than 15% Revenue Volume Revenue Volume Addressed items (domestic) Decline Addressed items (domestic) -3.9% -4.4% -12.0% -24.4% Letters Decline Letters -3.8% -4.3% - - Correspondence Decline Correspondence -2.9% -3.4% -12,0% -24,4% Reserved area Reserved area - - Direct mail Decline Direct mail -11.5% -9.3% - - Publications Decline Publications -5.6% -6.9% - - Unaddressed items Decline Unaddressed advertising -1.9% +0.4% - - Cross-border mail outbound Decline Cross-border mail outbound +1.4% -1.2% -5.1% -11.5% Express Express Business and private Decline Business and private -2.4% -2.5% N/A N/A Parcels Parcels Total Total addressed mail items (business and pri- -4.2% -5.1% - - vate) Source: USP Note: - means no answers in questionnaire Source: USP 21.7. PRICE PERFORMANCE: Indicator 21.6.3:

Indicator 21.6.4 Trends in mail substitution Short description Indicator 21.7.1 Public tariffs, 2004-2009 Segment 2005 2007 2009 • Electronic alternatives for physical delivery that have had, in the past, slightly affected letter post volume, is estimated to affect mail volumes with an annual decreasing of -2% to -3%, in the short term. Priority 0.45€ 0.45€ 0,47€ Single item: 20g tariff letter • Development of digital services is in course (including new hybrid mail services, electronic delivery of letter Non Priority 0.30€ 0.30€ 0,32€ items, reverse hybrid mail). However, the level of penetration of these services will not be enough to com- Priority 0.65€ 0.70€ 0,75€ pensate the present and foreseen decline of traditional mail services. Single item: 100g Non priority 0.49€ 0.55€ 0,60€ Source: USP Single item: 500g insured and registered * 2,41€ 2.60€ 2.77€ Single item: 1 kg parcel 3,10€ 3.35€ 3.65€ Bulk mail: composed of 20g letters Non Priority 0,293€ 0.298€ 0.31€ Bulk mail: composed of 100g letters Non Priority 0,487€ 0.547€ 0.597€ Note: *) Price for registered. Insured price depends on

Source:on USP the weight.

the amount of the value declared by the sender, not

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21.9. TECHNOLOGICAL DEVELOPMENTS 21.8. SOCIAL AND CONSUMERS ASPECTS Indicator 21.9.1 Innovation, technology and new services Indicator 21.8.1 Employment indicators, 2009 Service Do you offer? Volume Do you plan to Remarks (million of offer? USP items) Employment (thousand), in full time equivalents 13 340 Percentage of total country employment Hybrid Yes About 30% of Through Mailtec/DSTS (a mail letter mail CTT subsidiary) Share of civil servants 0% Share of part time and temporary employment Not significant Virtual de- Yes ViaCTT ViaCTT is an EDPP - Elec- Number of outsourced and/or subcontracted workers in the delivery function in About 500 livery of :140.000 regis- tronic Document Presenta- (monthly average for 2009) mail tered users tion and Payment solution; Note: - means no information and 26 mail Mailmanager is document Source: USP, UNI Europa senders scanning, classification, Mailmanager data capture and processing of mail and documents Indicator 21.8.2 Wage and productivity indicators received by the recipients Incumbent Pick up lo- No Not applicable Yes cations for Wages as a proportion of total costs* 60.4% parcels Average wage per hour (€) - (parcel Note: - means no answers in questionnaire shops)

*) CTT Group: 54,7% Other ex- E*services already available: E*services to be of- Annex I Source: USP amples e*mystamp (MeuSelo), fered: E*Billing, Annex II (insert e*mypostcard (MeuPostal), E*invoicing, name) e*GIServices (Geographic Infor- E*payments and mation Services), MDDE (Marca- m*payments, Do-Dia-Electrónica), e*logistics, E*commerce Kit, e*franking (machines), (see Hybrid Mailings for ANNEX I for further details), SME & SOHO, (see Mobile Telecommunications: ANNEX II for further CTT is an MVNO operator details) Source: USP

Indicator 21.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007 Percentage of letter mail benefiting from automated processing (e.g. sorting) 63% + 3 p.p. Percentage of parcels benefiting from automated processing (e.g. sorting) 97% - 98% The same level Source: USP

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Indicator 21.9.3 Supply of e-commerce services, total market Indicator 21.9.5 Developments within networks and mail consolidation services Question Answer - Incumbent Question Answer Do you supply own e-commerce services? What kind? Yes; Postal Virtual Store (at Have you carried out a major reor- Increased mechanised sorting with extension of the automatic sequential http://www2.ctt.pt/fewcm/wcmservlet/ctt/loja_virtu ganisation of your logistics net- sorting. Creation of a sorting unit for processing the mail sent by big cos- al/index.html ) work? For example, decentralising, tumers and with good quality of addressing and development of new models What share of turnover do you generate from own e- Nowadays less than 3% but growing implementing hub & spoke sys- of delivery (including outsourcing) for this type of mail in the main urban ar- commerce services? What is the trend? tems? eas. Construction in 2010 of a new northern mail operations centre to enhance the flexibility of mail processing, transport and delivery and including What own e-commerce services do you plan to develop? See Annex I and Annex II environment-friendly features. Are you able to indicate how the percentage of your turn- Nowadays less than 5% but growing Do you use different networks for The collection, transport and delivery of parcels share the network for letters over that originates from or is related to third-party e- letters and parcels at collection, mail, for reasons of network optimisation. Sorting operations are done by the commerce transactions (e.g. purchases on the internet) sorting, transportation or delivery subsidiary CTTExpresso, company dedicated to the express/parcels service Source: USP levels? What are the reasons? that have modern sorting equipments with capacity available. What is the relative importance of Road: 96% Indicator 21.9.4 Supply of hybrid mail services, total market road, rail and air as modes of trans- Air: 4%, for the islands of Azores and Madeira. portation for mail? Have these No changes have been registered. Question Answer - Incumbent shares changed recently? Why? Do you supply hybrid mail or virtual Yes, both. Hybrid mail solutions: production of physical mail sent by an Source: USP delivery solutions? What kind? electronic way. Virtual delivery solutions: Electronic document presentation and payment solution, documents scanning, classification, data capture and processing of mail and documents and delivery to the recipients. Indicator 21.9.6 The most important environmental initiatives implemented If yes, how many years have you been Hybrid mail solutions since 1997 and virtual delivery solutions since 2006. Brief answer (in bullet points) supplying these services for? • Energy efficiency: reduction in power and fuel consumption renewing heavy vehicle fleet; pilot-experiences What share of turnover do you gener- Nowadays less than 5% but growing. with electrical and gas vehicles; ate from hybrid mail and/or virtual • Management of consumables and waste: reduction of paper consumption and extend the implemented delivery solutions? What is the trend? waste management system of Lisbon, to the main offices and mail operation centres elsewhere in the country, increasing the waste recycling rate ; Do you plan to develop (new) hybrid CTT has plans to improve the existent hybrid mail/virtual solutions in or- • Climate change: reduction of CO2 emissions by 10% by 2013; set up of carbon management and measure- mail / virtual delivery solutions? der to acquire more subscribers/users and offer more functionalities. ment systems; participation in PostEurop’s GHG (Green House Gas) Reduction Programme and the carbon Source: USP emissions reduction program of the IPC – EMM - Environment Measurement and Monitoring System; participation in the ACGE Index (Climate Change and Corporate Management) achieving de first position in the rank of countrywide survey; • ISO-14001 certification of operational units and of the companies group in progress; other certifications in place: ISO 9001 and OHSAS 18001. Green products: development of sustainable products foreseen to launch in 2010 . Note: - means no information Source: USP

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21.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 21.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 94,5(a) 95.2(a) - 99.3 (a) - 99.8 (a) - 99.9 (a) - - 87.0(b) 91.3(b) - 98.1 (b) - 99.4 (b) Note: - means no answers in questionnaire

(a) – for items sent within Portugal mainland (b) – for items sent to, from or between Autonomous Regions of Madeira and Azores

Source:Values NRA not audited yet.

Indicator 21.10.2 Transit time for cross-border priority mail, 2008 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 93.8 - - Note: - means no information Source: Ecorys (2008a) *Mote: Value of the last

Indicator 21.10.3 Quality12 months of serv endingice indicators October 2008 (domestic, 2009) Indicator Value Transit time for non-priority mail (% D+3) 97.6% (a) Percentage of lost mail – Non priority mail not delivered in D+15 0.21% (a) Percentage of lost mail – Priority mail not delivered in D+10 0.21% (a) Transit time for periodicals (% D+3) 99.1% (a) Transit time for parcels (% D+3) 93.6% (a) Waiting time at postal establishments (% of people waiting < 10 minutes) 92.3% (a) Number of postal outlets (post offices and agencies) per 10.000 inhabitants. 2.7 Number of letter boxes per 10.000 inhabitants. 14.3 The implementation of CEN standards. Yes Notes: (a) Values not audited yet. Source: NRA

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22.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 22.1.1 Country facts Country facts Value Unit Year Population 21.5 Million 2010 Population growth -4.4 Percent 2000-2010

Population density 90 Pop. / km2 2010 Urbanisation rate 55.0 Percent 2008 GDP 229 PPS, billion 2008 GDP/capita 10,700 PPS 2008 Postal services to GDP ’99/09: na na 1998/2008

NRA National Authority for Management and Regulation in Communications (ANCOM) NRA responsibilities? US designation, Frequency of US, Weight limit US parcels, Scope of reserved area, Uniform tariff rules, Authorisation, US rates, Special tariffs, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US Incumbent National Company of Romanian Post (CNPR) Main activities of incumbent Postal services Employment, incumbent 36525 Chapter 22 ROMANIA Source of financing Business income. Reserved area. Source: ITA/WIK (2009) Country fiche, Eurostat, NRA

Box 22.1 – Country summary Indicator 22.1.2 Volume of items delivered by segment in total market, millions The Romanian market experienced a significant decline between 2007 and 2009. The volume of addressed items dropped by more than 25 percent. The largest declines occurred in corre- of items spondence (40 percent decline) and direct mail (55 percent decline). Express segment dropped Segment 2005 2007 2009 more than 50 percent. Parcels was the only segment experiencing growth, by 16 percent. Directive 2008/6/EC has not been transposed by Romania. The country is obliged to do so be- Addressed items 464.74 660.13 485.06 fore the extended deadline ends on 31.12.2012. Letters 447.99 640.16 483.08 There is reserved area in correspondence mail. Correspondence 390.35 576.54 345.79 The Romanian NPO experiences little competition on letter mail, but faces substantial compe- Direct mail 51.65 63.61 29.81 tition on express and parcels. Publications 16.76 19.97 1.97 Romania has one ongoing competition case that has been ongoing since 2005. It deals with Unaddressed items 10.06 26.29 24.93 Posta Romana which is accused of using dominant position in segments of direct mail, postal financial services and bulk mail. Cross-border outbound not available not available not available Express 17.99 20.09 9.85 The reserved area postal products area VAT exempt for the Romanian NPO. Parcels 7.27 22.77 26.42 Total 500.05 729.27 765.26 Source: NRA

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Indicator 22.1.3 Revenues from segments in total market, millions of Euro Indicator 22.2.2 Regulation of services based on new technologies Question Answer (in bullet points) Are you aware of the presence of services based In present these kind of services are not defined, but from sta- 22.2. REGULATORY FRAMEWORK AND PRACTICES on new technologies in your market? For exam- tistic reasons, the postal providers are reporting the hybrid mail ple, hybrid mail or virtual delivery networks? items.

In present, NRA is working at the transposition of the 3rd Postal Do you have plans to regulate such products? Directive. The transposition measures may include provisions re- Indicator 22.2.1 National regulatory framework For example, confidentiality of hybrid mail? garding hybrid mail. Question Yes/N Name of Year of enact- Remarks o law ment Source: NRA Is postal law Yes 2002 enacted? Indicator 22.2.3 VAT treatment of postal services Is Directive No 2008/6 trans- Postal product Part of USO? VAT rate Legal basis posed? The services which are Yes, but exemption applicable for all the VAT exemp- Art. 141, par. (1), lett. p) of Is there a law that defines… within the scope of the providers which offer services within the tion the Fiscal Code and Govern- universal service US scope, not only for US provider. ment Decision no. 44/2004. Scope of USO? Yes Act on 2002 (last modi- Postal ifed 2006) Source: NRA Services Quality of USO? Yes Act on 2002 (last modi- Postal ifed 2007) Indicator 22.2.4 Services ensured as universal services under national law Services Segment Defined as universal service by law? Are quality standards specified by law? USO rates? Yes Act on 2002 (last modi- Principles for establishing tariffs for USO. (Yes/Not confirmed/No) (Yes/No/Other than Art. 16) Postal ifed 2007) Services Basic letter post Yes Yes USP accounts? Yes Act on 2002 (last modi- Bulk letters Yes (special tariffs) No Postal ifed 2007) Direct mail Yes No Services Periodicals Yes No Reserved area? Yes Act on 2002 (last modi- Postal ifed 2007) Non-priority letter s Yes No Services Basic parcel post Yes No Authorisation Yes Act on 2002 (last modi- Bulk parcels No - procedures? Postal ifed 2006 Services Note: - means no answers in questionnaire Universal ser- Yes Act on 2002 (last modi- Not active, just legal framework Source: NRA vice fund? Postal ifed 2007) Services User protec- Yes Act on 2002 (last modi- Indicator 22.2.5 Mechanisms to ensure provision of universal service tion? Postal ifed 2007) Question Answer Services Other special Yes Act on 2002 - priority in what concerns the rental of the premises; Describe the role played by the three mechanisms: market forces, designa- The National Company of Romanian rights (which)? Postal - priority in the transport of postal items and postal tion and public procurement. Are other safeguarding measures present? Post had been designated as USP. Services money orders; Source: NRA - priority in what concerns the access at the border points and customs authorities; - to install, maintain, replace or move, free of charge, letter boxes on the public buildings. Source: NRA

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ROMANIA

Indicator 22.2.6 Legal mechanisms to ensure quality of universal service Indicator 22.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Services within universal services If yes, state services Remarks, experiences, Annual measurement of quality of service? Yes NRA can impose other remedies? Yes e.g. letter post items, problems encountered Annual publication of results on quality of service Yes otherwise insert “No” monitoring? What licensing procedure is used? Designation and general Designation for the USP and Source: NRA (designation, general authorisation, individual li- authorisation. general authorisation for any cense) other postal services provider Which universal services are subject to individual None Indicator 22.2.7 Financing the net cost of universal service license? Mechanism Yes/No Mechanism Yes/No Which universal services are subject to general au- All universal services Reserved area Yes Who contributes to the compensation fund? No thorisation? (Incumbent, competitors, other entities) Are authorisation requirements published (trans- Yes Compensation fund No Public procurement No parent)? Size of compensation fund N/A Direct compensation from public funds No Is the USP authorised under Art. 9*? Yes (if present, in Euro) Services outside universal services Answer Remarks, experiences, Source: NRA problems encountered For which services is general authorisation re- All postal services Indicator 22.2.8 Cost of universal service obligation and method for its calcula- quired? No tion For which services is an individual license required (ex ante approval)? Question Answer Note: *)Article 9 of Directive2008/6/EC What is the cost estimate of USO? (if available, in Euro) N/A Source: NRA Source: NRA Indicator 22.2.10 Access to postal infrastructure ensured by Member States Access to: Yes/No Other conditions: Yes/No Post codes No Change of address database No Address database No USP return services No Post office boxes No Street letter boxes - Delivery boxes No Sorting centres - Other conditions: Yes/No Require downstream access to USP No Source: NRA

212

ROMANIA

Indicator 22.2.11 Involvement in competition cases since 2007 Indicator 22.3.2 Accounting requirements Case name Case status Postal product(s) con- Issue Question Answer Question Answer cerned Separation of accounts No. of up/down stream accounts - Competition Council - Ongoing Direct mail , Bulk letters Abuse of a dominant posi- Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - Investigation regarding the Postal financial services tion possible infringement of No. of reserved product accounts 4 Transparency the Competition Law by Unreserved product accounts required? Yes Independent body reviews USP ac- Yes National Company Posta counts? Romana SA - Order no. No. of unreserved product accounts 155 Last review of USP accounts 2009 (2008 175/01.08.2005 connected with Order accounts) no.271/20.11.2006 Body reviewing USP accounts (Type of Independent Application of tariff principles body, e.g. NRA, USP) auditor Note: - means no information To bulk services within USO? Yes NRA issues statement of compliance? No Source: NRA Does USP conclude individual agreements? Yes Last publish statement of compliance N/A Individual agreement: cost-based price re- Yes Publish cost allocation system? No quired? 22.3. REGULATION OF PRICES AND ACCOUNTING Individual agreement: NRA has cost data? Partially USP financial accts audited? Yes USP has special tariffs? Yes Last published financial accounts - To up- and downstream accounts? No Indicator 22.3.1 Method of price regulation Note: - means no answers in questionnaire Segment Method Remark Source: NRA Basic letter post Ex ante For all items in this service category Bulk letters Ex ante For all items in this service category Indicator 22.3.3 Cost accounting system of the USP Direct mail Ex ante Question Answer Periodicals Ex ante For all items in this service category What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Non-priority letter post Ex ante For all items in this service category Is the cost accounting system approved by the National Regulatory Authority? No Basic parcel post Ex ante For all items in this service category Bulk parcels n/a Assessment of the system (pros and cons) Source: NRA - Note: - means no answers in questionnaire Source: NRA

Indicator 22.3.4 Promoting access to and affordability of postal services Question Yes/No If yes, how? Non-discriminatory prices (Art. 12*) required? Yes - Affordability (Art. 12*) defined in national law? No - Note: - means no answers in questionnaire Article 12 of Directive 2008/6/EC Source: NRA

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ROMANIA

22.4. ROLE OF NRA Indicator 22.4.3: NRA independence Yes/N Question Answer Question o Indicator 22.4.1: NRA powers Does the No Who, and The management of ANCOM is performed by one president and two vice- Task or power Yes/No Task or power Yes/No government under what presidents, appointed by the President of Romania, upon the Govern- have a formal conditions, ment’s proposal. Require USP cost allocation system? Yes Levy fines? Yes right to guide can appoint No Fines levied since 1.1.2006 regarding data require- Approve USP cost allocation system? No NRA on poli- NRA head? ments? cies? Review cost allocation to non-USO? No Seek court order? Yes Some NRA No Who, and The mandates of thepresident and vice-presidents of ANCOM end in the Require data from USP (Art.22*)? Yes Cancel unlawful rates? Yes decisions re- under what following circumstances: a) should it be impossible to fulfill the mandate quire gov- conditions, for more than 120 consecutive calendar days out of a 140–day period; b) Require data from non-USPs (Art.22*) Yes Set new rates for USP? Yes ernmental can dismiss should there exist a criminal conviction delivered by final judgement, Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No support? NRA head? where rehabilitation did not take place; c) should there not be observed the 3-month term provided for remedying the incompatibility status regu- Require downstream access? No lated; d) by resignation; e) by death; f) upon expiry. Note: *Under Article 22 of Directive 2008/6/EC Can govern- No Minimum The ANCOM presidents and vice-presidents shall: a) be Romanian citizens Source: NRA ment sus- qualifica- with at least 5 year-experience in the communications field or, in general, pend NRA tions for in the legal or economic field; b) not perform other public or private func- orders? NRA heads tions, except for teaching activities; c) have a clean legal record; d) not hold, directly or indirectly, stock or shares in commercial companies oper- Indicator 22.4.2: NRA human and financial resources ating in the electronic communications or postal services fields or involved Question Answer in other activities which fall within ANCOM’s scope of regulation and not be part of the management bodies of such companies; e) not be members Size of budget? (€ thousands) 64,207.23 (total income in 2009) of any political party during their mandate. Number of total staff ? 657 (at the end of 2009) Source: NRA (Of which, staff dealing with postal affairs) Around 30 Source of NRA budget Fees collected from postal operators generally and from non-postal operators (e.g., telecomm) Indicator 22.4.4 Complaint handling – appeal from NRA decisions Who approves NRA budget Parliament Question Answer Question Answer Source: NRA Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes To whom is NRA decision appealed? Court Number of NRA decisions reversed? 0 Source: NRA

Indicator 22.4.5 Enforcement of competition rules by NRA and cooperation with NCA Question Yes/No Question Yes/No Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? YEs Note: ‘NCA’ national competition authority. Source: NRA

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ROMANIA

Indicator 22.4.6 Regulation of user protection procedures and remedies Indicator 22.5.2 Incumbent profits, 2009, national currency Question Answer Question Answer Indicator 22.5.3 Mail market segmentation User protection procedures in postal or con- Yes, in USP(s) required to issue annual report Yes Percentage opened to Subject to li- sumer law? No. of sig- postal competition cense / au- Names of significant law. Segment nificant Under na- Actual thorisation? competitors Enforcement by NRA or national consumer NRA issues annual report competitors NRA Yes tional law (2008) (Yes/No) protection authority? partially. Addressed items yes Addressed items Applies to non-USP(s) in USO area? Yes. Review of operator decision ensured Yes, by court. Letters emerging yes Letters Applies to non-USO services Yes. Agency reviewing operator - Correspondence reserved area Correspondence Remedies by competent national authority? No. 50g (maximum fine) Direct mail Direct mail Note: - means no answers in questionnaire Publications yes Publications Source: NRA Unaddressed items - No Unaddressed items Cross-border out- Yes Cross-border outbound Indicator 22.4.7 Main issues of discussion between NRA and USP bound Express substantial Yes For 2008, see Express Issue Short description (in bullet points) Annex no. 1 • the quality of services and the correct application of 13850 standard. Parcels substantial Yes For 2008, see Parcels • special tariffs and the associated conditions. Annex no. 1 • competition issues associated with newspaper and magazine distribution Total Total Source: NRA Source: NRA

Indicator 22.4.8: NRA relations with customer associations Indicator 22.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Example of relation Short description Segment Approximate sum of market shares of 3 main competitors

NRA is answering at every customer claim received on its address. Also, the NRA starts a public consultation proce- Letter post (open area) 3.28 % dure every time is needed. Parcels 56.83 % Source: NRA Express 56.68 % Unaddressed items 10.98 % 22.5. MARKET STRUCTURE AND COMPETITION Source: NRA

Indicator 22.5.1:Information about the incumbent Indicator 22.5.5: Mergers and acquisitions of incumbent since 2007 Question Answer Question Answer Name of incumbent ROMANIAN POST (CNPR) Main activities Postal services Legal status State owned Employment 36525 State ownership (percent) 100% Source of financing Business income. Re- served area. Source: USP

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ROMANIA

Indicator 22.5.6 New entrants since 2008 22.7. PRICE PERFORMANCE: Approximate End-to-end or up/downstream Segment No. of entrants market share competition? Name Mail 721 Indicator 22.7.1 Public tariffs, 2004-2009 Express 543 Segment 2005 2007 2009 Logistics 753 Single item: 20g tariff letter 0.50RON 0.50RON 1.00RON Financial - Not applicable Single item: 100g priority mail 2.40RON 1.00RON 2.20RON Others - Single item: 500g insured and registered 3.10RON 3.20RON 5.90RON Source: NRA Single item: 1 kg parcel 1.20RON 1.20RON 2.40RON Bulk mail: composed of 20g letters 0.30RON 0.30RON 0.50RON Bulk mail: composed of 100g letters 0.40RON 0.40RON 0.80RON Indicator 22.5.7 Cross border mail Source: NRA Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? - Yes No 22.8. SOCIAL AND CONSUMERS ASPECTS Note: - means no answers in questionnaire Source: NRA No answers were provided

Indicator 22.5.8 Presence and role of mail consolidators in the market 22.9. TECHNOLOGICAL DEVELOPMENTS Question Answer

Are companies offering mail consolidation Yes services present in the market? Indicator 22.9.1 Innovation, technology and new services Service Do you offer? Volume Do you plan to Remarks How large is the turnover of mail consolida- N/A (Yes/No) (million of offer? tors in relation to the postal market? items) (Yes/No) Have you handled any competition cases ANCOM collaborates with the Competition Council in several investigations regarding a presumed abuse of dominant position by the involving mail consolidator? Hybrid mail yes 0.4 (only CNPR) Romanian Post Company. Virtual delivery of mail - Source: NRA Pick up locations for parcels Not applicable 22.6. STRUCTURE OF MARKET DEMAND (parcel shops) Other examples (insert name) No answers were provided Note: - means no information

Hybrid mail’ refers to items that are despatched quently printed, packed, sorted and delivered ‘Virtual delivery of mail’ refers to the digitalisa Source: NRAbased item despatched by the sender and its elec

in electronic form by the sender and are subse- by the postal operator to the recipient. tion (scanning) by the postal operator of a paper- tronic delivery of the item to the recipient 216

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Indicator 22.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007 Percentage of letter mail benefiting from automated processing (e.g. sorting) Not available Percentage of parcels benefiting from automated processing (e.g. sorting) Not available Source: NRA Indicator 22.9.3: Idicator 22.9.4Indicator 22.9.5 22.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 22.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 85 46.2 97 78.5 - - - - Note: - means no information

the first"D+1 business (% FSC)"day after refers posting. to the "D+2" percent refers of mail in the Source: NRA

Indicator 22.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 to the second"fastest business standard day category"after posting. that Etc. is delivered on dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) ------Note: - means no information Source: Ecorys (2008a)

Indicator 22.10.3 Quality of service indicators Indicator Value Percentage of lost mail not available Number of postal outlets (post offices and agencies) and number of letter 3.49 Postal outlets boxes per 10.000 inhabitants. 7.46 Letter boxes The implementation of CEN standards. Yes ( only ST 13850) Source: NRA

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23.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 23.1.1 Country facts Country facts Value Unit Year Population 5.4 Million 2010 Population growth 0.5 Percent 2000-2010

Population density 111 Pop. / km2 2010 Urbanisation rate 56.5 Percent 2008 GDP 91 PPS, billion 2009 GDP/capita 16,800 PPS 2009 Postal services to GDP ’99/09: 0.32%/0.42% Ratio 1998/2008

NRA Postal Regulatory Office NRA responsibilities? Authorisation, US rates, Uniform tariff rules, Special tariffs, USP accounts, Quality of US, User complaints, Cross subsidy in US, Cross subsidy non-US, state supervision, imposing fines, offences, statistical data collection Incumbent Slovenská pošta, a. s. Main activities of incumbent Postal services, incl. universal postal service, financial services, express and courier services, services realized for third parties Employment, incumbent 15,080 (FTE, as of 31st December 2009) Source of financing Self-financing + reserved service Chapter 23 SLOVAKIA Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

Box 23.1 – Country summary Indicator 23.1.2 Volume of items delivered by segment in total market, millions Taken together, Slovak market experienced dynamic growth a growth of 200%, which was of items mainly driven by a 6 times increase in the volumes of unaddressed items. The traditional ad- Segment 2005 2007 2009 dressed items segment experienced a decline of about 8 percent, however. The volumes of Addressed items 317 346 321 parcels and express remained steady. Letters 300 327 298 Directive 2008/6/EC has not been transposed by Slovakia, although transposition work is in Correspondence 242 285 260 progress and the final law is expected for January 2012, ahead of the extended deadline. Direct mail 58 42 38 The Slovakian postal market segment comprises a reserved area for sizes less than 50g for correspondence, direct mail and cross-border outgoing. The other segments are fully open. Publications 17 19 23 In the market segments of correspondence, direct mail and cross-border outbound the Slova- Unaddressed items 206 224 1400 kian NPO has 95% market share. In publications, express and parcels they have 69%, 54%, Cross-border outbound 16 17 18 and 21% respectively. In unaddressed items they have 5% market share. Express 3 5 6 Since 2007 there has been one postal competition case in Slovakia. Parcels 6 7 7 The USO products sold by the Slovakian NPO are VAT exempt. Total 548 599 1798 Source: NRA

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Authorisa- Yes Law No 507/2001 Coll. on Postal 2001 amended in 2004 Secondary legislation issued by Indicator 23.1.3 Revenues from segments in total market, millions of Euro tion proce- Services as amended (§14- §19), NRA: General authorisation, Segment 2005 2007 2009 dures? Postal licence Mail - - - Universal No service Express - - - fund? Logistics - - - User pro- Yes Law 250/2007 Coll. on user pro- 2007 amended in 2008, Financial - - - tection? tection as amended 2009 Others - - - Other spe- Law No 507/2001 Coll. on Postal §6.4 - the USP has the special Total 366.8 * 435.1 * 471.8 cial rights Services as amended right to use the name “pošta” in Note: - means no answers in questionnaire (which)? English “post” or “post office” for access and contact points of the in the public postal network *Slovak koruna was converted to Eu and § 29.1e) special right to use separate revenue accounts to addr the postal stamps and postal date-stamps. Source.only NRA from total postal market Source: Ministry, NRA

ro by the fix rate set in 2008: 30,126. Postal companies do not essed, unaddressed letters, express items and parcels. Revenues are 23.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 23.2.2 Regulation of services based on new technologies Question Answer (in bullet points) Are you aware of the presence of services based on new technolo- Hybrid mail only as the service of producing Indicator 23.2.1 National regulatory framework gies in your market? For example, hybrid mail or virtual delivery the letters (printing, enveloping and ad- Question Yes/ Name of law Year of enactment Remarks networks? dressing). no Do you have plans to regulate such products? For example, confi- - Is postal Yes Law No 507/2001 Coll. on Postal 2001(transposition of dentiality of hybrid mail? law en- Services as amended (see Eng- the Directive 97/67/EC), Note: - means no answers in questionnaire acted? lish version amended 2004 (trans- www.telecom.gov.sk Source: NRA part Posts, Legislation position of the Directive 2002/39/EC), 2007 Is Directive Not Proposal of the new law on Expected enactment on 2008/6/EC yet postal services is prepared and 1st January 2012 trans- has been submitted to govern- posed? ment in May 2010 Is there a law that defines… Scope of Yes Law No 507/2001 Coll. on Postal 2001 and 2004 Secondary legislation issued by USO? Services as amended (§3, §18.2, NRA: Postal licence 18.3) Quality of Yes Law No 507/2001 Coll. on Postal 2001 amended in 2004 Secondary legislation issued by USO? Services as amended (§18.1 b), NRA: Postal licence 18.5) USO rates? Yes Law No 507/2001 Coll. on Postal 2001, amended in 2004, Decree No. 1/2009 (domestic Services as amended,(§21) 2007. Order of the NRA service rates) and Measure No. No 1MS/2009 (domestic 1/2009 – MS (international ser- and international postal vice rates) rates – universal service) USP ac- Yes Law No 507/2001 Coll. on Postal 2004 counts? Services as amended (§22) Reserved Yes Law No 507/2001 Coll. on Postal 2004 area? Services as amended (§ 7)

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Indicator 23.2.3 VAT treatment of postal services Indicator 23.2.4 Services ensured as universal services under national law - USP Postal product Part of VAT rate Legal basis USP: USO? Segment Defined as universal Are quality standards specified by law? Letter-post items first and second class (letters, direct mail) Yes Exemption Law 222/2004 Coll. as service by law? up to 2kg amended, Law No 507/2001 Coll. on Postal 1st Class letters (including 1st Class Yes By Requirements for the quality of the universal Services as amended Bulk letters) postal service (the annex to the Postal Licence) (scope of the universal Direct mail Yes By Requirements for the quality of the universal service) and Postal licence postal service Postal parcels first and second class up to 15kg Yes Exemption Law 222/2004 Coll. as amended, Law No Periodicals No No 507/2001 Coll. on Postal 2nd Class letters (including 2nd Class Yes By Requirements for the quality of the universal Services as amended bulk letters) postal service (scope of the universal 1st Class parcels (including 1st Class Yes By Requirements for the quality of the universal service) and Postal licence bulk parcels) postal service Services:registration service, insurance letter – post items Yes Exemption Law 222/2004 Coll. as nd nd and postal parcels, delivery to the addressee in person, ad- amended, Law No 2 Class parcels (including 2 Class Yes By Requirements for the quality of the universal vice of delivery, fragile and cumbersome postal parcels ser- 507/2001 Coll. on Postal bulk parcels) postal service vices, repetitive delivery (only if combined with registered Services as amended Postal money order (cash-to-cash) By the Postal Licence By Requirements for the quality of the universal letter, advice of delivery and delivery to the addressee in (scope of the universal postal service person), in domestic service return or redirection of a letter- service) and Postal licence post item if combined with the service COD, insurance or NRA: registered and return of an insured letter and return of an Segment Defined as universal service by law? Are quality standards specified by law? postal parcel. Money orders of the postal payment services. Yes Exemption Law 222/2004 Coll. as Basic letter post Yes No by law, but secondary legislation Other products are with 19 % VAT. amended, Law No Bulk letters Yes No by law, but secondary legislation 507/2001 Coll. on Postal Direct mail Yes No by law, but secondary legislation Services as amended (scope of the universal Periodicals No No service) and Postal licence Non-priority letters Yes No by law, but secondary legislation Source: Ministry, NRA Basic parcel post Yes No by law, but secondary legislation Bulk parcels Yes No by law, but secondary legislation Note: Quality standards are not specified by law, bu

Source:which NRA, is USP part of the postal license in li

Indicator 23.2.5 Mechanisms to ensure provision of universal service t they are set in Requirements for the US quality Question ne Answerwith §18.1 letter b) of the Postal Law Describe the role played by the three mechanisms: Designation. See Law No 507/2001 Coll. on Postal Services as market forces, designation and public procure- amended (§16-§20), holder of the Postal licence – universal ment. Are other safeguarding measures present? service provider is Slovenská pošta, a. s. Source: NRA, Ministry

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Indicator 23.2.6 Legal mechanisms to ensure quality of universal service Indicator 23.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Services within universal ser- If yes, state services e.g. letter Remarks, experiences, Annual measurement of quality of service? Yes, external NRA can impose other remedies? Yes vices post items, otherwise insert “No” problems encountered measurement What licensing procedure is used? General authorisation. Individual li- Annual publication of results on quality of service Yes cense monitoring? Which universal services are subject Universal service: letter post items, Individual license is granted only Source: NRA to individual license? parcel post items 15 kg, registered, in- to USP sured items, services connected with registered and insured items. Postal Indicator 23.2.7 Financing the net cost of universal service payment service Mechanism Yes/No Mechanism Yes/No Which universal services are subject Postal services: Letter post items up to General authorisation is for all to general authorisation? 2 kg, parcel post items up to 10 kg and postal companies Reserved area Yes Who contributes to the compensation fund? - up to 20 kg for cross-border parcels (Incumbent, competitors, other entities) Are authorisation requirements pub- Yes www.posturad.sk Compensation fund No Public procurement No lished (transparent)? Size of compensation fund N/A Direct compensation from public funds No Is the USP authorised under Art. 9*? Yes (if present, in Euro) Note: - means no answers in questionnaire Services outside universal ser- Answer Remarks, experiences, vices problems encountered Source: NRA For which services is general authori- Postal services outside the reserved sation required? area up to 50 kg. Indicator 23.2.8 Cost of universal service obligation and method for its calcula- For which services is an individual li- No tion, if available cense required (ex ante approval)? Question Answer Note: - means no information Cost estimate of universal service (if avail- NRA: N/A (Cost was calculated by USP, but not approved by NRA) able, in Euro) USP: 50 mil. EUR based on 2007 data of the USP costing model Source:*Article NRA 9 of Directive2008/6/EC (without an impact of intangible benefits and WACC) Name of calculation method (if available) NAC (without an impact of intangible benefits and WACC) Indicator 23.2.10 Access to postal infrastructure ensured by Member States NRA: N/A Short description of calculation method (if Access to: Yes/No Other conditions: Yes/No available) USP: The calculation method has been based on a comparison with a hypothetical USP who would not operate ineffective post offices Post codes No Change of address database No (only 30 % of the present number) Address database No USP return services No Is a thorough documentation of calculation NRA: N/A Post office boxes No Street letter boxes No method available? Where? USP: No Delivery boxes Yes Sorting centres No Is calculation method approved by the NRA? No Does NRA calculate USO cost? NRA: This year for the first time with assistance of Deloitte Advi- Other conditions: Yes/No sory. Result is expected in September 2010 Require downstream access to USP No Source: USP Source: NRA

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Indicator 23.2.11 Involvement in competition cases since 2007 Indicator 23.3.2 Accounting requirements Case name Case status Postal Issue Question Answer Question Answer product(s) Separation of accounts No. of up/down stream accounts - concerned Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA Yes Case COMP/39.562 – Ongoing (Commission Decision of 7 October Hybrid mail Extension of the postal Slovakian Postal 2008 on the Slovakian postal legislation relat- monopoly of the postal in- No. of reserved product accounts 7 Transparency Law (pursuant to Ar- ing to hybrid mail services, Letter of Formal cumbent Slovenská pošta Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes ticle 86(3) of the EC Notice – Infringement No. 2008/2333, 17 De- (Infringement of Article Treaty, now Article cember 2008, Reasoned Opinion – Infringe- 86(1), in conjunction with No. of unreserved product accounts 96 Last review of USP accounts 2008 106(3) of the TFEU) ment No. 2008/2333, 29 October 2009) Article 82 of the EC Treaty) Application of tariff principles Body reviewing USP accounts (Type of body) Firm con- Infringement has been suspended conditionaly tracted by Note: C 322/10 EN Official Journal of the European Union 17.12.2008 Bulk services within USO? Yes USP Does USP conclude individual agreements? Yes NRA issues statement of compliance? Yes http://eur-lex.europa.eu/Lex Individual agreement: cost based price required Yes Last publish statement of compliance 2008 the Competition Directorate General website address: Individual agreement: NRA has cost data? Yes Publish cost allocation system? No http://ec.europa.eu/comm/competition/antitrust/cases/index.html USP has special tariffs? Yes* USP financial accounts audited? Yes UriServ/LexUriServ.do?uri=OJ:C:2008:322:0010:0011:EN:PDF parallel appeal procedure: Action brought on Up- and downstream accounts? No Last published financial accounts 2008 Case T-556/08 Slovenská pošta, a.s. agains Note: - means no answers in questionnaire 7.3.2009 EN Official Journal of the European Union C 55/35 *) Special tariffs are understood http://eur-lex.europa.eu/Lex Source: NRA Source: USP 17 December 2008 — Slovenská pošta v Commission 23.3. REGULATION OF PRICES AND ACCOUNTINGt Commission of the European Communities Indicator 23.3.3 Cost accounting system of the USP UriServ/LexUriServ.do?uri=OJ:C:2009:055:0035:0035:EN:PDF as discounts, which are published Question Answer Indicator 23.3.1 Method of price regulation What type of cost accounting system does the FAC, Slovenská pošta, a. s. uses the cost accounting system USP use? (e.g. LRIC, FAC, LRMC) based on the ABC method (Activity Based Costing), where total Segment Method Remark costs are fully allocated to the products and services. Basic letter post Ex ante For all items in this service category regulated as maximal prices Is the cost accounting system approved by the Yes Bulk letters Ex ante For all items in this service category regulated as maximal prices National Regulatory Authority? Direct mail Ex ante For all items in this service category regulated as maximal prices Assessment of the system (pros and cons) Periodicals No regulation - Non-priority letter post Ex ante For all items in this service category regulated as maximal prices Basic parcel post Ex ante For all items in this service category regulated as maximal prices Note: - means no answers in questionnaire Bulk parcels Ex ante For all items in this service category regulated as maximal prices FAC = fully allocated cost accounting Source: NRA Source: NRA, USP

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Indicator 23.3.4 Promoting access to and affordability of postal services Indicator 23.4.3: NRA independence Question Yes/No If yes, how? Question Yes/No Question Answer Non-discriminatory prices (Art. Yes Ministry: Law No 507/2001 Coll. on Postal Services as amended §3.1, Does the government have a formal right No Who, and under what conditions, can ap- Parliament 12*) required? §13.2c) and §21. Ex-ante regulation, cost-oriented prices. to guide NRA on policies? point NRA head? NRA: Prices are valid for all users under the same conditions Some NRA decisions require governmen- No Who, and under what conditions, can Parliament Affordability (Art. 12*) defined Yes Ministry: Law No 507/2001 Coll. on Postal Services as amended §3.1. tal support? dismiss NRA head? in national law? NRA: Prices are cost-oriented, approved by NRA on the base of infla- Can government suspend NRA orders? No Minimum qualifications for NRA heads No tion rate and regulated ex-ante Source: NRA Note: *) Article 12 of Directive 2008/6/EC Source: Ministry, NRA Indicator 23.4.4 Complaint handling – appeal from NRA decisions 23.4. ROLE OF NRA Question Answer Question Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes To whom is NRA decision appealed? Court Number of NRA decisions reversed? 0 Indicator 23.4.1: NRA powers Source: NRA Task or power Yes/No Task or power Yes/No

Require USP cost allocation system? Yes Levy fines? Yes Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data require- No Indicator 23.4.5 Enforcement of competition rules by NRA and cooperation with ments? NCA Review cost allocation to non-USO? Yes Seek court order? No Question Yes/No Question Yes/No Require data from USP (Art.22*)? Yes Cancel unlawful rates? Yes Who is the primary enforcer of competition Both NRA NRA obliged to share info with NCA? Yes Require data from non-USPs (Art.22*) Yes Set new rates for USP? Yes rules? and NCA Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Note: ‘NCA’ national competition authority. Require downstream access? No Source: NRA Note: *) Under Article 22 of Directive 2008/6/EC

Source: NRA Indicator 23.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Indicator 23.4.2: NRA human and financial resources User protection procedures in postal or con- Both USP(s) required to issue annual report Yes Question Answer sumer law? Size of budget? (€ thousands) 416 Enforcement by NRA or national consumer NRA NRA issues annual report Yes Number of total staff ? 16 protection authority? (Of which, staff dealing with postal affairs) 11 Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Source of NRA budget General budget of the State or government Applies to non-USO services Yes Agency reviewing operator NRA Who approves NRA budget Parliament Remedies by competent national authority? Yes Source: NRA (maximum fine) Note: - means no information Source: NRA

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Indicator 23.4.7 Main issues of discussion between NRA and USP 23.5. MARKET STRUCTURE AND COMPETITION Issue (Short description in bullet points) USP: State regulation, State supervision over the provision postal services Indicator 23.5.1:Information about the incumbent • Setting general rules for providing postal services that are not subject to postal reservation; to put up obligation for provision of the universal service and setting requirements for operating the public postal Question Answer Question Answer network; regulation of provision of the universal service and the execution of postal payment service; Name of in- Slovenská Main activi- 1. provision of a universal service within the scope laid down in the regulation of postal charges for the provision of the universal service and services of the postal payment cumbent postal licence pursuant to special legislation; pošta, a. s. ties service, etc. 2. provision of postal services; • Controlling the fulfilment of the conditions for providing postal services under the Act on Postal Ser- 3. postal operations throughout the Slovak Republic within the fol- vices and the general authorization issued and controlling the observance of the postal reservation; lowing scope – transport and delivery of letters, parcels and money controlling the provision of the universal service particularly the control of the observance of qualitative orders (including electronic mail); collection, transport and delivery and development conditions, stipulated for the universal service in the postal license and price control of postal items (including payment services in international service); 4. express and courier carriage of postal items, including documents, relating to postal charges for the provision of the universal service; ordering tat ascertained deficiencies with a guaranteed time of delivery, including international service; e removed and activities contrary to this Act and authorisation issued be brought to an end; imposing 5. the set-up, running and development of a uniform postal network penalties for administrative offences and dealing with offences, etc. throughout the Slovak Republic; 6. publication of specialized literature, operational regulations, NRA : Postal conditions, postal license, regulated prices, complaints printed aids, forms, promotional and information materials relating Source: NRA, USP to company business; 7. issuance of postage stamps; 8. archiving of postage stamps and forms and related work, including the production of commemorative postmarks; Indicator 23.4.8: NRA relations with customer associations 9. postmark agenda, establishment of temporary post offices, including franking machine advertisement; Example of relation (Short description in bullet points) 10. activity of the Postal Museum. No direct relations Legal status Joint-stock Employment 15,080 (FTE, as of 31st December 2009) Source: NRA company State owner- 100 % Source of fi- Self-financing + reserved service ship (percent) nancing Source: USP

Indicator 23.5.2 Incumbent profits, 2009, national currency Statistic Value Total profit in 2009 132,220.49 € Percentage of profit coming from letter mail 5.50 % (including parcel service – universal postal service) Percentage of profit coming from reserved area (if present) 1.13 % Source: USP

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Indicator 23.5.3 Mail market segmentation Indicator 23.5.6 New entrants since 2008 Percentage opened No. of sig- Segment No. of Approximate End-to-end or up / down- Name to competition Subject to li- nificant entrants market share stream competition? Under na- cense / au- competi- Names of significant com- Mail 4 0.2 End-to-end Slovak Mail Service, Mediaprint- Actual Segment tional law thorisation? tors petitors Kappa Pressegrosso, Cromwell, Addressed items Express 1 0.2 End-to-end Der Kurier Letters 20 % 5 % Yes Cromwell, SPS,DPD Logistics - Correspondence reserved area Yes Financial - up to 50g; Others - Direct mail reserved area Yes Source: NRA up to 50g, Publications 100 % 31 % Yes 2 Slovak mail, Cromwell Unaddressed items 100 % 95 % No 3 KOLOS, TNTPost, Slovak mail Indicator 23.5.7 Cross border mail Cross-border out- reserved 5 % Yes TNT, DHL, SPS,DPD, Main actors (if not re- Terminal dues regu- bound area, 50g Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Express 100 % 79 % Yes 5 DPD, Xpress, DHL, SPS, TENexpres 16.2 million items per year Yes Yes up to 50g Parcels 100 % 46 % Yes 3 SPS, GLS, Xpress Source: NRA Total 80 % 43 %

Source: NRA Indicator 23.5.9 Presence and role of mail consolidators in the market Question Answer Indicator 23.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Are companies offering mail consolidation services present in the market? No information Segment Approximate sum of market shares of 3 main competitors How large is the turnover of mail consolidators in relation to the postal market? No information Have you handled any competition cases involving mail consolidator? No Letter post (open area) 21 % Source: NRA Parcels 45 %

Express 66 % Unaddressed items 84 % Source: NRA

Indicator 23.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired company Main activities of the Main objectives behind the ac- Date acquired company quisition No mergers or acquisitions of Slovenská pošta, a. s. Source: USP

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23.6. STRUCTURE OF MARKET DEMAND Indicator 23.6.4 Trends in mail substitution Short description (in bullet points)

• “Domestic letter post has substantially declined driven by volume reductions in correspondence and publica- Indicator 23.6.1 Revenues and volumes generated by consumers vs. business tions (delivered by Slovenská Pošta a.s.). It is unclear whether the volume development actually reflects the market development (maybe loss of market share of Slovenská Pošta a.s. due to hybrid mail)” ITA/WIK customers in 2009, national currency, millions of items (2009b) Segment Business customers Private consumers Approximate • “Hybrid mail is a growing segment in the Slovakian letter post market mainly used by business customers coming from the financial industry” ITA/WIK (2009b) Revenue Volume Revenue Volume market share in the total market • “Establishment of the first hybrid mail centre in Bratislava 2002. Establishment of the second hybrid mail centre in Kosice 2006” ITA/WIK (2009b) Addressed items (domestic) 79,524,426 226.8 21,080,587 57.5 Source: ITA/WIK (2009) Letters 77,551,587 217.9 21,080,587 57.5 95 % Correspondence 68,677,917 185.5 20,514,183 55.4 Reserved area 65,010,870 185.2 11,472,506 32.7 Indicator 23.6.5 Effect of the financial crisis on revenues in 2009 Direct mail 8,873,670 32.4 566,404 2.1 Segment Estimate of the effect of the financial crisis on revenues Publications 1,972,839 8.9 0 0 69 % (please write ‘decline’ or ‘increase’ below, where relevant) Unaddressed items 2,294,589 164.4 23,178 1.7 5 % Less than 5% 5-15% more than 15% Cross-border mail outbound 11,781,242 11.8 6,069,125 6.1 95 % Addressed items (domestic) Decline Express 4,275,888 0.7225,047 0.04 21 % Letters Decline Parcels 8,396,364 2.82,508,005 0.8 54 % Correspondence Decline Total 171,283,379 591.841,378,448 98.8 57 % Reserved area Decline Source: USP Direct mail Decline Publications Decline Indicator 23.6.2 Growth rate in revenues and volumes generated by consumers Unaddressed items Decline Cross-border mail outbound Increase vs. business customers between 2008-2009 Express Increase Segment Business customers Private consumers Parcels Decline Revenue Volume Revenue Volume Total Addressed items (domestic) 94 % 90 % 91 % 88% Source: USP Letters 94 % 90 % 91 % 88 % Correspondence 95 % 93 % 90 % 88 % Reserved area 106 % 99 % 106 % 99 % Direct mail 87 % 75 % 106 % 91 % Publications 88 % 82 % - - Unaddressed advertising 79 % 78 % 79 % 78 % Cross-border mail outbound 120 % 119 % 105 % 105 % Express 121 % 126 % 100 % 104 % Parcels 115 % 92 % 129 % 103 % Total Note: - means no answers in questionnaire Source: USP Indicator 23.6.3:

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23.7. PRICE PERFORMANCE: 23.8. SOCIAL AND CONSUMERS ASPECTS

Indicator 23.7.1 Public tariffs, 2004-2009 Indicator 23.8.1 Employment indicators, 2009 Segment 2005 2007 2009 USP st Employment (thousand), in full time equivalents 15,080 Single item: 20g tariff letter (1 Class) SKK 15 SKK 16 0.60 € / 0.53 € (until (The tariff refers to June 30, 2009) Percentage of total country employment 0.64 the weight category (The tariff refers to Share of civil servants No civil servants of 50g.) the weight category of 50g.) Share of part time and temporary employment 30.84 % 20g tariff letter (2nd Class) SKK 9 SKK 10 0.40 € / 0.33 € (until Share of outsourced and subcontracted employment 217 (FTE) (The tariff refers to June 30, 2009) Source: USP the weight category (The tariff refers to of 50g.) the weight category of 50g.) Single item: 100g tariff letter (1st Class) SKK 18 SKK 18 0.70 € / 0.60 € (until Indicator 23.8.2 Wage and productivity indicators June 30, 2009) Incumbent nd 100g tariff letter (2 Class) SKK 12 SKK 14 0.50 € / 0.46 € (until Wages as a proportion of total costs 52.16 % June 30, 2009) Average wage per hour (€) EUR 3.69 Single item: 500g registered letter (1st Class) SKK 32 SKK 34 1.40 € / 1.13 € (until June 30, 2009) Source: USP 500g registered letter (2nd Class) SKK 26 SKK 30 1.20 € / 1.00 € (until June 30, 2009) st 500g insured letter (1 Class) SKK 43 SKK 35 1.60 € / 1.16 € (until 23.9. TECHNOLOGICAL DEVELOPMENTS June 30, 2009) 500g insured letter (2nd Class) SKK 37 SKK 31 1.40 € / 1.03 € (until June 30, 2009) Single item: 1kg parcel (1st Class) SKK 68 SKK 69 2.80 € / 2.29 € (until Indicator 23.9.1 Innovation, technology and new services (The tariff refers to (The tariff refers to June 30, 2009) the weight cate- the weight category (The tariff refers to Service Do you offer? Volume Do you plan to gory of 2kg.) of 2kg.) the weight category (million of items) offer? of 2kg.) Hybrid mail Yes 26.3 N/A 1kg parcel (2nd Class) SKK 54 SKK 49 2,20 € / 1.63 € (until (The tariff refers to (The tariff refers to June 30, 2009) Virtual delivery of mail No N/A Yes the weight cate- the weight category (The tariff refers to Pick up locations for parcels (parcel shops) - Not applicable - gory of 2kg.) of 2kg.) the weight category Note: - means no answers in questionnaire of 2kg.) st Source: USP Bulk mail: composed of 20g letters (1 Class) Bulk mail cost is not recorded separately. composed of 20g letters (2nd Class) Bulk mail cost is not recorded separately. Bulk mail: composed of 100g letters (1st Class) Bulk mail cost is not recorded separately. Indicator 23.9.2 Statistics on technological progress nd composed of 100g letters (2 Class) Bulk mail cost is not recorded separately. Indicator Value in Increase/decline Source: USP 2009 since 2007 Percentage of letter mail benefiting from automated processing (e.g. sorting) 54.51 % 58.38 % (increase) Percentage of parcels benefiting from automated processing (e.g. sorting) 33 % 33 % Source: USP

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Indicator 23.9.3 Supply of e-commerce services, total market 23.10. QUALITY OF SERVICE DEVELOPMENTS Question Answer - Incumbent Do you supply own e-commerce services? What kind? Yes – PostShop http://www.postshop.sk What share of turnover do you generate from own e-commerce ser- 0.15 % - increase Indicator 23.10.1 Transit time for domestic priority mail, 2009 vices? What is the trend? D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 What own e-commerce services do you plan to develop? - dard (% actual dard (% actual dard (% actual dard (% actual Are you able to indicate how the percentage of your turnover that - FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) originates from or is related to third-party e-commerce transactions (e.g. purchases on the internet) 96 96.01 - 99.42 - 99,90 - 99,95 Note: - means no answers in questionnaire Note: - means no answers in questionnaire Source: USP Source: NRA

Indicator 23.9.4 Supply of hybrid mail services, total market Indicator 23.9.5 Developments within networks and mail consolidation services Indicator 23.10.2 Transit time for cross-border priority mail, 2009 Question Answer D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual Have you carried out a major reorganisation of No your logistics network? For example, decentral- FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) ising, implementing hub & spoke systems? 88* 94.9* ------Do you use different networks for letters and No (there is a single network for collection, sorting, transport parcels at collection, sorting, transportation or Note: - means no information and delivery of letters and parcels. delivery levels? What are the reasons? * From inbound office of exchange to delivery What is the relative importance of road, rail and Road transport – 1st Class Letters and Parcels, 2nd Class Letters; Source: USP air as modes of transportation for mail? Have Express service these shares changed recently? Why? nd nd Rail transport – 2 Class Parcels, a part of 2 Class Letters, Di- Indicator 23.10.3 Quality of service indicators rect Mail Air transport – no Indicator Value A recent switch to rail transport has been caused by the imple- Percentage of lost mail 0,006 % mentation of the toll duty in the road transport (from the Number of postal outlets (post offices and agencies) At least 1 post office for each municipality with more than and number of letter boxes per 10.000 inhabitants. 5 000 inhabitants, max distance to the post office 10 km, beginning of 2010) The implementation of CEN standards. Yes Source: USP Source: USP

Indicator 23.9.6 The most important environmental initiatives implemented Brief answer (in bullet points) • Monitor processes and activities that affect compliance with the established mechanisms for protection of the environment • Meet the requirements of STN ISO 14001:2004. The long-term aim of Slovenská pošta, a. s., is to reduce the negative effects of the community on the environment. • Waste management: separation of different types of waste in municipal waste component, recycling, reduce production of waste - other as well as dangerous. Source: USP

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24.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 24.1.1 Country facts Country facts Value Unit Year Population 2.0 Million 2010 Population growth 3.0 Percent 2000-2010 Population density 101 Pop. / km2 2010 Urbanisation rate 48.5 Percent 2008 GDP 42 PPS, billion 2009 GDP/capita 20,600 PPS 2009 Postal services to GDP ’99/09: 0.45%/0.51% Ratio 1998/2008

NRA Post and Electronic Communications Agency of the Republic of Slovenia (APEK) NRA responsibilities? Authorisation, Administrate USO fund - licensing, US rates, USP accounts, Quality of US, User complaints, Prohibition of cross subsidisation, Supervision, Access to postal network Incumbent Pošta Slovenije, d.o.o Main activities of incumbent Postal services, Financial services, Sales of merchandise Employment, incumbent 6.705 empl. (31.12.2009) Source of financing Equity Chapter 24 SLOVENIA Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

Indicator 24.1.2 Volume of items delivered by segment in total market, millions Box 24.1 – Country summary of items Segment 2005 2007 2009 Slovenia has transposed Directive 2008/6/EC. Addressed items - - - Slovenia is the only country where the number of FTEs at the NPO has increased in the time period 2007-2009 (increase by almost 4 percent). Letters - - - The market for correspondence of items less than 50g is reserved area. All other areas are fully Correspondence 295 290 - open. Direct mail 37,8 49,2 - In letter mail the Slovenian NPO has a market share of 95% of the open area. In direct mail Publications 67 84,4 - and unaddressed items there are is very little competition. In parcels and express the Slove- Unaddressed items 383 500 - nian NPO has a market share of 50% with larger share of domestic and smaller share of international. Cross-border outbound 6,3 6.4 - USO was changed in 2009; the limit for parcels in USO went down from 20 kg to 10 kg. Express 0,6 0.47 - USO fund set up, but not yet activated, to compensate Pošta Slovenije for net cost of USO. Parcels 8,2 10.46 - Case Pg 542/09-1 is the only competition case since 2007 related to postal services. The case Total 797,9 940.9 - deals with unfair competition practise in the field of unaddressed items distributions. Note: - means no answers in questionnaire None of the products sold by the Slovenian NPO are VAT exempt. Data for 2009 not available as of second half 2010. Source: NRA

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Quality of USO? Yes Postal Services Act 2009 Indicator 24.1.3 Revenues from segments in total market, millions of Euro Segment 2005 2007 2009 General Act on the 2010 Mail - - - Quality of the Univer- sal Postal Service Pro- Express - - - vision Logistics - - - (Splošni akt o kako- vosti izvajanja univer- Financial - - - zalne poštne storitve) Others - - - Total 240.245 272.864 - USO rates? Yes Postal Services Act, 2009 Postal Services Act Note: - means no answers in questionnaire Articles 35, 37, 38 General terms for the 2007 (the providers of postal services (interchange- provision of a univer- able services and universal service) must pub- Source:Revenues NRA are only available in total and not yet for 2009. sal postal service lish the general terms and conditions of provid- (published by Pošta ing postal services and the prices of these ser- Slovenije d.o.o. – cur- vices; prior to the entry into force provider must 24.2. REGULATORY FRAMEWORK AND PRACTICES rently the only US pro- obtain the NRA’s consent; postal services shall vider in the Republic be paid according to the valid tariff, a summary of Slovenia) of which must be available to users)

Indicator 24.2.1 National regulatory framework USP accounts? Yes Postal Services Act 2009 Separate accounts and prohibition of subsidies Question Yes/ Name of law Year of Remarks (Article 6). no enact- Splošni akt o ment računovodskih eviden- 2010 cah in prepovedi sub- Is postal law Yes Postal Services Act 2009 http://www.mvzt.gov.si/fileadmin/mvzt.gov.s vencioniranja enacted? (Zakon o poštnih i/pageuploads/DEK/Elektronske_komunikacije (- General Act on storitvah (ZPSto-2)) /Zakoni/ZakPost_2009-Ur.l._51-EN.pdf (unof- Separate accounts ficial English translation) and prohibition of Act on amendments subsidies) of Po-stal Services Act (Zakon o spremembah Reserved area? Yes* Postal Services Act 2009 A universal service provider on the day that Za-kona o poštnih Postal Services Act enters into force shall have storitvah (ZPSto-2A)) exclusive right to the provision of reserved postal services until 31 December 2010. Is Directive Yes Postal Services Act 2009 / 2008/6 trans- (Zakon o poštnih Authorisation Ministry: Postal Services Act 2009 1. general authorisation: postal services may be posed? storitvah (ZPSto-2)) procedures? No provided by any natural or legal person taking NRA: Yes NRA: Zakon o poštnih into consideration the essential Is there a law storitvah (ZPSto-2) requirements and provided the person has no- that defines… tified the NRA Scope of USO? Yes Postal Services Act 2009 General outline (following the Postal Directive) 2. If the NRA establishes that the submitter ((Zakon o poštnih wishes to provide interchangeable services, it storitvah (ZPSto-2)) Articles 3,5 shall issue a Article 3(2) declaratory order on it A universal service shall include the following 3. NRA (on the basis of a decision) shall desig- postal services: nate a universal service provider and shall im- 1. clearance, sorting, transport and delivery of pose upon him the obligation of providing uni- postal items weighing up to 2 kg; versal services, when it considers that this is 2. clearance, sorting, transport and delivery of required to ensure the quality of universal ser- postal packages weighing up to 10 kg; vice provision in a particular part of the territory 3. services for registered items and insured of the Republic of Slovenia. postal items and 4. routing of postal items for blind and partially sighted persons.

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Universal ser- Yes Postal Services Act 2009 Article 19(3): vice fund? On the basis of its request and under the condi- Indicator 24.2.4 Services ensured as universal services under national law tions referred to in the first paragraph of this Segment Defined as universal service by law? Are quality standards specified by law? article, the universal service provider shall receive compensation for Basic letter post Yes Yes universal service provision from a compensa- Bulk letters No Yes tion fund which shall be established and managed by the NRA. Direct mail No No User protec- Yes Postal Services Act 2009 Chapter VI. (Quality of services and protection Periodicals NRA: Yes No tion? of users of postal services) USP: No Other special No Postal Services Act 2009 Generally there are no special rights. Non-priority letter s NRA: No NRA: No rights (which)? From users perspective there are these rights: USP: Yes USP: Yes the routing of some postal items even during Basic parcel post Yes Yes strikes, Bulk parcels No No confidentiality of postal items, personal data protection, liability for damage caused by the Note: In Republic of Slovenia there is no di postal service providers. Note: - means no information In the scope of Universal Service periodicals are *The reserved area is valid until 31.12.2010 Source:are! NRA, USP

Source: NRA (=APEK), USP, MINISTRY stinction between priority and non-priority mail! Indicator 24.2.5 Mechanisms to ensure provision of universal service Question Answer not included and at the same time Printed matters Indicator 24.2.2 Regulation of services based on new technologies Describe the role played by the Slovenia, through Postal Services Act, applied the provision of the universal ser- Question Answer (in bullet points) three mechanisms: market vice by market forces. If the market itself does not ensure the (quality of) provi- forces, designation and public sion of universal service, NRA designates one or several undertakings to provide Are you aware of the presence of services based Just being introduced in Slovenia (new request for the access to procurement. Are other safe- different elements of the universal service or to cover different parts of the terri- on new technologies in your market? For exam- the delivery network) guarding measures present? tory. Postal Services Act prescribes general authorisation of postal services (Arti- ple, hybrid mail or virtual delivery networks? cle 24(1)). The NRA shall designate the universal service provider by a decision Do you have plans to regulate such products? Hybrid mail as an electronic communication service is subject of based on an analysis of the situation or by a decision based on a public tender (Ar- For example, confidentiality of hybrid mail? rules of electronic communications regulatory framework (also ticles 8 to 18). confidentiality). Physical delivery is subject to requirements of the postal regulatory framework. Source: Ministry, NRA Source: NRA Indicator 24.2.6 Legal mechanisms to ensure quality of universal service Indicator 24.2.3 VAT treatment of postal services Mechanism Yes/No Mechanism Yes/No Postal product Part of USO? VAT rate Legal basis NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes All postal services Yes and no 20% Value Added Tax Act, 2010 (considering of changing the act in Annual measurement of quality of service? Yes (by inde- NRA can impose other remedies? Yes (including USO) part of VAT for public universal postal services; goal: no VAT for pendent body) public postal services) Annual publication of results on quality of Yes Source: NRA, Ministry service monitoring? Source: NRA

Indicator 24.2.7 Financing the net cost of universal service

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Mechanism Yes/No Mechanism Yes/No Indicator 24.2.9 Authorisation/licensing for services within and outside universal Reserved area Yes (No)* Incumbent and providers of interchangeable ser- Yes service area vices. Compensation fund Yes Not established, forseen in 2011. Services within universal services If yes, state services e.g. letter post items, otherwise insert “No” Size of compensation fund None ac- No (if present, in Euro) tive (yet) What licensing procedure is used? All three according to Article 9 of the Postal Directive. Note: *) Remark: Reserved area until 2011 (liberalisation). Which universal services are subject to individual license? Full scope of USO (Article 3 of the Postal Source: NRA Directive) and additionally postal services for blind and partial signed. Indicator 24.2.8 Cost of universal service obligation and method for its calcula- Which universal services are subject to general authorisation? Inter-changeable services (recital 27 of the Postal Directive). tion Are authorisation requirements published (transparent)? Yes Question Answer Is the USP authorised under Art. 9*? Yes What is the cost estimate of USO? (if NRA: No estimation available Services outside universal services Answer available, in Euro) USP: 96.519.256 EUR (2009) - USO represents 34.3 % in total revenue or 43.9 % in total cost. For which services is general authorisation required? Services outside scope of USO (see above the scope of USO). What is the name of calculation NRA: Net Avoidable Cost Method method? (if available) USP: Activity Based Costing – Fully Allocated Cost Accounting For which services is an individual license required (ex ante approval)? No. Short description of calculation method USP: Costs of activities are allocated to cost carriers (i.e. products and Note: *) Article 9 of Directive2008/6/EC (if available) services) on the basis of cost drivers consumed Source: NRA Is a thorough documentation of calcula- USP: ABC Costing Model Methodology (in Slovene language) is annually tion method available? Where? renewed and delivered to NRA Indicator 24.2.10 Access to postal infrastructure ensured by Member States Is calculation method approved by the NRA: The system will impose approval of NRA NRA? USP: Yes Access to: Yes/No Other conditions: Yes/No Does NRA calculate USO cost? NRA: Not until now Post codes Yes Change of address database Yes Address database Yes USP return services Yes Note: ABC method is used in order to calculate the cost of services. Post office boxes Yes Street letter boxes No Source: NRA Delivery boxes No (part of down- Sorting centres No (part of downstream access) stream access) Other conditions: Yes/No Require downstream access to USP Yes Source: NRA

Indicator 24.2.11 Involvement in competition cases since 2007 Case name Case status Postal product(s) Issue concerned Pg 542/09-1 Ongoing Unaddressed direct mail Unfair competition practise in the field of unaddressed mail distribution Source: USP

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24.3. REGULATION OF PRICES AND ACCOUNTING Indicator 24.3.3 Cost accounting system of the USP Question Answer Indicator 24.3.1 Method of price regulation What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated cost) Segment Method Remark Is the cost accounting system approved by the National Regulatory Authority? Yes Basic letter post Ex ante For all items in this service category Assessment of the system (pros and cons) Bulk letters - Direct mail Ex post NCA (no investigation so far) Note: - means no answers in questionnaire Periodicals Ex ante For all items in this service category Source: NRA Non-priority letter post Basic parcel post Ex ante For all items in this service category Indicator 24.3.4 Promoting access to and affordability of postal services Bulk parcels Ex post NCA (no investigation so far) Question Yes/ If yes, how? Note: Direct mail and Bulk parcels are No Source: NRA Non-discriminatory prices Yes Article 35 (Price of the universal service) (Art. 12*) required? 35(3) Tariffs must be transparent and non-discriminatory. Affordability (Art. 12*) de- Yes Article 35 Indicator 24.3.2 Accounting requirementsnot in the scope of Universal Service. fined in national law? 35(1) Universal service providers must provide the services falling within the Question Answer Question Answer scope of the universal service according to prices that shall be: - affordable and must be such that all users, regardless of their geographical lo- Separation of accounts No. of up/down stream accounts N/A cation, have access to the services provided; Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA N/A - cost-oriented and provide incentives for efficient universal service provision; No. of reserved product accounts 4 Transparency - identical for identical services throughout the territory of the Republic of Slo- venia; Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes (2) The application of a uniform tariff referred to in the last indent of the pre- No. of unreserved product accounts 19 Last review of USP accounts 2007 ceding paragraph shall not exclude the right of universal service providers to Body reviewing USP accounts (Type of body) Independent conclude individual contracts on prices with users. Application of tariff principles Auditor Note: *) Article 12 of Directive 2008/6/EC Bulk services within USO? Yes NRA issues statement of compliance? Yes Source: NRA, Ministry Does USP conclude individual agreements? Yes Last publish statement of compliance 2007 Individual agreement: cost based price re- No Publish cost allocation system? No quired Individual agreement: NRA has cost data? No USP financial accounts audited? Yes USP has special tariffs? Yes Last published financial accounts 2009 Up- and downstream accounts? N/A Source: NRA

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24.4. ROLE OF NRA Indicator 24.4.4 Complaint handling – appeal from NRA decisions Question Answer Question Answer Indicator 24.4.1: NRA powers Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Task or power Yes/No Task or power Yes/No To whom is NRA decision appealed? Court Number of NRA decisions reversed? 1 Source: NRA Require USP cost allocation system? Yes Levy fines? Yes Approve USP cost allocation system? Yes Fines levied since 1.1.2006 regarding data re- No quirements? Review cost allocation to non-USO? No * Seek court order? No Indicator 24.4.5 Enforcement of competition rules by NRA and cooperation with Require data from USP (Art.22**)? Yes Cancel unlawful rates? No NCA Require data from non-USPs (Art.22**) Yes Set new rates for USP? No Question Yes/No Question Yes/No Require data studies? Yes Court orders sought since 1.1.2006 regarding No Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes data? Note: ‘NCA’ national competition authority. Require downstream access? Yes Source: NRA Note: - means no information

*) Just unaddressed mail items Indicator 24.4.6 Regulation of user protection procedures and remedies **) Under Article 22 of Directive 2008/6/EC Question Answer Question Answer Source: NRA User protection procedures in postal Both USP(s) required to issue annual report Yes – separate decision of NRA or consumer law? Indicator 24.4.2: NRA human and financial resources Enforcement by NRA or national con- Both NRA issues annual report Yes sumer protection authority? Question Answer Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Size of budget? (€ thousands) 5.430 (Postal Division – 510) Applies to non-USO services Yes Agency reviewing operator NRA Number of total staff ? 75 Remedies by competent national au- Yes (100,000 – (Of which, staff dealing with postal affairs) 4 thority? (maximum fine) 400,000 euros) Source of NRA budget Fees collected from the : Source: NRA • USP, from postal operators • Telecommunication operators • Numbering Indicator 24.4.7 Main issues of discussion between NRA and USP • Frequencies Issue (Short description in bullet points) Who approves NRA budget Government Source: NRA • Liberalization • USO prices • Quality of service • Access to postal network/infrastructure Indicator 24.4.3: NRA independence Source: NRA, USP Question Yes/No Question Answer

Does the government have a formal No Who, and under what condi- Government (conditions in right to guide NRA on policies? tions, can appoint NRA head? the call for director) Some NRA decisions require gov- No Who, and under what condi- Government (for failure to ernmental support? tions, can dismiss NRA head? comply with legislation) Can government suspend NRA or- No Minimum qualifications for Yes ders? NRA heads Source: NRA

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Indicator 24.4.8: NRA relations with customer associations 24.5. MARKET STRUCTURE AND COMPETITION Indicator 24.5.3 Mail market segmentation Percentage opened to com- Subject to li- Indicator 24.5.1:Information about the incumbent petition cense / au- No. of significantcom- Names of signifi- Segment Question Answer Question Answer Under thorisation? petitors cant competitors Name of incumbent Pošta Slovenije, d.o.o. Main activities Postal services, Financial services, national Actual (Yes/No) Sales of merchandise law Legal status Limited liability company Employment 6,705 empl. (31.12.2009) Addressed items State ownership (percent) 100 % Source of financing Equity Letters 100 5 Yes None Source: USP Correspondence reserved Yes area, 50g Direct mail 100 None Yes None Indicator 24.5.2 Incumbent profits, 2009, national currency Publications 100 None Yes None Statistic Value Unaddressed items 100 None No None Total profit in 2009 14.171.041 EUR Cross-border out- 100 bound Percentage of profit coming from letter mail 0 % Express 100 Intense Yes 3 Percentage of profit coming from reserved area (if present) 0 % Parcels 100 Intense Yes 3 Source: USP Total Source: NRA

Indicator 24.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Segment Approximate sum of market shares of 3 main competitors

Letter post (open area) Below 5% Parcels Below 25 % (domestic market); Above 95% (international market) Express Below 10 % (domestic market); Above 70% (international market) Unaddressed items No Source: USP Indicator 24.5.5:

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Indicator 24.5.6 New entrants since 2008 24.6. STRUCTURE OF MARKET DEMAND Segment No. of End-to-end or up/downstream com- Name Approximate mar- entrants ket share petition? Mail 3 No significant market Yes (1) Indicator 24.6.1 Revenues and volumes generated by consumers vs. business share. customers in 2009, national currency, millions of items Express - Segment Business customers Private consumers Approximate mar- Logistics - Revenue Volume Revenue Volume ket share in the to- Financial - tal market Others - Addressed items (domestic) 95 Note: - means no answers in questionnaire Letters 90 Source: NRA Correspondence Reserved area 100 Indicator 24.5.7 Cross border mail Direct mail 90 Publications 19 Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Unaddressed items 90 Cross-border mail outbound 8 million items per year Inbound only - No Express 46 Note: - means no answers in questionnaire Parcels 49 Source: NRA Total Note: - means no answers in questionnaire Indicator 24.5.8 Presence and role of mail consolidators in the market Source: USP Question Answer Indicator 24.6.2: Revenues and volumes generated by consumers vs. business customers in 2008, national currency, millions of items Are companies offering mail consolidation services present in the market? Yes Indicator 24.6.3 Trends in mail substitution How large is the turnover of mail consolidators in relation to the postal market? No data Short description (in bullet points) Have you handled any competition cases involving mail consolidator? No • “It does not appear that emerging electronic alternatives have substantially affected the development in let- Source: NRA ter post: Correspondence has increased, too and has achieved a high level in terms of items per capita (even higher than in some Western Member States)” ITA/WIK (2009b) Source: USP

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Indicator 24.6.4 Effect of the financial crisis on revenues in 2009 24.8. SOCIAL AND CONSUMERS ASPECTS Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Less than 5% 5-15% more than 15% Indicator 24.8.1 Employment indicators, 2009 Addressed items (domestic) Decline USP Letters Decline Employment (thousand), in full time equivalents 6,548 Correspondence - Percentage of total country employment Reserved area Increase Share of civil servants - Direct mail Decline Share of part time and temporary employment 8.,3 % Publications Decline Number of outsourced and/or subcontracted workers in the delivery function in 474 (monthly average for 2009) Unaddressed items Decline Cross-border mail outbound Decline Note: - means no information Express Increase Source: USP, UNI Europa Parcels Decline Total Decline Indicator 24.8.2 Wage and productivity indicators Source: USP Incumbent Wages as a proportion of total costs 68,33 % 24.7. PRICE PERFORMANCE: Average wage per hour (€) 8,15 € Note: - means no information Source: USP Indicator 24.7.1 Public tariffs, 2004-2009 Segment 2005 2007 2009 Single item: 20g tariff letter 0,24 0,24 0,3 Single item: 100g priority mail 0,75 0,75 0,70 24.9. TECHNOLOGICAL DEVELOPMENTS Single item: 500g insured and registered 4,47 4,47 4,47 Single item: 1 kg parcel 3,71 3,71 3,71 Indicator 24.9.1 Innovation, technology and new services Bulk mail: composed of 20g letters - - - Service Do you offer? Volume (mil- Do you plan Remarks Bulk mail: composed of 100g letters - - - lion of items) to offer? Note: - means no answers in questionnaire Hybrid mail Yes 44.5 - Services are performed by Source: USP our daughter company Virtual delivery of mail No N/A - Pick up locations for parcels No Not applicable - (parcel shops)

Note: - means no answers in questionnaire Source: USP

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Indicator 24.9.2 Statistics on technological progress Indicator 24.9.5 Developments within networks and mail consolidation services Indicator Value in 2009 Increase/decline since 2007 Question Answer Percentage of letter mail benefiting from automated 85 % - Have you carried out a major reorganisation of your lo- No, not yet. We are planning to establish six parcel tran- processing (e.g. sorting) gistics network? For example, decentralising, imple- shipment post offices and parcel delivery post offices Percentage of parcels benefiting from automated proc- 90 % - menting hub & spoke systems? (additional level in the parcel logistics organisation). essing (e.g. sorting) Do you use different networks for letters and parcels at Not yet. Note: - means no answers in questionnaire collection, sorting, transportation or delivery levels? What are the reasons? Source: USP What is the relative importance of road, rail and air as In domestic we use mainly road transport whereas in in- modes of transportation for mail? Have these shares ternational we use road transport for some destinations changed recently? Why? otherwise we use air transport. Indicator 24.9.3 Supply of e-commerce services, total market Do you offer mail consolidation services? What type Question Answer - Incumbent and to whom? Do you supply own e-commerce services? What kind? Yes. Digital certificates, timestamps, digital archiv- Source: USP ing and digital storage center. What share of turnover do you generate from own e- The share is 0,6 %. The trend is slowly growing. Indicator 24.9.6 The most important environmental initiatives implemented commerce services? What is the trend? What own e-commerce services do you plan to develop? Internet shop. Brief answer (in bullet points) Are you able to indicate how the percentage of your turnover We do not have such relationships. • Continued introduction of ecological liquid gas powered vehicles and electric and hybrid vehicles that originates from or is related to third-party e-commerce • Plan to buy 30 electric bicycles and 2 electric vehicles in 2010 transactions (e.g. purchases on the internet) • Owns57 liquid gas powered vehicles Source: USP • Implemented separated waste collection • Introducing an environmentally friendly policy Indicator 24.9.4 Supply of hybrid mail services, total market Source: USP Question Answer - Incumbent Do you supply hybrid mail or virtual Only hybrid mail solutions which are performed by our daughter company. 24.10. QUALITY OF SERVICE DEVELOPMENTS delivery solutions? What kind? Example of services performed: printing of variable data (with or without pre-printed forms), mail production, enveloping, document archiving etc.

If yes, how many years have you been For over 10 years. Our daughter company was established in 1998. supplying these services for? Indicator 24.10.1 Transit time for domestic priority mail, 2009 What share of turnover do you gener- 1,5 % in comparison with turnover of Post of Slovenia. Hybrid mail services D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 ate from hybrid mail and/or virtual have been constant for the last 3 years. dard (% actual dard (% actual dard (% actual dard (% actual delivery solutions? What is the trend? FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Do you plan to develop (new) hybrid Yes (e.g. web solution for hybrid mail). There are also plans to develop vir- mail / virtual delivery solutions? tual delivery solutions in the next years. 95 93.9 99.5 99.5 - - - - Source: USP Note: - means no answers in questionnaire Source: NRA

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Indicator 24.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 - - - Note: - means no information Source: Ecorys (2008a)

Indicator 24.10.3 Quality of service indicators Indicator Value Percentage of lost mail 0.0037% Number of postal outlets (post offices and agencies) and number of letter 557 post offices USP boxes per 10.000 inhabitants. 3.000 letter boxes USP The implementation of CEN standards. Yes Source: NRA

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25.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 25.1.1 Country facts Country facts Value Unit Year Population 46.0 Million 2010 Population growth 14.8 Percent 2000-2010

Population density 91 Pop. / km2 2010 Urbanisation rate 77.1 Percent 2008 GDP 1,127 PPS, billion 2009 GDP/capita 24,500 PPS 2009 Postal services to GDP ’99/09: 0.54%/0.60% Ratio 1998/2008

NRA Ministerio de Fomento / Subdirection General For Regulation Of Postal Services NRA responsibilities? - Incumbent Correos y Telégrafos Main activities of incumbent Postal Services Employment, incumbent 65.924 Source of financing Sales Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP Chapter 25 SPAIN Indicator 25.1.2 Volume of items delivered by segment in total market, millions

of items Source: NRA Box 25.1 – Country summary Spain has a draft version of the postal law with provisions to transpose Directive 2008/6/EC Indicator 25.1.3 Revenues from segments in total market, millions of Euro ready. The country is obliged to transpose it before the deadline 1.1.2011. Source: NRA Until July 2010, the functions/competences granted to the NRA (Comisión Nacional del Sector Postal. CNSP) by Law 23/2007 have been performed on an interim basis by the Ministry of Transport and Public Works (Fomento). The CNSP became operational in July 2010. Correspondence is not fully open due to the presence of reserved area. The other areas are open to competition. The competition in correspondence is low; the Spanish NPO had 88% of the volume in 2006. The competition in cross-border outbound mail is very high. Cost of USO estimated to 12 percent of €2.2 billion turnover. Method designed by National Economic Research Associates, approved by NRA. Legal barriers to market entry in Spain include the reserved area, USO regulation (incl. the organisation of compensation fund in the draft law) and employment regulations. Another is the regulation of the legal access to the postal infrastructure. The NPO in Spain is VAT exempted on all products related to the USO.

240

SPAIN

25.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 25.2.2 Regulation of services based on new technologies Indicator 25.2.1 National regulatory framework Question Answer Are you aware of the presence of services based on new technologies in your market? For ex- - Year of ample, hybrid mail or virtual delivery networks? Yes enact- Do you have plans to regulate such products? For example, confidentiality of hybrid mail? - Question /no Name of law ment Remarks Note: - means no answers in questionnaire Is postal law Yes Law 24/1998, 13th July, on the 1998 Partially amended by: Law 50/1998. 30th De- enacted? Universal Postal Service and cember, Law 14/2000, 29th December, Law Source: NRA on the Liberalisation of the 24/2001, 27th December, Law 53/2002, 30th De- th Postal Services cember, Law 23/2007, 8 October, Law 25/2009, 23th december Indicator 25.2.3 VAT treatment of postal services Is Directive No 2010 – Postal product Part of USO? VAT rate Legal basis 2008/6 Second transposed? half Intercity letters and Yes. Reserved Exempted Law 23/2005 amending Law 37/1992 on VAT postcards up to 50gr Is there a law that defines… Any other products Non reserved UPS/non USO 16% Law 23/2005 amending Law 37/1992 on VAT Scope of Yes Law 24/1998, Royal Decree 1998 USO? 1829/1999, regulating the 1999 Source: NRA provision of postal services implementing the Postal Act 24/1998. Indicator 25.2.4 Services ensured as universal services under national law Quality of Yes Royal Decree 1829/1999, 1999 Segment Defined as universal service by law? Are quality standards specified by law? USO? Basic letter post Yes Yes USO rates? Yes Law 24/1998 2001 Amended by Law 53/2002 Bulk letters NRA: Yes NRA: Yes USP ac- Yes Law 24/1998, Ordinance FOM 2004 USP: No USP: - counts? 2447/2004 on analytical ac- Direct mail NRA: No - counts and separate accounts USP: Yes for the postal operators Periodicals NRA: No NRA: No Reserved Yes Law 24/1998 Amended by Law 53/2002 USP: Yes USP: - area? Non-priority letter s* NRA: No - th Authorisa- Yes Law 24/1998 1998 Amended by: Law 24/2001, 27 December, Law USP: - tion proce- 53/2002, 30th December, Law 23/2007, 8th Oc- Basic parcel post Yes Yes dures? tober, Law 25/2009, 23th december Bulk parcels No NRA: Yes Universal Yes Law 24/1998, Royal Decree 1998-1999 USP: - service fund? 1338/1999, 31th July on postal taxes and the Compensation Note: - means no answers in questionnaire Fund USP: Universal Service, as defined by Postal Law, User protec- Yes Law 24/1998 1998 tion? *) USP: Theredards foris no this reference product to as th well. Other special Yes Law 24/1998 Establish Postal Boxes for reserved ser- rights vices, Exemption from taxes levied on Source: NRA, USP (which)? reserved services, Customs Preference (UPS.), Right to setup mailboxes on the Indicator 25.2.5 Mechanisms to ensure provision of universal service public road, Distribution of stamps, The also includes money order, and sets quality stan- exclusive use of terms, "Post", "Spain" or Question is product in the Spanish Postal Law.Answer any other identifying the postal operator Describe the role played by the three mechanisms: market forces, designation and Designation providing the UPS public procurement. Are other safeguarding measures present? Source: NRA Source: NRA, Ministry

241

SPAIN

Indicator 25.2.6 Legal mechanisms to ensure quality of universal service Indicator 25.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Services within universal services If yes, state services e.g. letter post Annual measurement of quality of service? Yes NRA can impose other remedies? No items, otherwise insert “No” Annual publication of results on quality of service Yes What licensing procedure is used? - monitoring? (designation, general authorisation, individual license) Source: NRA Which universal services are subject to individual license? Basic letter post, Bulk letters, Basic parcel post Which universal services are subject to general authorisation? None Indicator 25.2.7 Financing the net cost of universal service Are authorisation requirements published (transparent)? Yes Is the USP authorised under Art. 9*? - Mechanism Yes/No Mechanism Yes/No Services outside universal services Answer Reserved area Yes* Who contributes to the compensation fund? (Incumbent, competitors, other entities) For which services is general authorisation required? - For which services is an individual license required (ex ante ap- - Compensation fund Yes Public procurement No proval)? Size of compensation fund Direct compensation from public funds Yes Note: - means no answers in questionnaire (if present, in Euro) Note: Direct compensation from public funds includes Source:*) NRA Article 9 of Directive2008/6/EC

Source:pear NRA on January 1, 2011. Indicator 25.2.10 Access to postal infrastructure ensured by Member States Indicator 25.2.8 Cost of universal service obligation and method for its calcula- Access to: Yes/No Other conditions: Yes/No subsidies and state aid. *Reserved area will disap- Post codes No Change of address database No tion Address database No USP return services No Question Answer Post office boxes No Street letter boxes No What is the cost estimate of NRA: 242 million Euros Delivery boxes Yes Sorting centres No USO? (if available, in Euro) USP: N/A Other conditions: Yes/No What is the name of calculation Method designed by National Economic Research Associates (NERA) method? (if available) Require downstream access to USP No Short description of calculation USP: See Order FOM/2447/2004, of July 12th about Analytical Ac-counting and Source: NRA method (if available) account separation of postal operators Is a thorough documentation of NRA: The european comission report :“costing and financing of universal ser- calculation method available? vice obligations in the postal sector in the european union, 1998” Indicator 25.2.11 Involvement in competition cases since 2007 Where? USP: See above. Besides, more detailed information is available for the mem- Case name Case status Postal product(s) con- Issue bers of the Postal Advisory Counsel cerned Is calculation method approved Yes by the NRA? No cases Does NRA calculate USO cost? NRA: Yes Source: USP Note: USP: Order FOM/2447/2004, of July 12th about

postal operators. Source: NRA, USP

Analytical Accounting an

d account separation of 242

SPAIN

25.3. REGULATION OF PRICES AND ACCOUNTING Indicator 25.3.3 Cost accounting system of the USP Question Answer Indicator 25.3.1 Method of price regulation What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC Segment Method Remark Is the cost accounting system approved by the National Regulatory Authority? Yes Basic letter post Ex ante For items in reserved or licensed area, otherwise price cap Assessment of the system (pros and cons) Bulk letters Ex ante For items in reserved or licensed area, otherwise price cap - Direct mail Note: FAC = fully allocated cost accounting Periodicals Source: NRA Non-priority letter post Basic parcel post Price cap For all items in this service category Indicator 25.3.4 Promoting access to and affordability of postal services Bulk parcels Price cap For all items in this service category Question Yes/No If yes, how? Source: NRA Non-discriminatory prices Yes Published for public knowledge. (Art. 12*) required? Special tariffs shall respect the principles of transparency and non discrimination Indicator 25.3.2 Accounting requirements Affordability (Art. 12*) de- NRA: No USP: Use of different parameters: Question Answer Question Answer fined in national law? - Analyze the evolution of prices over time and link it the CPI increase. - Compare prices with those of other countries No. of up/down stream accounts - Separation of accounts - Set up prices in relation to other macroeconomic variables (GDP, average Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - wage) and set up ratios - Set up comparisons with EU MS for the same ratios or parameters. No. of reserved product accounts 13 Transparency Note: - *) Article 12 of Directive 2008/6/EC Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Source: NRA, Ministry No. of unreserved product accounts 15 Last review of USP accounts 2007

Application of tariff principles Body reviewing USP accounts (Type of Firm em- body, e.g. NRA, USP) ployed by OLE OF To bulk services within USO? Yes NRA 25.4. R NRA Does USP conclude individual agreements? Yes NRA issues statement of compliance? No Individual agreement: cost-based price required? None Last publish statement of compliance N/A Indicator 25.4.1: NRA powers Individual agreement: NRA has cost data? No Publish cost allocation system? No Power Yes/No Power Yes/No USP has special tariffs? Yes USP financial accts audited? Yes Require USP cost allocation system? Yes Levy fines? Yes To up- and downstream accounts? No Last published financial accounts 2008 Yes Fines levied since 1.1.2006 regard- Approve USP cost allocation system? No Note: - means no answers in questionnaire ing data requirements? Source: NRA Review cost allocation to non-USO? Yes Seek court order? Yes Require data from USP (Art.22*)? Yes Cancel unlawful rates? No Require data from non-USPs (Art.22*) Yes Set new rates for USP? Yes Require data studies? Yes Court orders sought since 1.1.2006 - regarding data? Require downstream access? - Note: - means no answers in questionnaire

Source:*) NRA Article 22 of Directive 2008/6/EC

243

SPAIN

Indicator 25.4.2: NRA human and financial resources* Indicator 25.4.5 Enforcement of competition rules by NRA and cooperation with Question Answer NCA Question Yes/No Question Yes/No Size of budget? (€ thousands) ** Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? - Number of total staff? 39 Note: - means no answers in questionnaire (Of which, staff dealing with postal affairs) ** Source of NRA budget General budget of the State or government ‘NCA’ national competition authority. Institution approving NRA budget Parliament Source: NRA

Note: * This is based on the Law 24/1998 ** no answer provided by NRA as the new NRA body has only been formally active since July 2010 Indicator 25.4.6 Regulation of user protection procedures and remedies Source: Answer from Ministry Question Answer Question Answer User protection procedures in postal or con- Both USP(s) required to issue annual report - sumer law?

Indicator 25.4.3: NRA independence Enforcement by NRA or national consumer NRA NRA issues annual report - Question Yes/No Question Answer protection authority? Can government guide NRA on policy? Yes* Who, and under what conditions, can ap- - Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes point NRA head? Applies to non-USO services Yes Agency reviewing operator Several Some NRA decisions require governmen- Yes* Who, and under what conditions, can - Remedies by competent national authority? - government tal support? dismiss NRA head? (maximum fine) agencies Can government suspend NRA orders? - Minimum qualifications for NRA heads No Note: - means no answers in questionnaire Note: - means no answers in questionnaire Source: NRA *The President, Vice-President and Counselors will adopted on the proposal of the Minister of Tran Indicator 25.4.7 Main issues of discussion between NRA and USP nized expertise in the postal sector and in the re Issue Short description (in bullet points) nominees before the appropriate Commission of The President,capacity Viceand expertise. President and Counselors beshall appointed le by the Government, by Royal Decree Note: - means no answers in questionnaire Source: NRA, USP sport and Public Works, among persons of recog- ment, end of the term, or separation decided by gulation of markets, following a hearing of the

istry of Development, in cases of permanent incapacity for the exercise of the job, serious breach of Indicator 25.4.8: NRA relations with customer associations the Congress (Parliament) which will focus on Source:its NRA obligations, conviction for wi ave office by resignation accepted by the Govern- Indicator 25.4.4 Complaint handling – appeal from NRA decisions 25.5. MARKET STRUCTURE AND COMPETITION the Government, after instruction file by the Min- Question Answerllful Questionor incompatibility arising Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Indicator 25.5.1:Information about the incumbent To whom is NRA decision appealed? Court Number of NRA decisions reversed? - Question Answer Question Answer Source: NRA Name of incumbent Correos y Telégrafos Main activities Postal Services Legal status Sociedad Anónima Estatal* Employment 65.924 State ownership (percent) 100% Source of financing Sales Note: * Sociedad Anónima Estatal ~ Public Limited Company Source: USP

244

SPAIN

Indicator 25.5.2 Incumbent profits, 2009, national currency 25.6. STRUCTURE OF MARKET DEMAND Statistic Value Total profit in 2009 (EBIT) -0,4 No answeres were provided Percentage of profit coming from letter mail - Percentage of profit coming from reserved area (if present) - Note: - means no answers in questionnaire 25.7. PRICE PERFORMANCE: Source: USP ndicator 25.7.1 Standard public tariffs, 2005-2009, national currency Indicator 25.5.3 Mail market segmentation Segment 2005 2007 2009 Percentage opened to Subject to li- Single item: 20g tariff letter (1) 0.35 0.39 0.39 No. of sig- competition cense / au- Names of significant Single item: 100g (2) 0.55 0.70 0.75 Segment nificant- Under na- thorisation? competitors Single item: 500g insured and registered (3) 6.75 7.70 7.57 Actual competitors tional law (Yes/No) Single item: 1 kg parcel (4) 4.30 5.60 5.70 Addressed items 100% Bulk mail: composed of 20g letters (5) -** - - Letters 85% Bulk mail: composed of 100g letters (5) -** - - Correspondence 40% Yes Note: - means no information. Direct mail 100% (1) non standardized Publications 100% (2) Single item from 50 to 100gr Unaddressed items 100% (3) Insurance (domestic) is a Value Added feature: 1.67 1.77 1.77 Cross-border outbound 100% (3) Registered (domestic): 1.93 2.13 2.15 Express 100% Yes (3) from 350 to 1000 gr: 3.15 3.80 Parcels 100% Yes (3) from 350 to 500 gr: 3.65 Total (4) “paquete azul” Source: NRA (5) Not published in the pu

Indicator 25.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Indicator 25.5.5 Mergers and acquisitions of incumbent since 2007 25.8. SOCIAL AND CONSUMERSblic ASPECTS tariffs. Comercial price Name of acquired Main activities of the acquired Main objectives behind the ac- Date company company quisition No cases Indicator 25.8.1 Employment indicators, 2009 Source: USP USP Indicator 25.5.6: Employment (thousand), in full time equivalents 65.924 Percentage of total country employment Indicator 25.5.7 Cross border mail Share of civil servants 45% Main actors (if not re- Terminal dues regu- Share of part time and temporary employment 22% Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Share of outsourced and subcontracted employment None 97 million items per year Some of them No Note: No data for 2009. Answers for 2008 Source: NRA Source: USP

Indicator 25.5.8: Presence and role of mail consolidators in the market

can be found in the Annual Report 245

SPAIN

Indicator 25.8.2 Wage and productivity indicators Indicator 25.9.4 Supply of hybrid mail services, total market Incumbent Question Answer - Incumbent Wages as a proportion of total costs - Do you supply hybrid mail or virtual delivery solutions? What kind? Yes Average wage per hour (€) N/A If yes, how many years have you been supplying these services for? 8 Productivity measured by output per person employed What share of turnover do you generate from hybrid mail and/or virtual deliv- - Note: - means no answers in questionnaire ery solutions? What is the trend? Source: USP Do you plan to develop (new) hybrid mail / virtual delivery solutions? yes Note: - means no answers in questionnaire Source: USP 25.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 25.9.1 Innovation, technology and new services Indicator 25.9.5 Developments within networks and mail consolidation services Service Do you Volume Do you plan to Remarks Question Answer offer? (million of items) offer? Have you carried out a major reorganisation of - Automation Plan Hybrid mail Yes 407,3 - your logistics network? For example, decentralis- - Concentration of rural delivery networks. Virtual delivery of mail Yes - - APE has just started ing, implementing hub & spoke systems? - Rationalization of Customs procedures Pick up locations for No Not applicable - Do you use different networks for letters and par- No. Synergies between products. parcels (parcel shops) cels at collection, sorting, transportation or delivery levels? What are the reasons? Note: - means no answers in questionnaire What is the relative importance of road, rail and Road: 92,3% Source: USP air as modes of transportation for mail? Have Air transportation: 7,8% these shares changed recently? Why? Rail transportation: 0% No changes Indicator 25.9.2 Statistics on technological progress Source: USP Indicator 25.9.6: Please describe briefly the most important environmental initiatives implemented at your firm Source: USP Indicator Value in Increase/decline 2009 since 2007 Percentage of letter mail benefiting from automated processing (e.g. sorting) 88% 4 points 25.10. QUALITY OF SERVICE DEVELOPMENTS Percentage of parcels benefiting from automated processing (e.g. sorting) - - Note: - means no answers in questionnaire Indicator 25.10.1 Transit time for domestic priority mail, 2009 Source: USP D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual Indicator 25.9.3 Supply of e-commerce services, total market FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Question Answer - Incumbent * * - - 93% 92.50% - - Do you supply own e-commerce services? What kind? No Note: - means no answers in questionnaire. *) Sp Source: USP Source: NRA

ain does not have a clear D+1 standard defined

246

SPAIN

Indicator 25.10.2 Transit time for cross-border priority mail, 2007 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) - - - - 85 87.7 - - Note: - means no information Source: Ecorys (2008a)

Indicator 25.10.3 Quality of service indicators Indicator Value Percentage of lost mail - Number of postal outlets (post offices and agencies) and - number of letter boxes per 10.000 inhabitants. The implementation of CEN standards. Yes Note: - means no answers in questionnaire Source: NRA

247

SWEDEN

26.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 26.1.1 Country facts Country facts Value Unit Year Population 9.3 Million 2010 Population growth 5.4 Percent 2000-2010 Population density 21 Pop. / km2 2010 Urbanisation rate 84.5 Percent 2008 GDP 265 PPS, billion 2009 GDP/capita 28,400 PPS 2009 Postal services to GDP ’99/09: 1.35%/1.39% Ratio 1998/2008

NRA Post- och Telestyrelsen NRA responsibilities? Authorisation, US rates, Uniform tariff rules, Special tariffs, USP accounts, Quality of US, User complaints Incumbent Posten AB (Part of Posten Norden AB) Main activities of incumbent Public Limited Company Employment, incumbent 27,000 FTE Source of financing Only revenues Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP Chapter 26 SWEDEN Indicator 26.1.2 Volume of items delivered by segment in total market, millions Box 26.1 – Country summary of items The volume of addressed mail items fell by approx. 7.5 percent from 2007 to 2009. Segment 2005 2007 2009 Sweden transposed Directive 2008/6/EC on September 1, 2010. Addressed items 3,214.3 3,154.6 2,914.8 In 2009, Post Danmark and Posten AB merged forming Posten Norden AB. The Danish state Letters N/A N/A N/A maintains a 40 percent stake in the new entity, while the rest is held by the Swedish govern- Correspondence N/A N/A N/A ment. Direct mail N/A N/A N/A The postal markets are fully liberalised legally. Publications N/A N/A N/A In 2008 the Swedish NPO had a market share of 89% of the domestic letters, while in unad- Unaddressed items N/A N/A N/A dressed advertising they had 64%. Cross-border outbound N/A N/A N/A So far, there is no compensation for net USO costs. Public procurement will be used, if USO Express N/A N/A N/A pose a net cost in the future. Parcels N/A N/A N/A Since 2007 Sweden has had two competition cases connected to the postal sector. Total N/A N/A N/A The Swedish NPO is subject to full VAT on all its activities (no exemptions). Source: NRA Answers from the NRA , USP and Ministry refers to the situation before 1 September 2010, unless indicated otherwise. The changes introduced in the 2010 postal law include editorial changes on the scope of USO (bulk letters still not metioned explicitly) and the possibility for Indicator 26.1.3 financing of USO through public procurement in case it represents an unfair burden.

248

SWEDEN

26.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 26.2.3 VAT treatment of postal services Postal product Part of USO? VAT rate Legal basis All postal products Yes (including bulk mail) Postal 25 percent Chapter 7 paragraph 1 in Indicator 26.2.1 National regulatory framework services up to 20 kg the Swedish VAT Act Question Yes/N Year of en- Remarks Source: Ministry, NRA o actment Is postal law enacted? Yes 1994/2010 Indicator 26.2.4 Services ensured as universal services under national law Is Directive 2008/6 trans- Yes 2010 A new Postal act came into force 1 September 2010, and posed? hereby the Third Postal Directive is entirely transposed . Segment Defined as universal service by law? Are quality standards specified by law? Is there a law that defines… Basic letter post Yes Yes Scope of USO? Yes 1994 / 2010 Editoral changes have been made in the new Postal act (1 Bulk letters Yes* No sep 2010) but the scope is unchanged. Direct mail No - Quality of USO? Yes 1994 / 2010 Editoral changes have been made in the new Postal act (1 Periodicals No - sep 2010) but the quality is unchanged. Non-priority letter s Yes No USO rates? Yes 1994 / 2010 Basic parcel post Yes Yes USP accounts? Yes 2001 Bulk parcels No No Reserved area? No Note: - means no answers in questionnaire Authorisation procedures? Yes 1997 Universal service fund? No Accrding to the 2010 postl law, public procurement will be used if the universal services represents an unfair *) The USP has accepted, but as of does not agr burden to the designated provider cluded within the USO under the legal regime prio User protection? Yes 2001 Source:scope NRA, of USP USO in the current legal regime has b Source: NRA, USP Indicator 26.2.5 Mechanisms to ensure provision of universal service ee with, the NRA’s view that Bulk Letters is in- Indicator 26.2.2 Regulation of services based on new technologies Question Answer r to Sepember 1, 2010.The description of the Question Answer (in bullet points) Describe the role Ministry: According to the proposal on a neween postal subject act to the small provision editorial of USO changes should only. at first be Are you aware of the presence of services based on new technologies in Yes, hybrid mail services has been on played by the provided by market forces. Otherwise the NRA may designate one or several undertakings to your market? For example, hybrid mail or virtual delivery networks? the market since the late 1990’s three mecha- provide whole or a part of the USO. If the USO represent an unfair financial burden for the des- nisms: market ignated operator the universal service may be ensured by public procurement. Do you have plans to regulate such products? For example, confidential- No ity of hybrid mail? forces, designation and public NRA: To a significant extent the provision of US rely on market forces. Safeguarding universal Source: NRA procurement. Are service through designation is however still considered necessary as competition has not de- other safeguard- veloped to such an extent that it safeguards all requirements according to the Directive, espe- ing measures pre- cially not those indicated in Article 12. No other mechanisms for safeguarding universal ser- sent? vices are included in the Postal Services Act still in force. According to the proposal on a new Postal Services Act the provision of US should at first be provided by market forces. If needed the NRA may designate one or several undertakings to provide whole or a part of the US. If the USO represents an unfair financial burden for the designated operator the universal service may be ensured by public procurement. Note: The new Postal act came into force 1 September

Source:procurement Ministry, NRA if it represents an

unfair financial burden for 2010. Universal services ma

the designated operator. 249 y be ensured by public

SWEDEN

Indicator 26.2.6 Legal mechanisms to ensure quality of universal service Indicator 26.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Services within universal services If yes, state services e.g. letter post Annual measurement of quality of service? Yes NRA can impose other remedies? Yes items, otherwise insert “No” Annual publication of results on quality of service Yes What licensing procedure is used? Individual license monitoring? Which universal services are subject to individual license? Addressed items less than 2 kg Source: NRA Which universal services are subject to general authorisation? None Are authorisation requirements published (transparent)? Yes Indicator 26.2.7 Financing the net cost of universal service Is the USP authorised under Art. 9*? Yes Mechanism Yes/No Mechanism Yes/No Services outside universal services Answer Reserved area No Who contributes to the compensation fund? No For which services is general authorisation required? No licensing or authorization what so ever (Incumbent, competitors, other entities) Are any non-universal services subject to individual licensing? No Compensation fund No Public procurement Possible if Source: NRA needed Size of compensation fund No Direct compensation from public funds* No (if present, in Euro) Indicator 26.2.10 Access to postal infrastructure ensured by Member States Note: *According to the new postal act public procuremen Access to: Yes/No Other conditions: Yes/No Post codes Yes Change of address database Yes an unfair burden to the designated provider. Source: NRA Address database Yes USP return services No Post office boxes Yes Street letter boxes No Indicator 26.2.8 Cost of universal service obligation and method for its calcula- Delivery boxes Yes Sorting centres No Other conditions: Yes/No tion t will be used if the universal services represents Require downstream access to USP No Question Answer Source: NRA What is the cost estimate of As no compensation mechanisms (including reserved areas) have been imple- USO? (if available, in Euro) mented in Sweden - there is not even a legal basis for compensation - no calculation of the net cost has been made. Indicator 26.2.11 Involvement in competition cases since 2007 Source: NRA, USP Case name Case status Postal product(s) Issue concerned Competition Authority Closed 2007-10-31 Bulk mail Abuse of dominant posti- 702/2006 City mail Swe- tion,predatorty pricing den AB and rebates

Competition Authority Closed 2009-12-22, but contested Bulk mail Abuse of dominant posi- 381/2010 Bring Citymail and now being tried against the tion rebates AB subsidiary Post Meddelande AB Note: The USP do not want to answer to this question Source: USP

250

SWEDEN

26.3. REGULATION OF PRICES AND ACCOUNTING Indicator 26.3.3 Cost accounting system of the USP Question Answer The provisions of the new Postal Law has not been included in this section. What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (Fully allocated costs) Is the cost accounting system approved by the National Regulatory Authority? -

Assessment of the system (pros and cons) Indicator 26.3.1 Method of price regulation - Detailed information available on individual products Segment Method Remark - No transparent separation of fixed and variable cost which makes LRIC calculations hard to produce Source: NRA, USP Basic letter post Price cap Only for items weighing up to 500 grams

Bulk letters Ex post For all items in this service category Direct mail Ex post For all items in this service category Indicator 26.3.4 Promoting access to and affordability of postal services- Minsi- Periodicals Ex post For all items in this service category try Non-priority letter post Ex post For all items in this service category Question Yes/No If yes, how? Basic parcel post Ex post For all items in this service category Non-discriminatory Yes At present Art 12 is transposed through the Swedish Competition Act, Bulk parcels Ex post For all items in this service category prices (Art. 12) re- the EU Competition Law and the Postal Services Act. Required explic- quired? itly in the 2010 Postal Act. Source: NRA Affordability (Art. 12) Yes Required in the 2010 postal act. No specific definition defined in national law? Indicator 26.3.2 Accounting requirements Source: Ministry, NRA Question Answer Question Answer

Separation of accounts No. of up/down stream accounts - Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - 26.4. ROLE OF NRA No. of reserved product accounts N/A Transparency Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Indicator 26.4.1: NRA powers No. of unreserved product accounts N/A Last review of USP accounts 2008 Task or power Yes/No Task or power Yes/No Application of tariff principles Body reviewing USP accounts (Type of body, NRA Require USP cost allocation system? Yes Levy fines? Yes e.g. NRA, USP) To bulk services within USO? Yes Approve USP cost allocation system? Yes Fines since 1.1.2006 regarding data requirements? No Does USP conclude individual agreements? Yes NRA issues statement of compliance? Yes Review cost allocation to non-USO? Yes Seek court order? No Individual agreement: cost-based price required? Yes Last publish statement of compliance 2008 Require data from USP (Art. 22*)? Yes Cancel unlawful rates? Yes Individual agreement: NRA has cost data? Yes Publish cost allocation system? No Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? Yes USP has special tariffs? Yes USP financial accts audited? Yes Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No To up- and downstream accounts? No Last published financial accounts 2008 Require downstream access? No Note: - means no answers in questionnaire Note: *) Under Article 22 of Directive 2008/6/EC Source: NRA Source: NRA

251

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Indicator 26.4.2: NRA human and financial resources Indicator 26.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 1400 User protection procedures in postal or con- Both USP(s) required to issue annual report Yes sumer law? Number of total staff? (Of which, 9 out of 245 deal with postal supervision (another 9 employees at the NRA staff dealing with postal affairs) are responsible for the handling of undeliverable letters) Enforcement by NRA or national consumer Both NRA issues annual report No Source of NRA budget General budget of the state or Government and fees collected from postal protection authority (NCPA)? operators generally Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Who approves NRA budget Ministry responsible for postal services Applies to non-USO services Yes Agency reviewing operator Ombudsman Source: NRA Remedies by competent national authority? - (maximum fee) Note: - means no answers in questionnaire Indicator 26.4.3: NRA independence Source: NRA Question Yes/No Question Answer Can government guide NRA on policy? Yes Who, and under what conditions can ap- Government point NRA head? Indicator 26.4.7 Main issues of discussion between NRA and USP Some NRA decisions require governmen- No Who and under what conditions can dis- Government Issue Short description (in bullet points) tal support? miss NRA head? Prices • Geared to cost Can government suspend NRA orders? - Minimum qualifications for NRA heads? No Cost Calculation • Transparency Note: - means no answers in questionnaire • Allocation of costs Source: NRA Access to postal services • Reasonable distances to service spots, wayside letterboxes etc based on the needs of the customers • Services provided, scope of US Indicator 26.4.4 Complaint handling – appeal from NRA decisions • Accessibility for disabled and elderly people Question Answer Question Answer Access to postal infrastructure Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes Delivery of mail • Fulfilment of the principles for delivery i.e where mail Is to be delivered to To whom is NRA decision appealed? Court Number of NRA decisions reversed? 0 households in rural areas but even in urban areas Source: NRA Note: The USP do not want to answer to this question Source: NRA

Indicator 26.4.5 Enforcement of competition rules by NRA and cooperation with Indicator 26.4.8: NRA relations with customer associations NCA Question Yes/No Question Yes/No Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No Note: ‘NCA’ national competition authority. Source: NRA

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26.5. MARKET STRUCTURE AND COMPETITION Indicator 26.5.3 Mail market segmentation Percentage opened to Subject to li- competition Indicator 26.5.1:Information about the incumbent cense / au- No. of sig- Under na- thorisation? nificant- Names of significant Actual Question Answer Question Answer Segment tional law (Yes/No) competitors competitors Name of incumbent Posten AB Main activities Postal Services Addressed items 100% *) Bring Citymail Legal status Public Limited Company Employment 27,000 FTE Letters 100% ? Bring Citymail State ownership 100% - 60% by the Swedish government Source of financing Only revenues Correspondence 100% ? Yes (percent) (Posten AB is owned by Posten Norden AB. Direct mail 100% ? Posten Norden AB is owned 60 % by the Publications 100% ? Bring Citymail Swedish government and 40 % by the Danish Unaddressed items 100% ? Svensk Direktreklam government) Cross-border out- 100% ? Swiss Post, Mailworld Source: USP bound Express 100% ? N/A

Parcels 100% ? DHL, Schenker Indicator 26.5.2 Incumbent profits, 2009, national currency Total 100% Statistic Value Note: *) Based on the information available it is Total profit in 2009 284 Million SEK (for Posten Norden AB – accumulated for both Denmark and Sweden) competition on the detailed level indicated in the table. Making an assessment of the “actual per- Percentage of profit coming from letter mail 296 % (Other segments ended up with a loss) Source:centage NRA opened to competition” is not possible whatsoever. Percentage of profit coming from reserved area (if present) N/A Source: USP not possible to make an assessment of the degree of Indicator 26.5.4 Sum of market shares of 3 main competitors (excl. incumbent)

Segment Approximate sum of market shares of 3 main competitors Letter post (open area) Sweden Post 88%, Bring Citymail 11%, Others < 1% Parcels N/A Express N/A Unaddressed items N/A Source: NRA

Indicator 26.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired com- Main activities of the ac- Main objectives behind Date pany quired company the acquisition June 24, 2009 Post Denmark (Merger) Postal Services Economies of scale, region- alisation and liberalisation Source: USP

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Indicator 26.5.6 New entrants since 2008 26.6. STRUCTURE OF MARKET DEMAND Segment No. of Approximate market End-to-end or up / down- Name entrants share stream competition? Mail 2 Market entries early 2010, 1 end-to-end, 1 upstream MTD, Mailworld Indicator 26.6.1 Revenues and volumes generated by consumers vs. business no estimates available yet office AB customers in 2009, national currency, millions of items Express N/A Both business and private consumers Approximate Logistics N/A mar-ket share in Financial N/A Segment Revenue Volume the to-tal market Others N/A Addressed items (domestic) - - - Source: NRA Letters - - - Correspondence 8,181,000 2.333 million items - Indicator 26.5.7 Cross border mail Reserved area - - - Main actors (if not re- Terminal dues regu- Direct mail 4,639,000 2.221 millions items - Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Publications - - - Unaddressed items - - - N/A No - No Cross-border mail outbound - - - Note: - means no answers in questionnaire Express - - - Source: NRA Parcels - - - Total - - - Indicator 26.5.8 Presence and role of mail consolidators in the market Note: - Means no answer in the questionnaire Question Answer Source: USP Are companies offering mail consolida- Yes tion services present in the market? How large is the turnover of mail consoli- Small but no exact figures available Indicator 26.6.2 Revenues and volumes generated by consumers vs. business dators in relation to the postal market? customers in 2008, national currency, millions of items Have you handled any competition cases No, not formally but there have been discussions some years ago and Segment Both Business customers and Private consumers involving mail consolidator? occasionally it still becomes an issue whether consolidators are to be treated equally to a single customer. Revenue Volume Source: NRA Addressed items (domestic) - - Letters - - Correspondence 9,126,000 2.482 million items Reserved area - - Direct mail 5,017,000 2.482 million items Publications - - Unaddressed items - - Cross-border mail outbound - - Express - - Parcels - - Total - - Note: - Means no answer in the questionnaire Source: USP Indicator 26.6.3

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Indicator 26.6.4 Trends in mail substitution Indicator 26.8.2 Wage and productivity indicators Short description (in bullet points) Incumbent • “Letter post development has been significantly affected by emerging electronic alternatives: the penetra- Wages as a proportion of total costs 42 % tion rates for internet and broadband access are considerable high” ITA/WIK (2009b) Average wage per hour (€) - • “In May 2006 Posten AB acquired the Nordic region’s leading information logistics company, Stralfors (hybrid mail, e-invoicing)” ITA/WIK (2009b) Note: - means no answer in questionnaire Source: USP Source: USP

Indicator 26.6.5: 26.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 26.9.1 Innovation, technology and new services 26.7. PRICE PERFORMANCE: Service Do you offer? (Yes/No) Volume (million of items) Hybrid mail Yes - Indicator 26.7.1 Public tariffs, 2004-2009 Virtual delivery of mail No - Segment 2005 2007 2009 Pick up locations for parcels (parcel shops) Yes N/A Single item: 20g tariff letter 5.50 5.50 6.00 Note: - means no answer in questionnaire Single item: 100g priority mail 11.00 11.00 12.00 Source: USP Single item: 500g insured and registered 78.00 83.00 86.00 Single item: 1 kg parcel - - 150.00 Bulk mail: composed of 20g letters 3.21 3.34 3.48 Indicator 26.9.2 Statistics on technological progress Bulk mail: composed of 100g letters 4.52 4.69 4.89 Indicator Value in Increase/decline 2009 since 2007 Note: - means no answers in questionnaire Percentage of letter mail benefiting from automated processing (e.g. sorting) No data - Source: USP Percentage of parcels benefiting from automated processing (e.g. sorting) No data -

Note: - means no answers in questionnaire Source: USP

26.8. SOCIAL AND CONSUMERS ASPECTS Indicator 26.9.3 Supply of e-commerce services Question Answer - Incumbent Indicator 26.8.1 Employment indicators, 2009 Do you supply own e-commerce services? What kind? No USP Source: USP Employment (thousand), in full time equivalents 26,800 Percentage of total country employment Share of civil servants - Share of part time and temporary employment - Share of outsourced and subcontracted employment 0 Note: - means no answer in questionnaire Source: USP

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Indicator 26.9.4 Supply of hybrid mail services, total market Indicator 26.10.2 Transit time for cross-border priority mail, 2009 Question Answer - Incumbent D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual Do you supply hybrid mail or virtual delivery solutions? What kind? Yes FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) If yes, how many years have you been supplying these services for? More than 15 - - - - 85 95.8 - - What share of turnover do you generate from hybrid mail and/or virtual deliv- - Note: - means no information ery solutions? What is the trend? Source: Ecorys (2008a) Do you plan to develop (new) hybrid mail / virtual delivery solutions? N/A Note: - means no answers in questionnaire Indicator 26.10.3 Quality of service indicators Source: USP Indicator Value

Percentage of lost mail No information Indicator 26.9.5 Developments within networks and mail consolidation services Number of postal outlets (post offices and agencies) and number of letter 2.3/10000 Question Answer boxes per 10.000 inhabitants. 26.5/10000 Have you carried out a major reorganisation of Continuous process to develop the network. Outsources all The implementation of CEN standards. Yes your logistics network? For example, decentralis- post offices for private costumers, about to outsource all Source: NRA ing, implementing hub & spoke systems? postal offices for business costumers too Do you use different networks for letters and par- Completely isolated networks. Due to different time con- cels at collection, sorting, transportation or deliv- straints, different sorting devices. The two networks does only ery levels? What are the reasons? overlap in circumstances like country side delivery etcetera. What is the relative importance of road, rail and Striving to change more road transports into rail transport. air as modes of transportation for mail? Have Have to use air from north to south in order to fulfill the USO. these shares changed recently? Why? Source: USP

Indicator 26.9.6 The most important environmental initiatives implemented Brief answer (in bullet points) • Main focus is to reduce CO2 emissions. • Investments have been made to change some of the road transport into rail transport. • 71 % of all waste is being recycled, and another 27 % is sent to energy production Source: USP

26.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 26.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 85 95,7 N/A N/A 97 99.9 N/A N/A Source: NRA

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27.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 27.1.1 Country facts Country facts Value Unit Year Population 62.0 Million 2010 Population growth 5.5 Percent 2000-2010

Population density 253 Pop. / km2 2010 Urbanisation rate 90 Percent 2008 GDP 1,693 PPS, billion 2009 GDP/capita 27,400 PPS 2009 Postal services to GDP ’99/09: 0.95%/0.84% Ratio 1998/2008

NRA Postal Services Commission (Postcomm) NRA responsibilities? Authorisation, Frequency of US*, Weight limit US parcels*, Scope of reserved area, , US rates, Special tariffs, Uniform tariff rules*, USO quality standards, USP accounts Incumbent Royal Mail Group Ltd Main activities of incumbent Mail Chapter 27 UNITED Employment, incumbent - Source of financing - Note: - means no answer in questionnaire Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP KINGDOM

Box 27.1 – Country summary The total volume of postal items fell by approximately 7.5 percent from 2007 to 2009. The largest declines were in publications, 20 percent and unaddressed items, 11 percent. The express segment grew by 5 percent. United Kingdom has not transposed Directive 2008/6/EC. It is required to do so before 1.1.2011 which is deadline. Draft bill under preparation in October 2010 and currently being subject to parliamentary procedure. All market segments of the postal sector are fully open. The competition for letter mail is emerging. For unaddressed items and cross-border outbound mail the competition is high – the British NPO has respectively 25% and 33% market share. There have been four competition cases associated with postal services in United Kingdom since 2007. Currently the British NPO is exempted for VAT on all products it sells. From 31 Janauary 2011 VAT will be applied to products Royal Mail is not obliged by licence to provide which are not price controlled.

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Indicator 27.1.2 Volume of items delivered by segment in total market, millions 27.2. REGULATORY FRAMEWORK AND PRACTICES of items Segment 2005* 2007* 2009* Indicator 27.2.1 National regulatory framework Addressed items Question Yes/No Name of law Year of enactment Remarks Letters Yes Postal Services 2000 Is postal law enacted? Correspondence & Direct 20,815 20,371 18,934 Act Mail No 2010 – Second half Draft law is Is Directive 2008/6 transposed? ready as of No- Publications 724 685 542 vember 2010 Unaddressed items 2,931 3,210 2,887 Is there a law that defines… Cross-border outbound 579 655 600 Scope of USO? No Express 129 149 156 Quality of USO? No Parcels 9 9 9 USO rates? No Total 25,187** 25,079** 23,127** USP accounts? No Note: *) The information we are prov Reserved area? No Authorisation procedures? No lowing years: 2004-05 (1st April 2004 to 31st March 2005), 2006-07 (1st April 2006 to 31st Universal service fund? No **) At presentMarch the 2007), volumes and inputted2008-09 are(1st solely April the 2008 Royal to 31st Mail March volumes 2009). User protection? Yes CEAR Act 2008 ided with relates to financial year Source: NRA Ministry/NRA: There is no legislation as such concer

Indicator 27.1.3 Revenues from segments in total market, millions of Euro vested responsibility for the USO in the NRA, Po through its licensing regime. However the Postal Segment 2005* 2007* s. The information2009* is for the fol- the universal service. Mail 8,915 9,024 7,099 Source: NRA, Ministry

Express 509 608 528 ning the various aspects of Logistics 87 95 66 Indicator 27.2.2 Regulation of services basedstcomm, on new which technologies in turn decides on these issues Question Answer Financial Breakdown not available Breakdown not available Breakdown not available Services Act 2000 sets the USO, as the PSA 2000 Others 283 287 279 NRA aims to consider the implications of hybrid mail as part of its re- Total 9,793** 10,014** 7,972** Are you aware of the presence of services view of Access (and aims to issue a consultation in 2011) and has not based on new technologies in your market? formed a view. One issue to examine wouldminimum be whether requirements the universal for Note: *) The information we are prov For example, hybrid mail or virtual delivery service provider is able to leverage its market power in areas like de- networks? livery into other emerging areas of business such as hybrid mail ser- ing years: 2004-05 (1st April 2004 to 31st March 2005), 2006-07 (1st April 2006 to 31st March vices and how regulation should respond to this. 2007), and 2008-09 (1st April 2008 to 31st March 2009). The NRA’s overall policy position on this issue is that regulation of the delivery component of hybrid mail may be necessary i.e. from the **) At present the revenues inputtedided with are relates solely to the financial Royal yearMail revenues Source: NRA Do you have plans to regulate such prod- time that the mail item is printed and put into an envelope to the ucts? For example, confidentiality of hybrid time it is delivered to the final addressee. mail? The NRA aims to consider this in the context of its review of the medium term regulatory framework (from 2012) and in the light of the s. The information is for the follow- proposed new legislation. Source: NRA

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Indicator 27.2.3 VAT treatment of postal services Indicator 27.2.6 Legal mechanisms to ensure quality of universal service Postal product Part of USO? VAT rate Legal basis Mechanism Yes/No Mechanism Yes/No Current legal frame- -Exempted- NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes work: All postal products sold by NPO Annual measurement of quality of service? Yes NRA can impose other remedies? Yes From 31 January 2011 -20 percent- Annual publication of results on quality of service Yes VAT will be applied at monitoring? the standard rate to cer- Source: NRA tain postal services: - All individually negotiated services Indicator 27.2.7 Financing the net cost of universal service - Parcelforce services - Unaddressed mail) Mechanism Yes/No Mechanism Yes/No - Mailroom services Reserved area No Who contributes to the compensation fund? N/A Note: - means no answers in questionnaire (Incumbent, competitors, other entities) Source: NRA Compensation fund No Public procurement No Size of compensation fund Direct compensation from public funds No Indicator 27.2.4 Services ensured as universal services under national law (if present, in Euro) Source: NRA Segment Defined as universal service by law? Are quality standards specified by law?

Basic letter post Yes Yes Bulk letters Yes Yes Indicator 27.2.8 Cost of universal service obligation and method for its calcula- Direct mail NRA: No*, as it is in- - tion cluded in bulk mail Question Answer Periodicals No No What is the cost estimate of USO? (if avail- NRA: Not yet available as work so far done only for certain ele- able, in Euro) ments in NRA-commissioned study on “Net costs of elements of Non-priority letter s Yes - the universal service, A report prepared for Postcomm, May 2008.” Basic parcel post Yes Yes USP: Recent cost estimate does not exist Bulk parcels No No What is the name of calculation method? (if NRA: Net Avoided Costs Approach Note: - means no answer in questionnaire available) Short description of calculation method (if Considers incremental cost of elements of universal service lost available) due to lower specification to determine net cost of each element. *Direct Mail is not a product but an offering, ho Is a thorough documentation of calculation NRA: Yes, full study is available on Postcomm’s web site: Source:tion NRA, (bulk USP mail) method available? Where? www.psc.gov.uk Is calculation method approved by the NRA? NRA: Yes Indicator 27.2.5 Mechanisms to ensure provision of universal service Does NRA calculate USO cost? NRA: No, not currently. Question weverAnswer the products used are part of the USO Sec- Source: NRA, USP Describe the role played by the three mechanisms: market forces, NRA: Postal Services Act 2000, USP through designation and public procurement. Are other safeguarding Licence condition measures present? Ministry: Designation (Royal Mail) Source: NRA

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in offering term contracts. ment for Mailsort (bulk, licences related to effective Indicator 27.2.9 Authorisation/licensing for services within and outside universal presorted) services for a competition, including service area minimum annual volume whether the contracts were of one million items and cost-justified, whether they Services within universal services If yes, state services e.g. letter post items, a minimum of one pre- “tied in” customers into us- otherwise insert “No” scheduled collection per ing Royal Mail services and week. whether the discounts were What licensing procedure is used? Individual licence discriminatory Which universal services are subject to individual license? Basic letter post, Bulk letters, Direct mail, Non- 2008 Mailsort The investigation was recently closed Mailsort Light is a spe- Postcomm received com- Priority letter post, Basic parcel post Light because Postcomm concluded that cial discounted service plaints that pricing of the Which universal services are subject to general authorisation? None there was insufficient evidence to find offered by Royal Mail to service was predatory/gave that Royal Mail was setting prices for senders of bulk advertis- rise to a margin squeeze Are authorisation requirements published (transparent)? Yes Mailsort Light that were predatory or ing mail. and launched an investiga-

Is the USP authorised under Art. 9*? - that it was applying a margin squeeze. tion into whether the ser- Services outside universal services Answer vice contravened Royal Mail’s licence obligations. For which services is general authorisation required? None 2009 Tailor In March 2009 Postcomm found that Tailor Made Incentives Discounts on products. For which services is an individual license required (ex ante ap- Requirement is set out in Postal Services Act Made Incen- Royal Mail’s offering of TMIs on its sec- (TMIs) are discounts of- proval)? 2000 – essentially a licence is required for con- tives Investiga- ond class Mailsort 2 services contra- fered by Royal Mail veying a letter weighing under 350 grams and tion vened its access headroom licence con- which are designed to costing less than £1, and subject to certain other ditions. In response to a proposed final encourage customers to exceptions. order from Postcomm, Royal Mail un- make further use of mail Note: - means no answer in questionnaire dertook not to reintroduce TMIs on for marketing and pro- Source: NRA Mailsort 2 products. Postcomm de- motion purposes in an cided, in the light of the circumstances, innovative way. to impose no penalty on this occasion. Indicator 27.2.10 Access to postal infrastructure ensured by Member States Note: *) This case is not an anti-t Access to: Yes/No Other conditions: Yes/No Source: NRA Post codes Yes Change of address database No Address database Yes USP return services No 27.3. REGULATION OFhrust PRICES case and AND therefore ACCOUNTING not listed as a competition case in the main text Post office boxes No Street letter boxes No

Delivery boxes Yes Sorting centres Yes Other conditions: Yes/No Indicator 27.3.1 Method of price regulation Require downstream access to USP Yes Segment Method Remark Source: NRA Basic letter post Price cap For all items in this service category Bulk letters Price cap For all items in this service category* Indicator 27.2.11 Involvement in competition cases since 2007 Direct mail Price cap For all items in this service category Periodicals Case name Case status Postal product(s) Issue concerned Non-priority letter post Price cap For all items in this service category Basic parcel post Price cap For all items in this service category 2009 Packets Investigation ongoing. Investigation opened Complaints related to alle- Investigation into the way Royal Mail gations of margin squeeze Bulk parcels Price cap For all items in this service category prices its access and re- and alleged breaches of Source: NRA* Some bulk letter and parcel products ar tail packet services for Conditions 10 and 11 of the business customers fol- Licence. lowing two complaints. in April 2011. 2008 Term Con- In May 2010, Postcomm closed its in- Term contracts are a Postcomm’s investigation tracts vestigation because it was not satis- form of discount avail- examined whether these fied, on the evidence available, that able for customers who contracts contravened the Royal Mail was in breach of its licence enter into a commit- provisions in Royal Mail’s e proposed to be removed from price cap regulation

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Indicator 27.3.2 Accounting requirements 27.4. ROLE OF NRA Question Answer Question Answer Separation of accounts No. of up/down stream accounts - Indicator 27.4.1: NRA powers Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - Task or power Yes/No Task or power Yes/No No. of reserved product accounts N/A Transparency Require USP cost allocation system? Yes Levy fines? Yes Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Yes Fines levied since 1.1.2006 regarding data require- Approve USP cost allocation system? No No. of unreserved product accounts 11 Last review of USP accounts 2010 ments? Body reviewing USP accounts (Type of body) Indep. Review cost allocation to non-USO? Yes Seek court order? Yes Application of tariff principles auditor Require data from USP (Art.22*)? Yes Cancel unlawful rates? Yes Bulk services within USO? Yes NRA issues statement of compliance? No Require data from non-USPs (Art.22*) Yes** Set new rates for USP? Yes Does USP conclude individual agreements? Yes Last publish statement of compliance N/A Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Individual agreement: cost based price required Yes Publish cost allocation system? No Require downstream access? Yes Individual agreement: NRA has cost data? Yes USP financial accounts audited? Yes USP has special tariffs? Yes Last published financial accounts 2008 Note: - means no information Up- and downstream accounts? No 28 *) Under Article 22 of Directive 2008/6/EC, Note: - means no answer in questionnaire **) Only if the non-USOs are lice Source: NRA the Postal Services Act Source: NRA

Indicator 27.3.3 Cost accounting system of the USP Indicator 27.4.2: NRA human andnsed financial operators resources or otherwise for specific purposes specified under Question Answer Question Answer What type of cost accounting system does FAC based on ABC principles with estimates of LRMC the USP use? (e.g. LRIC, FAC, LRMC) Size of budget? (€ thousands) 10,787 Is the cost accounting system approved by USP: Any changes to costing principles have to be approved as a con- Number of total staff ? - the National Regulatory Authority? dition of our Licence. The current changes are in the process of gain- ing approval – completion by March 2011 (Of which, staff dealing with postal affairs) 63 Source of NRA budget Fees collected from the National USP and from postal operators gen- Assessment of the system (pros and cons) erally. The National USP is the main provider. - Who approves NRA budget UK Government (HM Treasury) Note: FAC = fully allocated cost accounti Source: NRA Source: NRA, USP

Indicator 27.3.4 Promoting access to and affordability of postal services Question ng, LRMC =Yes/No long run marginalIf yes, costs. how? Non-discriminatory prices (Art. 12*) required? Yes - Affordability (Art. 12*) defined in national law? No - Note: - means no answers in questionnaire

Source:Article NRA, 12 Ministry of Directive 2008/6/EC

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Indicator 27.4.3: NRA independence Indicator 27.4.6 Regulation of user protection procedures and remedies Question Yes/No Question Answer Question Answer Question Answer Does the government have a formal right No* Who, and under what conditions, can ap- *** User protection procedures in postal or con- Both USP(s) required to issue annual Yes to guide NRA on policies? point NRA head? sumer law? report Some NRA decisions require governmen- No Who, and under what conditions, can **** Enforcement by NRA or national consumer Both NRA issues annual report No tal support? dismiss NRA head? protection authority? Can government suspend NRA orders? No** Minimum qualifications for NRA heads No Applies to non-USP(s) in USO area? Yes Review of operator decision en- Yes Note: *) However, the NRA can be di sured Applies to non-USO services Yes Agency reviewing operator Ombudsman rity or to discharge or facilitate Remedies by competent national authority? - (maximum fine) tions, the NRA must have regard to guidance give Note: - means no answers in questionnaire cial or environmental policies.rected to carry out certain functions Source: NRA **) However, the government the may discharge in national of an internationalinterest (and without NRA recommendation) sus-

pend the licensing regime for a ***) The NRA head is appointed by the Secretary of Indicator 27.4.7 Main issues of discussion between NRA and USP in the interest of national secu- the Chairman of the NRA and is appointedn unby the Secretaryobligation. of State In dischargingthe attainment its func- of so- Issue (Short description in bullet points) Code of Practice for Ministerialtime-limited Appointments period to of 6 months Both NRA/USP: made on the basis of the Code Principles of mini • New regulatory framework post 2011 and 2012 including scope of price control, universal service obligation, cost transparency and nature of access regime, equal opportunities, probity, openness an Source: NRA, USP ****) The Secretary of State for Business, Innova State for Business, Innovation & Skills. He is der the Commissioner for Public Appointments’ tions for termination of appointment are if the NRA Public Bodies, August 2009. The appointment is corporate. NRA head may be dismissed on grounds Indicator 27.4.8: NRA relations with customer associations d transparencysterial responsibility, and proportionality. merit, independent scrutiny, ready resigned, he is nominated as a candidate for Example of relation Short description ment, the National Assembly for Wales or N. Source: NRA tion & Skills may dismiss the NRA head. Condi-Consumer Focus (statu- NRA employee seconded to Consumer Focus 1 day per week Indicator 27.4.4 Complaint handling – appeal from NRA decisions tory consumer body) NRA director holds monthly meetings with Consumer Focus Question Answer Question is abolished or otherwiseAnswer ceases to be a bodySource: NRA Right of appeal from NRA ensured? Yes Can appellate body reverseof incapacity,NRA? orYes misbehaviour, or if not al- To whom is NRA decision appealed? Court Number of NRA decisionselection reversed? to the Parliame2 Ireland or to the Scottish Parliament. ARKET STRUCTURE AND COMPETITION Source: NRA 27.5. M nt, the Scottish Parlia- Indicator 27.5.1:Information about the incumbent Indicator 27.4.5 Enforcement of competition rules by NRA and cooperation with Question Answer Question Answer NCA Name of incumbent Royal Mail Group Ltd Main activities Mail Question Yes/No Question Yes/No Legal status Limited company subsidiary of Royal Employment - Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? No* Mail Holdings plc Note: ‘NCA’ national competition authority. State ownership (percent) 100 Source of financing - However, NRA has undertaken to share informat Note: - means no answer in questionnaire Source: USP breaches of competition law. NRA also shares info Source:proceedings NRA by the NCA in the UK or outside.

ion and consult with the NCA in relation to 262 rmation to facilitate crim

inal investigations or

UNITED KINGDOM

Indicator 27.5.2 Incumbent profits, 2009, national currency Indicator 27.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired Main activities of the acquired Main objectives behind the ac- Statistic Value Date company company quisition Total profit in 2009 £58m None Percentage of profit coming from letter mail 9% Percentage of profit coming from reserved area (if present) N/A Source: USP Source: USP Indicator 27.5.6 New entrants since 2008 Indicator 27.5.3 Mail market segmentation Segment No. of entrants Approximate End-to-end or up/downstream Name market share competition? Percentage opened No. of sig- to competition NRA: There are now around 60 licensees most of whom have been approved since 2008 Subject to li- nificant Under na- cense / au- competi- Names of significant com- Actual USP: 33 new licences since 2008 Segment tional law thorisation? tors petitors Source: NRA, USP Addressed items 100%

Letters 100% Correspondence 100% Yes, up to 350g Indicator 27.5.7 Cross border mail Direct mail 100% Yes, up to 350g Main actors (if not re- Terminal dues regu- Publications 100% Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Unaddressed items 100% * No - No Cross-border out- 100% Note: - means no answers in questionnaire bound *: No data available from NRA as outbound mail is not regulated by NRA Express 100% 4 Royal Mail, TNT, UPS, DHL, Citylink Source: NRA Parcels 100% 4 Royal Mail, UPS, TNT, DHL, Inditor 27.5.8: Citylink Total Source: NRA

Indicator 27.5.4 Sum of market shares of 3 main competitors (excl. incumbent) Segment Approximate sum of market shares of 3 main competitors

Letter post (open area) Less than 1% Parcels Less than 30% Express 45-50% Unaddressed items - Note: - means no answers in questionnaire

Source: Data monitor study 2009 – NB 2008 figures; Source: NRAcluding letters; Express services are defi

ned as next day guarantee, or quicker) Parcels services are defined as 0-32 kg (ex-

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27.6. STRUCTURE OF MARKET DEMAND Indicator 27.6.5 Effect of the financial crisis on revenues in 2009 Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Indicator 27.6.1 Revenues and volumes generated by consumers vs. business Less than 5% 5-15% more than 15% customers in 2009, national currency, millions of items Addressed items (domestic) Letters Business and private consumers Approximate market Segment Revenue Volume share in the total market Correspondence Addressed items (domestic) 18,171 Reserved area N/A Letters 7,906 Direct mail Correspondence Publications Reserved area Unaddressed items Direct mail 9,701 Cross-border mail outbound Publications 471 Express Unaddressed items 2,858 Parcels Cross-border mail outbound 1,223** Total Express Source: USP Parcels 93*** Total 22,252 Note: * RM does not split between business customer 27.7. PRICE PERFORMANCE:

audited RMG Regulatory Financial Statements for Source:Price USPand Controlled Outbound) Area ***Special £m revenue Delivery, 2008-09: Standard 5,594 Indicator 27.7.1 Standard public tariffs, 2005-2009, national currency Segment 2005 2007 2009 Single item: 20g tariff letter 30p 34p 39p Indicator 27.6.2 Growth rate in revenues and volumes generated by consumers vs. business customers between 2008-2009Source: USPIndicator 27.6.3 Revenues and volumes generated by consumers vs. business customers in 2008, national currency, millions of items ource: USP s and private consumers. The data is based on un- Indicator 27.6.4 Trends in mail substitution Single item: 100g priority mail 30p 34p 39p 2008-09. ** International (includes Inbound Single item: 500g insured and registered £4.25 £4.75 £5.40 Short description (in bullet points) Parcels (not allocated in IPC category). Single item: 1 kg parcel £3.45 £3.85 £4.41 • “In future emerging electronic alternatives may affect more substantially the development in letter post vol- Bulk mail: composed of 20g letters - 19.0p 21.0p ume (especially correspondence)” ITA/WIK (2009b) Bulk mail: composed of 100g letters - 19.0p 21.0p Source: USP Note: - means no answers in questionnaire Source: USP

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27.8. SOCIAL AND CONSUMERS ASPECTS Indicator 27.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007 Indicator 27.8.1 Employment indicators, 2009 Percentage of letter mail benefiting from automated processing (e.g. sorting) 82% + 10 (72% in 2007) USP Percentage of parcels benefiting from automated processing (e.g. sorting) 0% 0% Employment (thousand), in full time equivalents 176K Source: USP Percentage of total country employment

Share of civil servants - Share of part time and temporary employment - Indicator 27.9.3 Supply of e-commerce services, total market Share of outsourced and subcontracted employment N/A Question Answer - Incumbent Note: - means no answers in questionnaire Do you supply own e-commerce services? What kind? Bills Online, Responsivate, E-Commerce Solution Source: USP What share of turnover do you generate from own e- N/A commerce services? What is the trend? What own e-commerce services do you plan to develop? N/A Indicator 27.8.2 Wage and productivity indicators Are you able to indicate how the percentage of your turnover - Incumbent that originates from or is related to third-party e-commerce Wages as a proportion of total costs 64% transactions (e.g. purchases on the internet) Average wage per hour (€) - Note: - means no answers in questionnaire Note: - means no answers in questionnaire Source: USP Source: Royal Mail, Annual report 2009 Indicator 27.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent 27.9. TECHNOLOGICAL DEVELOPMENTS Do you supply hybrid mail or virtual delivery solutions? What kind? N/A Source: USP

Indicator 27.9.1 Innovation, technology and new services Service Do you Volume (mil- Do you plan Remarks offer? lion of items) to offer? Indicator 27.9.5 Developments within networks and mail consolidation services Hybrid mail Yes Not applicable - RM offers a range of products that Question Answer would classify as Hybrid mail. However, Have you carried out a major reorganisation of There have been no major reorganisations in the past few years. it does not publish volumes of these your logistics network? For example, decentral- The most recent network change (N2009) updated the network products. Examples of hybrid mail in- ising, implementing hub & spoke systems? in light volume decline and known infrastructure changes - For clude, Mailshots Online. example Mail Centre closures Virtual delivery of mail No Not applicable - - Do you use different networks for letters and Parcels, yes – Parcelforce Worldwide is a separate business to parcels at collection, sorting, transportation or Royal Mail Letters. All other letters/packets go through RM Let- delivery levels? What are the reasons? ters. Pick up locations for - Not applicable - - parcels (parcel shops) What is the relative importance of road, rail and All are important modes of transport and provide the necessary air as modes of transportation for mail? Have connectivity for the products we handle. As a pipeline business, Note: - means no answers in questionnaire these shares changed recently? Why? each mode of transport is of equal importance as our products Source: USP would fail service if one element was missing. Source: USP

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Indicator 27.9.6 The most important environmental initiatives implemented Indicator 27.10.2 Transit time for cross-border priority mail, 2007 Brief answer (in bullet points) D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 • Royal Mail aspires to become carbon neutral by 2015 dard (% actual dard (% actual dard (% actual dard (% actual • Help customers to do business in a sustainable and competitive way. FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) • Company-wide awareness programme introduced to help its 180,000 people switch to greener driving, whether for social or work driving. - - - - 85 93.2 - - • Royal Mail introduced double-deck trailers to its fleet. Note: - means no information • Royal Mail is supporting the development of the hydrogen sector through universal design specifications for hy- Source: Ecorys (2008a) dro-gen fuel cell postal vehicles in conjunction with CENEX, Fuel Cell Europe and Post Europe. • Parcelforce Worldwide™ are using technical solutions contributing to reduced energy consumption can be dem- onstrated by the installation of Automatic Meter Reading (AMR), efficient heating, lighting and ventilation sys- Indicator 27.10.3 Quality of service indicators tems across large energy-consuming sites. • Distribution drivers return flat packed waste cardboard from delivery offices to the mail centre once they have Indicator Value distributed the post. Percentage of lost mail Not recorded • Royal Mail Group joined the 10:10 campaign, which aims to reduce national carbon emissions by 10% during Number of postal outlets (post offices and agencies) and number of letter boxes 1.93 Postal outlets 2010. per 10.000 inhabitants. 18,55 letter boxes • Recruiting and training a network of environment champions at site level, with the aim of raising awareness of, and involving colleagues in, energy saving measures. The implementation of CEN standards. EN13850, EN14508 and EN • Launching the first payroll giving carbon neutral scheme, to encourage the reduction and offset of personal 14534 all implemented emissions Source: NRA • Curb water use. • Royal Mail Group is working with waste collection partner, BIFFA, on a plan to roll out mixed recycling across the estate. • In 2009 76.5% of direct marketing material was recycled. • Royal Mail developed a Carbon Neutral Door to Door product. • During 2009 Parcelforce Worldwide™ piloted activity that sees a key customer replace conventional packaging with reusable packaging. • Roughly 33% of RMG’s customers took up the option to use Parcelforce Worldwide’s ‘Carbon Free’ service in its launch period alone. • Royal Mail developed a service allowing consumers to recycle their old and unwanted mobile phones, digital cameras and MP3 players for cash for themselves or for charity. Note: Royal Mail Holdings plc - Royal Mail Group Corporate Social Responsibility Report, 2008/09 Touching Lives – Connecting People, Sust Source: USP Annual Report and Financial Statements (Year ended 28 March 2010)

27.10. QUALITY OF SERVICE DEVELOPMENTS ainability at Royal Mail Group, 2008 Indicator 27.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 93 85.2 - - 98.5 95.7 - - Note: - means no answers in questionnaire Source: NRA

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28.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 28.1.1 Country facts Country facts Value Unit Year Population 0.3 Million 2010 Population growth 13.8 Percent 2000-2010

Population density 3Pop. / km2 2010 Urbanisation rate 92.3 Percent 2008 GDP 9.0 PPS, billion 2009 GDP/capita 28,300 PPS 2009 Postal services to GDP ’99/09: 0.52%/0.49% Ratio 1998/2008

NRA Post and Telecom Administration (PTA) NRA responsibilities? Frequency of US, Authorisation, Administration of USO fund, US rates, Spe- cial tariffs, USP accounts, Quality of US, User complaints Cross subsidy in US, Cross subsidy non-US Incumbent Iceland Post Main activities of incumbent Postal services, retail Employment, incumbent 1.091 staff (835 FTE) Source of financing Financed by own revenues (no state funding or payment through compensa- Chapter 28 ICELAND tion fund) Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

Indicator 28.1.2 Volume of items delivered by segment in total market, millions of items Box 28.1 – Country summary Segment 2005 2007 2009 The total volume of postal items fell over 20 percent from 2007 to 2009. The largest declines Addressed items 62,46 57,51 47,90 took place in publications (35 percent), unaddressed items (25 percent), express and parcels Letters 59,07 54,10 45,69 (20 percent both) and letter mail (15 percent). Correspondence - - - As a member of EEA, the process of transposition of the 3rd Postal Directive by Iceland is sub- Direct mail - - - ject to a specific procedure envisaged by the EEA agreement. Publications 3,39 3,41 2,21 Correspondence is a reserved area market segment. Unaddressed items 55,44 48,90 36,34 The Icelandic NPO has 99.9% of the market in letter mail and cross-border mail. For unad- Cross-border outbound 1,85 1,75 1,68 dressed items it has 60% of the market share. Express - - - Net cost of USO estimated to 10 percent of €40 million turnover (cost of providing universal Parcels 0,84 0,84 0,66 service outside capital area). Total 120,59 109,00 86,58 The USO products sold by the Icelandic NPO are VAT exempted. Note: - Means no answer in questionnaire Source: NRA

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Indicator 28.1.3 Revenues from segments in total market, millions of Euro Indicator 28.2.3 VAT treatment of postal services Postal product Part of USO? VAT rate o Legal basis (Yes/No) (incl. exemptions) 28.2. REGULATORY FRAMEWORK AND PRACTICES All letters up to 2 kg Exempted - Parcels Yes up to 20 kg 25,5% By law Indicator 28.2.1 National regulatory framework Source: NRA Question Yes/no Name of law Year of en- Remarks actment Indicator 28.2.4 Services ensured as universal services under national law Is postal law en- Yes Postal Services Act No. 19, 18 2003 acted? March 2002 Segment Defined as universal service by law? Are quality standards specified by law? Is Directive 2008/6 No 2012 Have sought extension Basic letter post Yes Yes transposed? of deadline until 2013 Bulk letters Yes Yes Is there a law that defines… Direct mail Yes Yes Scope of USO? Yes Ministry: Postal Services Act, Ministry: 2003 Periodicals Yes No and regulation 364/2003 on NRA: 2009 Non-priority letter s No USP: No universal services NRA: - Quality of USO? Yes Ministry: Regulation 364/2003 Ministry: 2003 Basic parcel post Yes No on universal services NRA: 2009 Bulk parcels No USP: No USO rates? Ministry: No NRA: - NRA: Yes Note: The Ministry and the NRA have answered differently on some questions USP accounts? Yes Ministry: Regulation 313/2005 Ministry: 2005 Source: USP, NRA NRA: 2005 Reserved area? Ministry: No NRA: Yes Indicator 28.2.5 Mechanisms to ensure provision of universal service Authorisation proce- Yes Ministry: Chapter VI, Postal Ser- Ministry: 2003 dures? vices Act Question Answer Universal service Yes Ministry: Chapter X, Postal Ser- Ministry: 2003 Describe the role played by the Ministry: The Icelandic state has exclusive rights to postal services for items fund? vices Act three mechanisms: market forces, of correspondence of up to 50 g in weight, and a state owned universal ser- User protection? Ministry: Ministry: Postal Services Act Ministry: 2003 Ministry: I.e. complaints designation and public procure- vice provider is obliged to provide universal services throughout the country. Yes and compensation ment. Are other safeguarding In addition a few operators operate on the market, mainly in the capital city. measures present? NRA: Designation procedure Note: The Ministry and the NRA have answered differently on some questions Source: Ministry, NRA Source: Ministry, NRA

Indicator 28.2.2 Regulation of services based on new technologies Indicator 28.2.6 Legal mechanisms to ensure quality of universal service Question Answer Mechanism Yes/No Mechanism Yes/No Are you aware of the presence of services based on new technologies in your market? For ex- Yes NRA sets monitoring standards? Yes NRA can fine USP(s)? No ample, hybrid mail or virtual delivery networks? Annual measurement of quality of service? Yes NRA can impose other remedies? Yes Do you have plans to regulate such products? For example, confidentiality of hybrid mail? - Annual publication of results on quality of service Yes Note: - Means no answer in questionnaire monitoring? Source: NRA Source: NRA

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Indicator 28.2.7 Financing the net cost of universal service Indicator 28.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area Reserved area Yes Who contributes to the compensation fund? Yes Services within universal services If yes, state services e.g. letter post (Incumbent, competitors, other entities) items, otherwise insert “No” Compensation fund Yes Public procurement Yes What licensing procedure is used? Designation for the reserved area and for the Size of compensation fund - Direct compensation from public funds No universal services (if present, in Euro) Which universal services are subject to individual license? Correspondence Note: - means no answers in questionnaire Which universal services are subject to general authorisation? None Source: NRA Are authorisation requirements published (transparent)? Yes Is the USP authorised under Art. 9*? - Indicator 28.2.8 Cost of universal service obligation and method for its calcula- Services outside universal services Answer tion For which services is general authorisation required? - Question Answer For which services is an individual license required (ex ante ap- - What is the cost estimate of USO? (if USP: 600 million ISK (3.75 million EUR) proval)? available, in Euro) NRA: The cost of USO is under investigation Note: - means no answers in questionnaire What is the name of calculation USP: - Source: NRA method? (if available) Short description of calculation USP: Calculation of additional costs of providing universal service com- method (if available) pared to costs of providing universal service in capital area Indicator 28.2.10 Access to postal infrastructure ensured by Member States Is a thorough documentation of calcu- USP: No Access to: Yes/No Other conditions: Yes/No lation method available? Where? Post codes No Change of address database No Is calculation method approved by the USP: No NRA? Address database No USP return services No Does NRA calculate USO cost? - Post office boxes No Street letter boxes - Note: - Means no answer in questionnaire Delivery boxes Yes Sorting centres - Source: USP Other conditions: Yes/No Require downstream access to USP No Note: - means no answers in questionnaire Source: NRA

Indicator 28.2.11 Involvement in competition cases since 2007 Case name Case status Postal product(s) con- Issue cerned Case no. 0707005 Ongoing Bulk letters Rebates Source: USP

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28.3. REGULATION OF PRICES AND ACCOUNTING Indicator 28.3.3 Cost accounting system of the USP Question Answer Indicator 28.3.1 Method of price regulation What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) USP: ABC = Activity Based Costs NRA: Fully allocated cost Segment Method Remark Is the cost accounting system approved by the National Regulatory Authority? No Basic letter post Ex ante For items in reserved or licensed area, otherwise ex post Bulk letters Ex ante For items in reserved or licensed area, otherwise ex post Assessment of the system (pros and cons) Direct mail - Periodicals Note: - means no answers in questionnaire Non-priority letter post Source: NRA, USP Basic parcel post Bulk parcels Indicator 28.3.4 Promoting access to and affordability of postal services Source: NRA Question Yes/No If yes, how? Non-discriminatory prices Yes Same prices apply throughout the country. (Art. 12) required? Indicator 28.3.2 Accounting requirements Affordability (Art. 12) de- No Art. 6 of the Postal Services Act states that the Icelandic state shall ensure Question Answer Question Answer fined in national law? all persons equal rights to access to certain aspects of postal services, universal service, of special quality, and at affordable prices, but is not further Separation of accounts No. of up/down stream accounts - defined by law. It is up to the regulator to enforce the article. Did NRA approve product accounts? No Special Tariff: 1st year of data to NRA - Source: Ministry, NRA No. of reserved product accounts 1 Transparency Unreserved product accounts required? Yes Independent body reviews USP accounts? No No. of unreserved product accounts - Last review of USP accounts - 28.4. ROLE OF NRA Body reviewing USP accounts (Type of body, -

Application of tariff principles e.g. NRA, USP) To bulk services within USO? Yes NRA issues statement of compliance? - Indicator 28.4.1 NRA powers Does USP conclude individual agreements? Yes Last publish statement of compliance - Task or power Yes/No Task or power Yes/No Individual agreement: cost-based price required? None Publish cost allocation system? No Require USP cost allocation system? Yes Levy fines? Yes Individual agreement: NRA has cost data? Yes USP financial accts audited? Yes Approve USP cost allocation system? No Fines levied since 1.1.2006 regarding data require- No USP has special tariffs? Yes Last published financial accounts 2009 ments? Review cost allocation to non-USO? No Seek court order? No To up- and downstream accounts? No Require data from USP (Art.22)? Yes Cancel unlawful rates? Yes Note: - means no answers in questionnaire Require data from non-USPs (Art.22) Yes Set new rates for USP? Yes Source: NRA Require data studies? Yes Court orders sought since 1.1.2006 regarding data? - Require downstream access? No Note: - means no answers in questionnaire Source: NRA

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Indicator 28.4.2 NRA human and financial resources Indicator 28.4.6 Regulation of user protection procedures and remedies Question Answer Question Answer Question Answer Size of budget? (€ thousands) 80 User protection procedures in postal or con- Both USP(s) required to issue annual report No Number of total staff ? (Of which, 25 (2 dealing with postal affairs) sumer law? staff dealing with postal affairs) Enforcement by NRA or national consumer Both NRA issues annual report No Source of NRA budget Fees collected from postal operators generally and from non-postal opera- protection authority (NCPA)? tors Applies to non-USP(s) in USO area? No Review of operator decision ensured Yes Who approves NRA budget Parliament Applies to non-USO services Yes Agency reviewing operator NRA Source: NRA Remedies by competent national authority? - (maximum fee) Indicator 28.4.3 NRA independence Note: - means no answer in questionnaire Source: NRA Question Yes/No Question Answer

Does the government have a formal right No Who, and under what conditions, can ap- - to guide NRA on policies? point NRA head? Indicator 28.4.7 Main issues of discussion between NRA and USP Some NRA decisions require governmen- No Who, and under what conditions, can - Issue (Short description in bullet points) tal support? dismiss NRA head? Can government suspend NRA orders? No Minimum qualifications for NRA heads No • Scope of universal service • Pricing of reserved services Note: - means no answers in questionnaire • Delivery in rural areas Source: NRA Source: USP

Indicator 28.4.8 Indicator 28.4.4 Complaint handling – appeal from NRA decisions

Question Answer Question Answer Right of appeal from NRA ensured? Yes Can appellate body reverse NRA? Yes 28.5. MARKET STRUCTURE AND COMPETITION To whom is NRA decision ap- Specialized board of Number of NRA decisions reversed? 1 pealed? appeals Source: NRA Indicator 28.5.1 Information about the incumbent Question Answer Question Answer Name of incum- Iceland Post Main activi- Postal services, retail Indicator 28.4.5 Enforcement of competition rules by NRA and cooperation with bent ties NCA Legal status Public limited liability company Employment 1.091 staff (835 FTE) Question Yes/No Question Yes/No State ownership 100% Source of Financed by own revenues (no state funding (percent) financing or payment through compensation fund) Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Source: USP Note: -‘NCA’ national competition authority. Source: NRA

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Indicator 28.5.2 Incumbent profits, 2009, national currency Indicator 28.5.7 Cross border mail Statistic Value Main actors (if not re- Terminal dues regu- Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Total profit in 2009 92.3 million ISK Percentage of profit coming from letter mail 51% 1.8 million items per year - - No Percentage of profit coming from reserved area (if present) -14% (loss) Note: - means no answers in questionnaire Source: NRA Source: USP Indicator 28.5.8:

Indicator 28.5.3 Mail market segmentation Percentage opened to Subject to li- 28.6. STRUCTURE OF MARKET DEMAND No. of sig- competition cense / au- Names of significant Segment nificant- Under na- thorisation? competitors Actual competitors tional law (Yes/No) Indicator 28.6.1 Revenues and volumes generated by consumers vs. business Addressed items customers in 2009, national currency, millions of items Letters Segment Business customers Private consumers Approximate mar- Correspondence Reserved area Yes Revenue Volume Revenue Volume ket share in the to- Direct mail tal market Publications Addressed items (domestic) 2.432,53 41,72 480,85 6,08 - Unaddressed items Letters 2.282,47 39,67 477,26 6,02 99,9 Cross-border outbound Correspondence - - - - - Express Reserved area 2.048.56 37,86 398,80 5,62 100 Parcels Direct mail - - - - - Total Publications 150,06 2,05 3,59 0,06 - Source: NRA Unaddressed items 316,89 34,31 20,92 2,03 60 Cross-border mail outbound 101,63 0,34 265,31 1,34 100

Indicator 28.5.4: Sum of market shares of 3 main competitors (excl. incumbent) Express 3,97 0,01 0,02 0,00 - Source: NRA Parcels 387,63 0,48 165,02 0,18 - Indicator 28.5.5 Mergers and acquisitions of incumbent since 2007 Total 3.242,65 76,86 932,12 9,62 - Name of acquired Main activities of the acquired Main objectives behind the ac- Date Note: - Means no answer in questionnaire company company quisition Source: USP 2008 INTIS Webmeasure, internet root domain acquisition of new technology Indicator 28.6.2: Source: USP

Indicator 28.5.6 New entrants since 2008 Segment No. of entrants Approximate mar- End-to-end or up/downstream Name ket share competition? No new entrants Source: NRA

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Indicator 28.6.3 Revenues and volumes generated by consumers vs. business Indicator 28.6.5 Effect of the financial crisis on revenues in 2009 customers in 2008, national currency, millions of items Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Segment Business customers Private consumers Less than 5% 5-15% more than 15% Revenue Volume Revenue Volume Addressed items (domestic) Decline Addressed items (domestic) 2.707,29 45,04 500,97 6,56 Letters Decline Letters 2.496,95 41,87 497,57 6,50 Correspondence - Correspondence - - - - Reserved area Decline Reserved area 2.202,14 39,50 415,46 6,03 Direct mail - Direct mail - - - - Publications Decline Publications 210,34 3,17 3,40 0,06 Unaddressed items Increase Unaddressed items 323,61 38,20 19,33 1,91 Cross-border mail outbound Increase Cross-border mail outbound 88,92 0,43 199,85 1,26 Express Increase Express 1,46 0,01 0,02 0,00 Parcels Increase Parcels 367,98 0,54150,03 0,18 Total Total 3.184,98 84,21 870,20 9,91 Note: - means no information Source: USP Source: USP 28.7. PRICE PERFORMANCE: Indicator 28.6.4 Trends in mail substitution Short description (in bullet points) Indicator 28.7.1 Standard public tariffs, 2005-2009, national currency • Business mail and financial statements are most affected by electronic substitution. Substitution is accel- erated by the financial crisis. Segment 2005 2007 2009 • “Decline of domestic and cross border letter post may result from emerging electronic alternatives: Pene- Single item: 20g tariff letter 50 ISK 60 ISK 70 ISK tration of internet and broadband access is extremely high since years” ITA/WIK (2009b) Single item: 100g priority mail 70 ISK 80 ISK 90 ISK Note: - means no information Single item: 500g insured and 640 ISK 735 ISK 1.100 ISK Source: USP registered Single item: 1 kg parcel 490-545 ISK based on de- 575-650 ISK based on de- 650-800 ISK based on delivery area livery area livery area Bulk mail: composed of 20g 50 ISK less 2,5%-30% 60 ISK less 2,5%-30% 70 ISK less 2,5-30% dis- letters discount based on vol- discount based on vol- count based on volume ume and machinability ume and machinability and machinability Bulk mail: composed of 100g 70 ISK less 2,5%-25% 80 ISK less 2,5%-25% 90 ISK less 2,5-25% dis- letters discount based on vol- discount based on vol- count based on volume ume ume Source: USP

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28.8. SOCIAL AND CONSUMERS ASPECTS Indicator 28.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007 Indicator 28.8.1 Employment indicators, 2009 Percentage of letter mail benefiting from automated processing (e.g. sorting) 70% Negligible USP Percentage of parcels benefiting from automated processing (e.g. sorting) 0% NA Employment (thousand), in full time equivalents 0.835 Source: USP Percentage of total country employment

Share of civil servants 0% Share of part time and temporary employment 38,5% Indicator 28.9.3 Supply of e-commerce services, total market Share of outsourced and subcontracted employment 71 Question Answer - Incumbent Note: - means no answers in questionnaire Do you supply own e-commerce services? What kind? Yes; Online Stamps, Telegrams, greeting cards Source: USP What share of turnover do you generate from own e- Online stamps 35%, Telegrams 25 %, greeting cards commerce services? What is the trend? 100 % What own e-commerce services do you plan to develop? Various implementations Indicator 28.8.2 Wage and productivity indicators Are you able to indicate how the percentage of your turn- - Incumbent over that originates from or is related to third-party e- commerce transactions (e.g. purchases on the internet) Wages as a proportion of total costs 57% Note: - means no answers in questionnaire Average wage per hour (€) 1.319,49 ISK Productivity measured by output per person employed Source: USP Note: - means no answers in questionnaire Source: USP Indicator 28.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent 28.9. TECHNOLOGICAL DEVELOPMENTS Do you supply hybrid mail or virtual delivery solutions? What kind? Not at the moment If yes, how many years have you been supplying these services for? Hybrid mail division operated 1997- 2002 (sold) Indicator 28.9.1 Innovation, technology and new services What share of turnover do you generate from hybrid mail and/or virtual NA Service Do you of- Do you plan Remarks delivery solutions? What is the trend? fer? to offer? Do you plan to develop (new) hybrid mail / virtual delivery solutions? Yes, launch of new service in autumn 2010 Hybrid mail No Yes Launch autumn 2010 Source: USP Virtual delivery of mail No Yes Launch autumn 2010 Pick up locations for parcels (parcel shops) No No Other examples (insert name) Postcard web Web for own production of Indicator 28.9.5 Developments within networks and mail consolidation services postcards with personal photos Question Answer Personal Web for own production of stamps stamps with personal photos Have you carried out a major reorganisation of your logistics net- Partial reorganisation of network to better work? For example, decentralising, implementing hub & spoke sys- combine rural delivery and transportation to Telegram web Web for own production of tele- tems? rural post offices. grams with personal photos Do you use different networks for letters and parcels at collection, Different delivery networks for bulky letters Source: USP sorting, transportation or delivery levels? What are the reasons? and parcels in urban areas: cost reduction What is the relative importance of road, rail and air as modes of Rail: NA. Domestic transportation mainly by transportation for mail? Have these shares changed recently? Why? road for cost reasons. No changes recently. Source: USP

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Indicator 28.9.6 The most important environmental initiatives implemented Indicator 28.10.2 Transit time for cross-border priority mail, 2007 Brief answer (in bullet points) D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 • Use of methane cars in delivery network dard (% actual dard (% actual dard (% actual dard (% actual • Optimisation of transportation and delivery routes to cut down mileage FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) • Use of software in urban delivery cars to encourage fuel efficient driving by monitoring driving performance. - - - - 85 90 - - Source: USP Note: - means no information Source: Ecorys (2008a) 28.10. QUALITY OF SERVICE DEVELOPMENTS Indicator 28.10.3 Quality of service indicators Indicator Value Indicator 28.10.1 Transit time for domestic priority mail, 2009 Percentage of lost mail - D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual Number of postal outlets (post offices and agencies) and number of letter 2,48 postal outlets per 10.000 boxes per 10.000 inhabitants. Inhabitants FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) The implementation of CEN standards. Yes 85 85 - - 97 100 - - Note: - means no answer in questionnaire Note: - means no answers in questionnaire Source: NRA Source: NRA

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29.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 29.1.1 Country facts Country facts Value Unit Year Population 0.04 Million 2010 Population growth 10.7 Percent 2010

Population density 224 Pop. / km2 2000-2010 Urbanisation rate -Percent GDP 1.79 PPS, billion 2008 GDP/capita 50200 PPS 2008 Postal services to GDP ’99/09: -Ratio

NRA Regierung des Fürstentums Liechtenstein NRA responsibilities? The Directive 2008/6/EC has not been yet transposed in the national law. The national regulatory authority is currently set up within the Government of Liechtenstein (Department Economy). The new law on postal services will set up an independent national regulatory authority. Incumbent Liechtensteinische Post AG Chapter 29 Main activities of incumbent Addressed items, unadressed items, parcels and express Employment, incumbent - Source of financing - Source: ITA/WIK (2009) Country fiche, Eurostat, NRA LIECHTENSTEIN Indicator 29.1.2 Indicator 29.1.3 Box 29.1 – Country summary As a member of EEA, the process of transposition of the 3rd Postal Directive by Liechtenstein is subject to a specific procedure envisaged by the EEA agreement. However, national Working Group currently drafting transposition measures in anticipation. The national regulatory authority is currently set up within the Government of Liechtenstein (Department Economy). The new law on postal services will set up an independent national regulatory authority. Addressed items and cross border outbound mail is reserved area for items of size less than 50g. The NPO in Liechtenstein has very little competition for addressed items, unaddressed items and cross border outbound mail and has a large market share in these areas. For express and parcels the NPO of Liechtenstein has a large market share but there is some competition. The NPO of Liechtenstein is exempted on VAT for all products related to the reserved area.

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29.2. REGULATORY FRAMEWORK AND PRACTICES Indicator 29.2.2 Regulation of services based on new technologies Question Answer (in bullet points) Are you aware of the presence of services based - No such products available in the market yet; 29.2.1 National regulatory framework on new technologies in your market? For exam- - Introduction envisaged by incumbent operator in the future; Question Yes/N Name of law Year of Remarks ple, hybrid mail or virtual delivery networks? - Related logistics and other services offered, e.g. postgate.li o enactment Do you have plans to regulate such products? No Information available yet For example, confidentiality of hybrid mail? Yes Gesetz vom 18. Dezember 1998 19 February Link to law (in German): Is postal law über das liechtensteinische Post- 1999 http://www.gesetze.li/Seite3.jsp?LG Source: NRA enacted? wesen (Law on postal Services) Blm=1999035 No Expected 1. Directive not yet incorporated into Is Directive January 2012 the EEA Agreement. However, na- Indicator 29.2.3 VAT treatment of postal services 2008/6 tional Working Group currently draft- Postal product Part of USO? VAT rate Legal basis transposed? ing transposition measures in anticipation. (Yes/No) Reserved area (letters Yes exemption Law of 22 October 2009 on Is there a law that defines… under 50 gr.) VAT Yes Gesetz vom 18. Dezember 1998 19 February Link to ordinance (in German): Source: NRA, Ministry über das liechtensteinische Post- 1999 http://www.gesetze.li/ Scope of wesen, Verordnung vom 14. De- 1 January Seite3.jsp?LGBlm=1999248 USO? zember 1999 zum Gesetz über das 2000 liechtensteinische Postwesen (Or- Indicator 29.2.4 Services ensured as universal services under national law dinance on Postal Services) Segment Defined as universal service by law? Are quality standards specified by law? Yes Gesetz vom 18. Dezember 1998 19 February (Yes/Not confirmed/No) (Yes/No/Other than Art. 16) über das liechtensteinische Post- 1999 Quality of wesen, Verordnung vom 14. De- 1 January Basic letter post Yes Yes, Art. 16 DIR 97/67/EG USO? zember 1999 zum Gesetz über das 2000 Bulk letters No No liechtensteinische Postwesen Direct mail No No USO rates? No Currently approved by Government Periodicals Yes No USP ac- No counts? Non-priority letter s Yes Yes, Art. 16 DIR 97/67/EG Yes Gesetz vom 18. Dezember 1998 19 February Reserved service for the Liechten- Basic parcel post Yes (20kg) Yes, Art. 16 DIR 97/67/EG Reserved über das liechtensteinische Post- 1999 stein Post AG for letters under 50 gr. Bulk parcels No No area? wesen Source: NRA, Ministry Authorisation No procedures? No No fund, put mechanism for direct Universal Indicator 29.2.5 Mechanisms to ensure provision of universal service compensation by other operators service fund? foreseen in Postal Services Law Question Answer Yes Gesetz vom 18. Dezember 1998 19 February Describe the role played by the three mechanisms: market The Directive 2008/6/EC has not been yet transposed User protec- über das liechtensteinische Post- 1999 tion? forces, designation and public procurement. Are other into national law. wesen safeguarding measures present? Other special Yes Gesetz vom 18. Dezember 1998 Right to provide payment and other Source: NRA rights über das liechtensteinische Post- financial services (which)? wesen Source: NRA, Ministry

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Indicator 29.2.6 Legal mechanisms to ensure quality of universal service Indicator 29.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area NRA sets monitoring standards? Yes NRA can fine USP(s)? No Services within universal services If yes, state services e.g. Remarks, experiences, problems Annual measurement of quality of service? Yes NRA can impose other remedies? No letter post items, other- encountered Annual publication of results on quality of ser- Report to the wise insert “No” vice monitoring? government What licensing procedure is used? No General authorisation with obligation to Source: NRA give prior notice of service provision for services outside reserved area. Which universal services are subject to No Indicator 29.2.7 Financing the net cost of universal service individual license? Mechanism Yes/No Mechanism Yes/No Which universal services are subject to All, except reserved area. Reserved area Yes Who contributes to the compensation fund? Competitors general authorisation? (Incumbent, competitors, other entities) Are authorisation requirements pub- NA Compensation fund No Public procurement No lished (transparent)? Size of compensation fund NA Direct compensation from public funds No Is the USP authorised under Art. 9*? No (if present, in Euro) Services outside universal services Answer Source: NRA For which services is general authorisation required? For none outside the universal service area For which services is an individual license required (ex ante approval)? No Indicator 29.2.8 Cost of universal service obligation and method for its calcula- Note: *) Article 9 of Directive2008/6/EC tion Source: NRA

Question Answer What is the cost estimate of USO? (if Not available. Currently no compensation paid towards any net costs of Indicator 29.2.10 Access to postal infrastructure ensured by Member States available, in Euro) providing USO. Directive 2008/6/EG not transposed yet. Access to: Yes/No Other conditions: Yes/No Source: NRA Post codes No Change of address database No Address database No USP return services No Post office boxes No Street letter boxes No Delivery boxes No Sorting centres No Other conditions: Yes/No Require downstream access to USP No Source: NRA

Indicator 29.2.11:

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29.3. REGULATION OF PRICES AND ACCOUNTING Indicator 29.3.4 Promoting access to and affordability of postal services Question Yes/No If yes, how? Non-discriminatory prices Yes Gesetz vom 18. Dezember 1998 über das liechtensteinische Postwesen Indicator 29.3.1 Method of price regulation (Art. 12*) required? Segment Method Remark Affordability (Art. 12*) de- Yes Gesetz vom 18. Dezember 1998 über das liechtensteinische Postwesen fined in national law? Basic letter post Ex ante Note: Article 12 of Directive 2008/6/EC Bulk letters Source: NRA, Ministry Direct mail Periodicals Non-priority letter post 29.4. ROLE OF NRA Basic parcel post Ex ante Bulk parcels

Source: NRA Indicator 29.4.1: NRA powers Task or power Yes/No Task or power Yes/No Require USP cost allocation system? Yes Levy fines? No Indicator 29.3.2 Accounting requirements No Fines levied since 1.1.2006 regarding data re- Approve USP cost allocation system? No Question Answer Question Answer quirements? Separation of accounts No. of up/down stream accounts N/A Review cost allocation to non-USO? No Seek court order? Possible Did NRA approve product accounts? N/A Special Tariff: 1st year of data to NRA N/A Require data from USP (Art.22*)? Partly Cancel unlawful rates? Yes for the Liechtenstein No. of reserved product accounts N/A Transparency Post AG Unreserved product accounts required? Yes Independent body reviews USP accounts? No Require data from non-USPs (Art.22*) No Set new rates for USP? No No. of unreserved product accounts N/A Last review of USP accounts N/A Require data studies? No Court orders sought since 1.1.2006 regarding None Body reviewing USP accounts (Type of body, N/A data? Application of tariff principles e.g. NRA, USP) Require downstream access? No To bulk services within USO? No NRA issues statement of compliance? N/A Note: *) Under Article 22 of Directive 2008/6/EC Does USP conclude individual agreements? Yes Last publish statement of compliance N/A Source: NRA Individual agreement: cost-based price required? Yes Publish cost allocation system? N/A Individual agreement: NRA has cost data? No USP fiN/Ancial accts audited? N/A USP has special tariffs? N/A Last published fiN/Ancial accounts N/A Indicator 29.4.2: NRA human and financial resources To up- and downstream accounts? N/A Question Answer Source: NRA Size of budget? (€ thousands) Budget of the Department Economy, Government of Liechtenstein Number of total staff ? 1 (Of which, staff dealing with postal affairs) Indicator 29.3.3 Cost accounting system of the USP Source of NRA budget Government of Liechtenstein, Department of Economy Question Answer Who approves NRA budget Parliament What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) N/A Source: NRA Is the cost accounting system approved by the National Regulatory Authority? N/A Assessment of the system (pros and cons) - Note: - means no answers in questionnaire Source: NRA

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Indicator 29.4.3: NRA independence Indicator 29.4.7 Main issues of discussion between NRA and USP Question Yes/No Question Answer Indicator 29.4.8: NRA relations with customer associations Does the government have a formal right The NRA is pres- Who, and under what conditions, can N/A to guide NRA on policies? ently part of the appoint NRA head? Example of relation (Short description in bullet points) government The Office of Trade and Transport has an information service center regarding consumer protection Some NRA decisions require governmen- The NRA is pres- Who, and under what conditions, can N/A Source: NRA tal support? ently part of the dismiss NRA head? government Can government suspend NRA orders? N/A Minimum qualifications for NRA heads N/A 29.5. MARKET STRUCTURE AND COMPETITION Source: NRA

Indicator 29.5.1:Indicator 29.5.2 I Indicator 29.4.4 Complaint handling – appeal from NRA decisions Indicator 29.5.3 Mail market segmentation Question Answer Question Answer Percentage opened to Subject to li- No. of sig- Right of appeal from NRA Appeal against a decision Can appellate body reverse NRA? Yes competition cense / au- Names of significant ensured? of the government Segment nificant thorisation? competitors Under na- competitors To whom is NRA decision Administrative Court Number of NRA decisions reversed? None Actual (Yes/No) appealed? tional law Source: NRA Addressed items Reserved Emerging No area for the letters under 50 gr. Indicator 29.4.5 Enforcement of competition rules by NRA and cooperation with Letters NCA Correspondence Question Yes/No Question Yes/No Direct mail Who is the primary enforcer National courts, (in addition also NRA obliged to share info with NCA? N/A Publications of competition rules? EFTA Surveillance Authority) Unaddressed items 100% Emerging No Note: ‘NCA’ national competition authority. Cross-border out- Reserved Emerging No Source: NRA bound area for the letters under 50 gr. Indicator 29.4.6 Regulation of user protection procedures and remedies Express 100% substantial No Parcels 100% substantial No Question Answer Question Answer Total User protection procedures in postal Yes USP(s) required to issue annual re- Yes or consumer law? port Note: Liechtenstein is a small market with a total ar

Enforcement by NRA or national con- Conciliation procedure NRA issues annual report No sumer protection authority? or Civil procedure inhabitants. However Liechtenstein has an ex-t Applies to non-USP(s) in USO area? Yes Review of operator decision ensured Yes Source:small NRA and medium-sized enterprises (a Applies to non-USO services Yes Agency reviewing operator Courts Remedies by competent national au- No ea of only 160 km2 and a population around 36 000 thority? (maximum fine) remely diverse national economy with numerous Source: NRA round 3 648 enterprises in 2008).

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Indicator 29.5.4: Sum of market shares of 3 main competitors (excl. incumbent) Segment Approximate sum of market shares of 3 main competitors 29.8. SOCIAL AND CONSUMERS ASPECTS Letter post (open area) No information available yet.

Parcels No information available yet. Express No information available yet. No answers were provided Unaddressed items No information available yet.

Source:ource: NRAIndicator 29.5.5: Mergers and acquisitions of incumbent since 2007 29.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 29.5.6: Indicator 29.5.7 Cross border mail No answers were provided Reserved for Main actors (if not re- Terminal dues regu- Volume (outbound) USP? served to incumbent) lated per Art. 13?

No information available yet Yes, but only up to No information available yet. Yes 50g 29.10. QUALITY OF SERVICE DEVELOPMENTS Source: NRA Indicator 29.10.1 Transit time for domestic priority mail, 2009 29.6. STRUCTURE OF MARKET DEMAND D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) No answers were provided 95% 97.3% 99% 100% NA NA NA NA Note: - means no answers in questionnaire 29.7. PRICE PERFORMANCE: Source:: - means no information NRAIndicator 29.10.2: Transit time for cross-border priority mail, 2007 Indicator 29.10.3 Quality of service indicators Indicator 29.7.1 Public tariffs, 2004-2009 (CHF) Indicator Value Segment 2005 2007 2009 Percentage of lost mail No information available yet Single item: 20g tariff letter 0,9 Number of postal outlets (post offices and agencies) and number of letter 12 Postal outlets; Number of letter Single item: 100g priority mail boxes per 10.000 inhabitants. boxes not available Single item: 500g insured and registered The implementation of CEN standards. NA Single item: 1 kg parcel 12,5 Source: NRA Bulk mail: composed of 20g letters Bulk mail: composed of 100g letters Source: USP

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30.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 30.1.1 Country facts Country facts Value Unit Year Population 4.9 Million 2010 Population growth 8.5 Percent 2000-2010

Population density 15 Pop. / km2 2010 Urbanisation rate 77.5 Percent 2008 GDP 200 PPS, billion 2009 GDP/capita 41,500 PPS 2009 Postal services to GDP ’99/09: 1.5%/1.0% Ratio 1998/2008

NRA Norwegian Post and Telecommunication Authority (NPT) NRA responsibilities? USP rates, Special tariffs, USP accounts, Quality of USP, handles complaints from end-users related to compliance with requirements in the postal regulatory framework and licenses, Cross subsidy in US, Cross subsidy non-US Incumbent Posten Norge AS Main activities of incumbent Post (letter mail and parcels), logistics and IT Employment, incumbent 24 163 (FTE, corporate group total) Source of financing Market revenues. State funded USO net cost compensation (2 % of total Chapter 30 NORWAY group revenue in 2009). Source: ITA/WIK (2009) Country fiche, Eurostat, NRA, USP

Indicator 30.1.2 Volume of items delivered by segment in total market, millions Box 30.1 – Country summary of items Norway is a member of EEA. The process of transposition of the 3rd Postal Directive by EEA Segment 2005 2007 2009 countries is subject to a specific procedure envisaged by the EEA agreement. Addressed items 1,726,000 1,681,000 N/A The mail market segments of correspondence and direct mail is reserved area in Norway. Letter 1,011,000 969,000 N.A In cross-border outbound and domestic letters the Norwegian NPO has nearly full market Correspondence N/A N.A N.A share. In unaddressed advertising the Norwegian NPO is experiencing fierce competition, and has smaller market share. Direct,mail N/A N.A N.A Net cost of USO is estimated at 4.2 percent of Norway Post’s turnover of €3.1 billion (alterna- Publications 715,000 712,000 N.A tive strategy approach). Unaddressed items 2,120,000 2,350,000 N/A Norway has had one competition case since 2007. Cross-border outbound 40,000 35,300 N/A The NPO in Norway is required to pay VAT on all products it sells. Express N/A N/A N/A Parcels N/A N/A N/A Total N/A N/A N/A Source: NRA

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Segment 2005 2007 2009 Indicator 30.2.3 VAT treatment of postal services Mail NOK 15 440 000 NOK 19 680 000 N/A Postal product Part of USO? VAT rate Legal basis Express N/A N/A N/A All postal services Yes and no 25% All postal services are subject to ordinary VAT Logistics N/A N/A N/A Source: Ministry Financial N/A N/A N/A Others N/A N/A N/A Total N/A N/A N/A Indicator 30.2.4 Services ensured as universal services under national law Source: NRA Segment Defined as universal service by law? Are quality standards specified by law?* Basic letter post Yes Yes 30.2. REGULATORY FRAMEWORK AND PRACTICES Bulk letters Yes Yes Direct mail N/A N/A Indicator 30.2.1 National regulatory framework Periodicals Yes Yes Question Yes Year of enactment Remarks Non-priority letter s Yes Yes /no Basic parcel post Yes Yes Is postal law enacted? Yes 1997 Bulk parcels No No Is Directive 2008/6 transposed? No No info Note: * USP: Please note: “By law” is assumed to mean Is there a law that defines… secondary regulations and licence granted to Norway Scope of USO? Yes 1997 Quality of USO? No Defined in the licence of 2007 Source:while USP, the NRA, licence Ministry is more spec USO rates? No But the postal law gives the Ministry the right to approve rates on monopoly products Indicator 30.2.5 Mechanisms to ensure provisionthe regulatory of universal framework service as a whole (principal law, USP accounts? No Defined in the licence of 2007 ific on quality standards. Question Answer Reserved area? Yes 1997 Changed to comply with the second postal Post). The principal law directive Describe the role played by the three Post Norway is designated to provide the universal services. Compensa- Authorisation procedures? No mechanisms: market forces, designation tion is given through the state budget after deductions for reserved area and public procurement. Are other safe- profits. Please find enclosed a paper describing the ismodel relatively in further general, de- Universal service fund? No Defined in the licence of 2007 guarding measures present? tail. User protection? no Source: Ministry Source: Ministry

Indicator 30.2.6 Legal mechanisms to ensure quality of universal service Indicator 30.2.2 Regulation of services based on new technologies Mechanism Yes/No Mechanism Yes/No Question Answer NRA sets monitoring standards? Yes NRA can fine USP(s)? Yes Are you aware of the presence of services based on new technolo- Norway Post offer hybrid mail services since Annual measurement of quality of service? Yes NRA can impose other remedies? Yes gies in your market? For example, hybrid mail or virtual delivery the 80-s. Norway Post also offer virtual de- networks? livery Annual publication of results on quality of service Yes monitoring? Do you have plans to regulate such products? For example, confi- We have no current plans to regulate these dentiality of hybrid mail? services in the future. Source: NRA Source: NRA

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Indicator 30.2.7 Financing the net cost of universal service Indicator 30.2.9 Authorisation/licensing for services within and outside universal Mechanism Yes/No Mechanism Yes/No service area Reserved area Yes Who contributes to the compensation N/A Services within universal services If yes, state services Remarks, experiences, problems en- fund? e.g. letter post items, countered Compensation fund No Public procurement No otherwise insert “No” Size of compensa- N/A Direct compensation from public funds USO is financed through the State What licensing procedure is used? Simple registration The answers in 1.2.9 concerns postal option fund (if present, Budget and reserved area profits if erators in general, not including the desig- in Euro) any nated USO operator. Though see last Source: NRA question in 1.2.9. Which universal services are subject to Operators providing ser- Two minor operators with individual li- individual license? vices within the reserved cense and exception from the reserved Indicator 30.2.8 Cost of universal service obligation and method for its calcula- area. area for Norway Post tion Which universal services are subject to None general authorisation? Question Answer Are authorisation requirements pub- - Cost estimate of universal ser- USP: 57 mill Euro (2010-estimate) lished (transparent)? vice (if available, in Euro) Is the USP authorised under Art. 9*? N/A - Name of calculation method USP: “Alternative Commercial Strategy”-model (if available) Services outside universal services Answer Remarks, experiences, problems en- Short description of calcula- USP: Modified Net Avoidable Cost Method; calculates profitability difference be- countered tion method (if available) tween universal service provision compared to Posten Norges’s alternative com- No mercial strategy without USO. For which services is general authorisation required? Is a thorough documentation USP: See paper mentioned above (indicator 1.2.5). A thorough documentation is For which services is an individual li- No of calculation method avail- enclosed with estimated compensation bill when filed to the Ministry. cense required (ex ante approval)? able? Where? Is calculation method ap- USP: Approved by the Ministry of Transport and Communication as responsible Note: - means no answers in questionnaire proved by the NRA? governmental body for the compensation NRA: The part of the calculation that comes from calculating reserved area profit Source:*Article NRA 9 of Directive2008/6/EC shall be approved by the NRA. Does NRA calculate USO cost? NRA: No Source: NRA, USP Indicator 30.2.10 Access to postal infrastructure ensured by Member States Access to: Yes/No Other conditions: Yes/No Post codes No Change of address database No Address database No USP return services No Post office boxes No Street letter boxes No Delivery boxes No Sorting centres No Other conditions: Yes/No Require downstream access to USP No Source: NRA

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Indicator 30.2.11 Involvement in competition cases since 2007 Indicator 30.3.2 Accounting requirements Case name Case Postal product(s) Issue Question Answer Question Answer status concerned Separation of accounts No. of up/down stream accounts - Posten Norge – Privpak Ref. EFTA Finalized Parcels Exclusivity to distribution network Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA - Surveillance Authority, case 34250 (post offices) No. of reserved product accounts 2 Norpost AS vs. Posten Norge AS Closed Unaddressed items Rebates Transparency Note: - means no answers in questionnaire Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes Source: USP No. of unreserved product accounts 6 Last review of USP accounts 2008 Application of tariff principles Body reviewing USP accounts (Type of body) NRA Bulk services within USO? Yes NRA issues statement of compliance? Yes 30.3. REGULATION OF PRICES AND ACCOUNTING Does USP conclude individual agreements? - Last publish statement of compliance 2008 Individual agreement: cost based price re- Yes Publish cost allocation system? Yes quired Indicator 30.3.1 Method of price regulation Individual agreement: NRA has cost data? No USP financial accounts audited? Yes Segment Method Remark USP has special tariffs? Yes Last published financial accounts 2009 Basic letter post Ex ante 1st class mail within reserved area: Decided by the Ministry. Other ba- Up- and downstream accounts? No sic letter post within USO: Price cap (ex-ante, single piece) Note: - means no answers in questionnaire Bulk letters Ex ante Indirect by basic letter post price regulation Source: NRA Direct mail Ex ante Indirect by basic letter post price regulation Periodicals Ex ante Indirect by basic letter post price regulation Indicator 30.3.3 Cost accounting system of the USP Non-priority letter post Ex ante Price cap (basic single letter post) Question Answer Basic parcel post Ex ante Price cap Bulk parcels N/A Only basic parcel post (single piece) are part of the USO. What type of cost accounting system does the USP use? (e.g. LRIC, FAC, LRMC) FAC (using ABC method) Source: NRA Is the cost accounting system approved by the National Regulatory Authority? Yes Assessment of the system (pros and cons) - Note: FAC = fully allocated cost accounting,

Source:- NRA,means USPno answers in questionnaire

Indicator 30.3.4 Promoting access to and affordability of postal services Question Yes/No If yes, how? Non-discriminatory prices (Art. 12*) required? Yes Through licence requirement Affordability (Art. 12*) defined in national law? No A price cap is applied based on licence requirement Note: *Article 12 of Directive 2008/6/EC Source: NRA, Ministry

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30.4. ROLE OF NRA Indicator 30.4.3: NRA independence Question Yes/No Question Answer Does the government have a formal Yes Who, and under what conditions, can Ministry of Trans-port Indicator 30.4.1: NRA powers right to guide NRA on policies? appoint NRA head? and Communications Task or power Yes/No Task or power Yes/No Some NRA decisions require gov- No Who, and under what conditions, can Ministry of Trans-port ernmental support? dismiss NRA head? and Communications, Require USP cost allocation system? Yes Levy fines? Yes** Misconduct ct Yes Fines levied since 1.1.2006 regarding data require- Approve USP cost allocation system? Yes Can government suspend NRA or- Yes Minimum qualifications for NRA No ments? ders? heads Review cost allocation to non-USO? No Seek court order? No Source: NRA Require data from USP (Art.22*)? Yes Cancel unlawful rates? No Require data from non-USPs (Art.22*) Yes Set new rates for USP? Yes*** Require data studies? Yes Court orders sought since 1.1.2006 regarding data? No Indicator 30.4.4 Complaint handling – appeal from NRA decisions Require downstream access? No Question Answer Question Answer Note:*Under Article 22 of Directive 2008/6/EC Right of appeal from Yes Can appellate body Yes NRA ensured? reverse NRA? **: The NRA has the powers to levy a pena To whom is NRA de- Ministry of Transport and Communications In competi- Number of NRA de- 1 cision appealed? tion cases: Ministry of government administration cisions reversed? postal regulatory framework. Ther Source: NRA the past. ***: There are no possibility for the NRA ne lty on a daily basis until the operator complies with the for: the Ministry within the monopolye are no possibilitiesarea for of levying a fine based on no-compliance in Indicator 30.4.5 Enforcement of competition rules by NRA and cooperation with the rates are unlawful, and enforce a change in the NCA will indicate an acceptable interval for the pric Source: NRA Question Yes/No Question Yes/No ither to cancel unlawful rate Who is the primary enforcer of competition rules? NCA NRA obliged to share info with NCA? Yes Indicator 30.4.2: NRA human and financial resources letters). The NRA has the powers to decide that Note: ‘NCA’ national competition authority. Question Answer s nor to set new rates (except Source: NRA Size of budget? (€ thousands) 425 rates using f.i. penaltie es. The operator set the prices based on this Number of total staff ? - (Of which, staff dealing with postal affairs) 3 s. In practice the NRA Indicator 30.4.6 Regulation of user protection procedures and remedies Source of NRA budget Fees collected from the National USP and from postal operators with Question Answer Question Answer a license. User protection procedures in Postal law USP(s) required to issue annual report Yes Who approves NRA budget Parliament postal or consumer law? Note: - means no answers in questionnaire Enforcement by NRA or national NRA NRA issues annual report No consumer protection authority? Source: NRA Applies to non-USP(s) in USO area? No Review of operator decision ensured Yes

Applies to non-USO services No Agency reviewing operator NRA Remedies by competent national Withdraw the li- authority? (maximum fine) cense, coercive fine Source: NRA

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Indicator 30.4.7 Main issues of discussion between NRA and USP Indicator 30.5.3 Mail market segmentation Issue Short description Percentage opened to Subject to li- No. of sig- competition cense / au- Names of significant Mailbox location • Common stand or freestanding mailboxes distance Segment nificant- Under na- thorisation? competitors • Otherwise no main issues of discussion Actual competitors tional law (Yes/No) Addressed items 0

Letters Source: NRA, USP Correspondence Reserved area Direct mail Reserved area Publications Over 20 Indicator 30.4.8: NRA relations with customer associations Unaddressed items Over 20 Example of relation Short description Cross-border out- 5 Tollpost, TNT, Schenker, Ad-hoc basis - bound DHL UPS Source: NRA Express Parcels 4 Tollpost, Schenker, DHL UPS 30.5. MARKET STRUCTURE AND COMPETITION Total See 1.2.9 Source: NRA

Indicator 30.5.1:Information about the incumbent Question Answer Question Answer Indicator 30.5.4: Sum of market shares of 3 main competitors (excl. incumbent) Name of incumbent Posten Norge AS Main activities Post (letter mail and parcels), logistics and IT Segment Approximate sum of market shares* of 3 main competi- Legal status y Limited company Employment 24 163 (FTE, corporate group total) tors State ownership 100% Source of financing Market revenues Letter post (open area) N/A Source: USP Parcels 43 % Express N/A Unaddressed items 47% (Estimated) Indicator 30.5.2 Incumbent profits, 2009, national currency Note: *) Turnover 2007 Statistic Value Source: NRA Total profit in 2009 482 mill Percentage of profit coming from letter mail Not yet available for 2009, 2008: Approx 98 % of total Group regulatory product account result before common Group cost and cost of Indicator 30.5.5 Mergers and acquisitions of incumbent since 2007 capital adjustments Name of ac- Main activities of the Main objectives behind the acquisition Date Percentage of profit coming from reserved Not yet available for 2009, 2008: Approx 37 % of total Group regula- quired company acquired company area (if present) tory product account result before common Group cost and cost of 2007 System AB IT services in Sweden Strengthen position within IT market for SME cli- capital adjustments ents Source: USP 2007 Bekk AS IT Service Norway Strengthen position within IT consulting in Norway 2007 Transflex AB Logistics Sweden Strengthen position with Swedish clients within Note: USO letter mail and serv cross border logistics 2008 Combitrans AS Logistics Sweden Strengthen position with Swedish clients within cross border logistics Source: USP ed area letter mail only

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Indicator 30.5.6 New entrants since 2008 30.6. STRUCTURE OF MARKET DEMAND No. of Approximate End-to-end or Segment entrants market share up/downstream competition? Name Mail 1 N/A End to end Sweden/Denmark Post Indicator 30.6.1 Revenues and volumes generated by consumers vs. business Express 1 N/A End to end Sweden/Denmark Post customers in 2009, national currency, millions of items Logistics 1 N/A End to end Sweden/Denmark Post Segment Business + private Private consumers Approximate mar- Financial N/A N/A customers ket share in the to- Others N/A N/A Revenue Volume Revenue Volume tal market 1) Source: NRA Addressed items (domestic) + Publi- N/A 1145 - - - cations + Cross-border mail outbound Indicator 30.5.7 Cross border mail Letters N/A N/A - - - Main actors (if not re- Terminal dues regu- Correspondence N/A N/A - - - Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Reserved area N/A N/A - - - 37.6 million items per year Inbound only No Direct mail N/A N/A - - - Source: NRA Publications N/A N/A - - - Unaddressed items N/A 1134 - - - Cross-border mail outbound N/A N/A - - -

Indicator 30.5.8 Presence and role of mail consolidators in the market Express - - - - - Question Answer Parcels N/A 35 - - - Are companies offering mail consolidation services present in the market? No statistics available Total N/A 2314 - - - How large is the turnover of mail consolidators in relation to the postal market? No statistics available Note: - means no answers in questionnaire Have you handled any competition cases involving mail consolidator? No Source: USP Source: NRA

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Indicator 30.6.2 Revenues and volumes generated by consumers vs. business Indicator 30.6.4 Effect of the financial crisis on revenues in 2009 customers in 2008, national currency, millions of items Segment Estimate of the effect of the financial crisis on revenues (please write ‘decline’ or ‘increase’ below, where relevant) Segment Business + private customers Private consumers Less than 5% 5-15% more than 15% Revenue Volume Revenue Volume Addressed items (domestic) Decline Addressed items (domestic) 6022 mill 1232 - - Letters Letters N/A N/A Correspondence Correspondence N/A N/A Reserved area Reserved area N/A N/A Direct mail Direct mail N/A N/A Publications Publications 923 mill 270 Unaddressed items Decline Unaddressed items 1016 mill 1321 Cross-border mail outbound Decline Cross-border mail outbound 390 mill. 40 Express Decline Express N/A N/A Parcels Decline Parcels N/A 35 Total Decline Total N/A 2628- - Note: Indicated effects are on volume, not on revenues. Note: - means no answers in questionnaire Source: USP Source: USP

RICE PERFORMANCE Indicator 30.6.3 Trends in mail substitution 30.7. P : Short description (in bullet points) • Since 2000 addressed letter mail volumes have decreased with 29 %, mainly due to substitution to electronic Indicator 30.7.1 Public tariffs, 2004-2009 alternatives and in 2008-2009 also due to the financial crisis. This trend is expected to continue and might even accelerate as the financial crisis has sharpened large customers focus on cost efficiency and electronic Segment 2005 2007 2009 alternatives becoming more and more easily available. There is also a tendency among large customers to Single item: 20g tariff letter 6 6,5 8 change from priority to non priority letter mail, reflecting less preference for over-night delivery and more Single item: 100g priority mail 12 13 15,5 emphasis on punctuality. Single item: 500g insured and registered 134 134 320 Note: - means no information 104 109 130 Source:USP Single item: 1 kg parcel 84 89 115 Bulk mail: composed of 20g letters N/A N/A 3,75 Bulk mail: composed of 100g letters N/A N/A 5.65 Note: Bulk Mail: non-priority, prices ex Source: USP

cl. VAT. Other prices incl. 25 % VAT.

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30.8. SOCIAL AND CONSUMERS ASPECTS Indicator 30.9.2 Statistics on technological progress Indicator Value in 2009 Increase/decline since 2007 (percentage) (in percentage points) Indicator 30.8.1 Employment indicators, 2009 Percentage of letter mail benefiting from 85 (small letters) 5 USP automated processing (e.g. sorting) 72 (all letters) 6 Employment (thousand), in full time equivalents 14105 Percentage of parcels benefiting from 100 N/A Percentage of total country employment automated processing (e.g. sorting) Share of civil servants 0 Source: USP Share of part time and temporary employment - Number of outsourced and/or subcontracted workers in the delivery function in (monthly av- 0 erage for 2009) Indicator 30.9.3 Supply of e-commerce services, total market Note: - means no answers in questionnaire Question Answer - Incumbent Source: USP Do you supply own e-commerce services? What kind? Distribution, Storage, Linehaul, Marketing What share of turnover do you generate from own e-commerce ser- N/A, Trend is increasing Indicator 30.8.2 Wage and productivity indicators vices? What is the trend? Incumbent What own e-commerce services do you plan to develop? More distribution channels, more ad- Wages as a proportion of total costs 53 % (2009) vanced marketing Average wage per hour (social costs not included) (€) 20,5 Are you able to indicate how the percentage of your turnover that N/A Note: - means no answers in questionnaire originates from or is related to third-party e-commerce transactions Source: USP (e.g. purchases on the internet) Source: USP 30.9. TECHNOLOGICAL DEVELOPMENTS Indicator 30.9.4 Supply of hybrid mail services, total market Question Answer - Incumbent Indicator 30.9.1 Innovation, technology and new services Do you supply hybrid mail or virtual delivery solutions? What kind? Yes Service Do you offer? Volume Do you plan to Remarks If yes, how many years have you been supplying these services for? 20 (Yes/No) (million of offer? items) (Yes/No) What share of turnover do you generate from hybrid mail and/or vir- N/A tual delivery solutions? What is the trend? Hybrid mail See indicator - - - Do you plan to develop (new) hybrid mail / virtual delivery solutions? N/A 1.9.4 Source: USP Virtual delivery of mail See indicator - - - 1.9.4 Pick up locations for parcels - Not applicable - - (parcel shops) Other examples - - - - (insert name) Note: - means no answers in questionnaire Source: USP

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Indicator 30.9.5 Developments within networks and mail consolidation services Indicator 30.10.2 Transit time for cross-border priority mail, 2007 Question Answer D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 Have you carried out a major reorganisation Yes dard (% actual dard (% actual dard (% actual dard (% actual of your logistics network? E.g, decentralising, FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) implementing hub & spoke systems? - - - - 85 94.3 - - Do you use different networks for letters and Partly yes, depending on regional/local conditions parcels at collection, sorting, transportation Note: - means no information or delivery levels? What are the reasons? Source: Ecorys (2008a) What is the relative importance of road, rail 2009 trunk transport lines: Road 36 %, railway 49 %, air 15 %. and air as modes of transportation for mail? Railway share has increased over the last few years due to Norway Have these shares changed recently? Why? Posts “green” policy, product mix and cost efficiency reasons. Indicator 30.10.3 Quality of service indicators Source: USP Indicator Value Percentage of lost mail 0,047% (Norway Post) Indicator 30.9.6 The most important environmental initiatives implemented Number of postal outlets (post offices and agencies) and number of let- 50,14 ter boxes per 10.000 inhabitants. Brief answer The implementation of CEN standards. EN 13850 is mandatory for Norway Post. • Replacing road transport with rail transport EN 14012 voluntarily implemented • Replacing air transport with road or rail transport Source: NRA • Testing alternative more environmental friendly vehicles, such as electric mopeds and biofuels • Ecodriving • Environmental awareness, environmental e-learning within the company • Energy efficient programs in our terminals. Source: USP

30.10. QUALITY OF SERVICE DEVELOPMENTS

Indicator 30.10.1 Transit time for domestic priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) 85 87.1 - - 97 99.4 - - Note: - means no answers in questionnaire Source: NRA

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31.1. COUNTRY FACTS AND MAIN SECTORAL INDICATORS

Indicator 31.1.1 Country facts Country facts Value Unit Year Population 7.8 Million 2010 Population growth 8.6 Percent 2000-2010

Population density 188 Pop. / km2 2010 Urbanisation rate 73 Percent 2008 GDP 262 PPS, billion 2009 GDP/capita 33,900 PPS 2009 Postal services to GDP ’99/09: Ratio

NRA Postregulationsbehörde, Autorité de régulation postale, Autorità di regulazione postale (PostReg) NRA responsibilities? According to the Postal Ordinance: Ensures yearly the independent measurement of quality of and access to US, Ensures yearly the independent audit of compliance with accounting rules and prohibition against cross-subsidization, Answers complaints concerning the US, Implements the authorisation regime, Prepares decisions regarding the prices for the Ministry, Evaluates the gradual market opening Incumbent Swiss Post Chapter 31 Main activities of incumbent Communication, logistics, finance, passenger transportation Employment, incumbent Public and privat-law contracts Source of financing Business activities Source: ITA/WIK (2009) Country fiche, Eurostat, USP, NRA SWITZERLAND Box 31.1 – Country summary Indicator 31.1.2 Volume of items delivered by segment in total market, millions The total volume of postal items decreased by approx. 3 percent from 2007 to 2009. The larg- of items est declines were in cross-border outbound (12 percent) and correspondence (9 percent). The Segment 2005 2007 2009 volume of parcels remained steady. Addressed items 4023 3956 3805 Switzerland is not required to transpose the postal directive as the country is not a member of Letters 2822 2742 2556 the EU nor the EEA. However, in 2010 Switzerland planned for opening its market by April Correspondence 1719 1595 1453 2013. Direct mail 1103 1147 1103 The Swiss NPO has 99% of the market share in letter mail, on cross border outbound they Publications 1201 1214 1249 have 46% and on parcels they have 20%. Unaddressed items 1211 1216 1232 The net cost of USO, comprision the burden of post offices, is estimated at 1.6 percent of Swiss Posts’ turnover of €5.8 billion in 2009. Cross-border outbound 192 194 170 No postal competition cases took place in Switzerland since 2007. Express 4 5 3 VAT is due on all postal products in Switzerland (no exemptions are present). Parcels 105 104 104 Total 5535 5475 5314 Source: NRA

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Indicator 31.1.3 Revenues from segments in total market, millions of Euro Indicator 31.2.2 Regulation of services based on new technologies Segment 2005 2007 2009 Question Answer (in bullet points) Mail 2119 2005 1872 Are you aware of the presence of services based on new technologies in Yes, new technologies are in use, but Express N/A N/A N/A your market? For example, hybrid mail or virtual delivery networks? are outside the scope of USO Do you have plans to regulate such products? For example, confidential- No Logistics 912 974 992 ity of hybrid mail? Financial 1019 1291 1440 Source: NRA Others 949 1537 1502 Total 4999 5808 5806 Source: NRA Indicator 31.2.3 VAT treatment of postal services Postal product Part of USO? VAT rate Legal basis All postal prices include VAT since Yes 7.6 % Bundesgesetz vom 12. Juni 2009 über 31.2. REGULATORY FRAMEWORK AND PRACTICES July 1st 2009 die Mehrwertsteuer Source: Indicator 31.2.1 National regulatory framework Question Yes/N Name of law Year of Remarks Indicator 31.2.4 Services ensured as universal services under national law -USP o enactment Segment Defined as universal service by law? Are quality standards specified by law? Is postal law en- Yes Postal Act of 1997 Basic letter post Yes No acted? 30.04.1997, Postal Ordinance of 2003 Bulk letters No* No 26.11.2003 Direct mail No** No Is Directive N/A N/A Switzerland ∉ EU, EEA Periodicals Yes No 2008/6 trans- Non-priority No* No posed? letter s Is there a law that defines… Basic parcel Yes No Scope of USO? Yes Postal Act and post Postal Ordinance Bulk parcels No No Quality of USO? No Quality target is defined by Government/ Min- Note: *Bulk letters and non-priority le istry, NRA defines quality measurement. USO rates? No Prices in the reserved area are approved by the Ministry, which is not considered as a legislative act. ministry. The authority of price surveillance (M. Prix) is consulted before decision. **Direct mail is neither explicitly defined by law no tters are not defined as US by law, USP accounts? Yes Postal Ordinance In addition, the NRA defines rules in a direc- Source:course, NRA, directUSP mail is regarded as tive. Reserved area? Yes Postal Act and Postal Ordinance Indicator 31.2.5 Mechanisms to ensure provision of universal service Authorisation pro- Yes Postal Act and Question Answerbasic letters or bulk mail and butis thus in thepart list of approvedthe universal by the services). cedures? Postal Ordinance r in the list approved by the Ministry (but of Describe the role played by the three The Swiss postal legislation designates Swiss Post to ensure the provision Universal service Yes Postal Act and Has never been applied up to now. mechanisms: market forces, designa- of US. This will most likely not change under the current revision of the fund? Postal Ordinance tion and public procurement. Are Postal Act. The idea of a public procurement was rejected in the Govern- User protection? No other safeguarding measures pre- ment's draft, as there is no other provider to be able to provide USO. Source: NRA, USP sent? Source: NRA

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Indicator 31.2.6 Legal mechanisms to ensure quality of universal service Indicator 31.2.8 Cost of universal service obligation and method for its calcula- Mechanism Yes/No Mechanism Yes/No tion NRA sets monitoring standards? Yes NRA can fine USP(s)? No Question Answer Annual measurement of quality of service? Yes NRA can impose other remedies? Yes What is the cost estimate of 2009: CHF 200m (EUR 139.5m) Annual publication of results on quality of service Yes USO? (if available, in Euro) The published cost of universal service obligation represents only the burden of monitoring? post offices exceeding the optimal network. The cost of all other universal service Source: NRA obligations (e.g. delivery) is not calculated. What is the name of calcula- - tion method? (if available) Indicator 31.2.7 Financing the net cost of universal service Short description of calcula- These costs encompass the avoidable costs based on an hypothetical optimised Mechanism Yes/No Mechanism Yes/No tion method (if available) post office network defined by the NRA. The optimised post office network consists of 700 self-run post offices and 1000 agencies compared to 2065 self-run Reserved area Yes Who contributes to the compensation fund? N/A post offices by Swiss Post and 283 run by Agents on 31 Dec 2009. (Incumbent, competitors, other entities) The postal legislation is currently being amended. Under the new postal legisla- Compensation fund No Public procurement No tion, the net cost of the universal service obligation will be calculated by compar- Size of compensation fund N/A Direct compensation from public funds No ing Swiss Post’s profit with USO and its hypothetical profit without USO. (if present, in Euro)

Source: NRA Is a thorough documentation See http://www.postreg.admin.ch/de/publikationen/Weisung%202010_d.pdf, of calculation method avail- http://www.postreg.admin.ch/de/publikationen/Anhang_DEF1.pdf and able? Where? http://www.postreg.admin.ch/de/publikationen/TB_2008_d.pdf (these documents are unfortunately not available in English) Is calculation method ap- Yes proved by the NRA? Does NRA calculate USO cost? CHF 200m (EUR 139.5m), 2009 Note: - means no answers in questionnaire Source: NRA, USP

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Indicator 31.2.9 Authorisation/licensing for services within and outside universal Indicator 31.2.11 Involvement in competition cases since 2007 service area Case name Case status Postal product(s) con- Issue cerned Services within universal If yes, state services e.g. letter Remarks, experiences, prob- Not involved services post items, otherwise insert “No” lems encountered Source: USP What licensing procedure is Private services providers require an in- if they provide a regular, commercial used? dividual license in order to handle: delivery service and reach a turnover (designation, general authorisa- - addressed parcels up to 20kg; liable to value-added tax of at least tion, individual license) - addressed cross-border mail (letter- CHF 100'000. If the turnover liable to 31.3. REGULATION OF PRICES AND ACCOUNTING post items) outbound value-added tax is under CHF - addressed domestic and cross-border 100'000, private service providers inbound mail (letter-post items) over have only obligation to report. Indicator 31.3.1 Method of price regulation 50g Segment Method Remark Which universal services are sub- see above ject to individual license? Basic letter post Ex ante If ∈ reserved area (i.e. ≤ 50 g) Which universal services are sub- -N/A Bulk letters Ex ante If ∈ reserved area (i.e. ≤ 50 g) ject to general authorisation? Direct mail Ex ante If ∈ reserved area (i.e. ≤ 50 g) Are authorisation requirements Yes www.postreg.admin.ch Periodicals Ex ante published (transparent)? Non-priority letter post Ex ante If ∈ reserved area (i.e. ≤ 50 g) Is the USP authorised under Art. N/A 9*? Basic parcel post N/A Bulk parcels N/A Services outside universal services Answer Source: USP For which services is general authorisation For the services outside universal services ( =competitive services) required? an individual license or a general authorisation ist not required. For which services is an individual license re- - Indicator 31.3.2 Accounting requirements quired (ex ante approval)? Question Answer Question Answer Note: - means no answers in questionnaire Separation of accounts No. of up/down stream accounts N/A Source:*Article NRA 9 of Directive2008/6/EC Did NRA approve product accounts? Yes Special Tariff: 1st year of data to NRA N/A No. of reserved product accounts 1 Transparency Indicator 31.2.10 Access to postal infrastructure ensured by Member States Unreserved product accounts required? Yes Independent body reviews USP accounts? Yes No. of unreserved product accounts 1 Last review of USP accounts 2009 Access to: Yes/No Other conditions: Yes/No Application of tariff principles Body reviewing USP accounts (Type of Auditor Post codes No Change of address database No body, e.g. NRA, USP) To bulk services within USO? Yes Address database No USP return services No Does USP conclude individual agreements? Yes NRA issues statement of compliance? No Post office boxes No Street letter boxes No Individual agreement: cost-based price required? Yes Last publish statement of compliance N/A Delivery boxes No Sorting centres No Individual agreement: NRA has cost data? No Publish cost allocation system? No Other conditions: Yes/No USP has special tariffs? Yes USP financial accts audited? Yes Require downstream access to USP No To up- and downstream accounts? Yes Last published financial accounts 2009 Source: NRA Source: NRA

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Indicator 31.3.3 Cost accounting system of the USP Indicator 31.4.2: NRA human and financial resources Question Answer Question Answer What type of cost account- 1. In general and in terms of prices: Process costing based on FAC Size of budget? (€ thousands) About 1,9 mio CHF (1,3 mio Euro) ing system does the USP 2. Concerning examination of cross-subsidisation: incremental costs (based on his- Number of total staff ? 9 persons = 6.4 full-time equivalents use? (e.g. LRIC, FAC, LRMC) torical costs.http://eur- (Of which, staff dealing with postal affairs) 9 lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:l:2001:125:0027:0044:en:PDF).* Source of NRA budget Ministry Is the cost accounting sys- Yes Who approves NRA budget - tem approved by the Na- Note: - means no answer in questionnaire tional Regulatory Authority? Source: NRA Assessment of the system (pros and cons) Product-oriented cost accounting system, efficient cost allocation, compliance with legal and regulatory require- Indicator 31.4.3: NRA independence ments Question Yes/No Question Answer Note: FAC = fully allocated cost accounting Does the government have a formal right Yes Who, and under what conditions, can Ministry Source: USP, NRA to guide NRA on policies? appoint NRA head? Some NRA decisions require governmen- N/A Who, and under what conditions, can Ministry without Indicator 31.3.4 Promoting access to and affordability of postal services tal support? dismiss NRA head? special conditions Can government suspend NRA orders? N/A Minimum qualifications for NRA heads Yes Question Yes/No If yes, how? Source: NRA Non-discriminatory prices (Art. 12) required? N/A - Affordability (Art. 12) defined in national law? N/A - Note: - means no answers in questionnaire Indicator 31.4.4 Complaint handling – appeal from NRA decisions Source: NRA, Ministry Question Answer Question Answer Right of appeal from NRA ensured? N/A Can appellate body reverse NRA? N/A 31.4. ROLE OF NRA To whom is NRA decision appealed? N/A Number of NRA decisions reversed? N/A Source: NRA

Indicator 31.4.1: NRA powers Task or power Yes/No Task or power Yes/No Indicator 31.4.5 Enforcement of competition rules by NRA and cooperation with Require USP cost allocation system? Yes Levy fines? No NCA Question Yes/No Question Yes/No Approve USP cost allocation system? No Fines levied since 1.1.2006 regarding data require- N/A ments? Who is the primary enforcer of competition NCA NRA obliged to share info with NCA? No formal Review cost allocation to non-USO? No Seek court order? No rules? obligation Require data from USP (Art. 22*)? Yes Cancel unlawful rates? No Note: ‘NCA’ national competition authority. Require data from non-USPs (Art. 22*)? Yes Set new rates for USP? No Source: NRA Require data studies? Yes Court orders sought since 1.1.2006 regarding data? N/A Require downstream access? N/A Note: *) Under Article 22 of Directive 2008/6/EC, Source: NRA

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Indicator 31.4.6 Regulation of user protection procedures and remedies 31.5. MARKET STRUCTURE AND COMPETITION Question Answer Question Answer User protection procedures in postal No special pro- USP(s) required to issue annual re- N/A or consumer law? visions. port Indicator 31.5.1:Information about the incumbent

Enforcement by NRA or national con- N/A NRA issues annual report N/A Question Answer Question Answer sumer protection authority? Name of incumbent Swiss Post Main activities Communication, logistics, fi- Applies to non-USP(s) in USO area? N/A Review of operator decision ensured Yes (based on nance, passenger transportation general civil law) Legal status State-owned enterprise Employment Public and privat-law contracts Applies to non-USO services N/A Agency reviewing operator N/A State ownership (percent) 100% Source of financing Business activities Remedies by competent national au- N/A Source: USP thority? (maximum fine)

Source: NRA Indicator 31.5.2 Incumbent profits, 2009, national currency Statistic Value Indicator 31.4.7 Main issues of discussion between NRA and USP Total profit in 2009 MCHF 728 Issue (Short description in bullet points) Percentage of profit coming from letter mail 27.2% USP: Percentage of profit coming from reserved area (if present) - • Quality control of universal services Note: - means no answers in questionnaire • Revision of basic principles of cost accounting and cross-subsidisation • Handling of complaints concerning regulatory law of universal service Source: USP • Prearrangement of price decrees for the attention of the federal department • Evaluation of gradual market opening NRA: Indicator 31.5.3 Mail market segmentation • Accounting rules Percentage opened Subject to No. of sig- • Cross-subsidization to competition license / Names of significant com- Concept for quality measurement Segment nificant • authorisa- petitors • Price approval Under na- competitors Actual tion? • Various questions about uso (postal services, access to services, delivery...) tional law Source: USP, NRA Addressed items Yes - http://www.postreg.admin.ch/d e/dienstleistungen_konzessiona ere.htm Letters 24% <1% Yes - Indicator 31.4.8: NRA relations with customer associations Correspondence Yes Example of relation (Short description in bullet points) Direct mail Yes No relations to customer organisations Publications No Source: NRA Unaddressed items 100% No N/A Cross-border outbound 100% 46% Yes < 5 Express 100% N/A No N/A. Parcels 100% 20% Yes (<20kg) < 10

Total Source: NRA

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Indicator 31.5.4: Sum of market shares of 3 main competitors (excl. incumbent) Indicator 31.5.6 New entrants since 2008 Segment Approximate sum of market shares of 3 main competitors Segment No. of Approximate market End-to-end or up/downstream Name entrants share competition? Letter post (open area) 0.01% Mail 1 N/A End to end Quickmail Parcels 20% (< 20kg) Express N/A Express N/A Logistics N/A Unaddressed items N/A Financial N/A Source: NRA Others N/A Source: NRA

Indicator 31.5.5 Mergers and acquisitions of incumbent since 2007 Name of acquired com- Main activities of the acquired com- Main objectives Indicator 31.5.7 Cross border mail Date pany pany behind the ac- Main actors (if not re- Terminal dues regu- quisition Volume (outbound) Reserved for USP? served to incumbent) lated per Art. 13? Jan 2007 FM Verzollungs AG Handles import and export custos clear- Strategic. ance for cross-border shipments of goods 170 M items No on behalf of forwarding companies and Source: NRA operates public customs warehouses. Aug 2007 Highnes Group Overnight logistics. Strategic. Jan 2008 IMS Europe AB Letter mail handler. Strategic. Indicator 31.5.8 Presence and role of mail consolidators in the market Apr 2008 Graphic Data Ltd. Document digitisation and archiving. Strategic. Question Answer Jul 2008 Prevag Presse Vertriebs AG Early delivery services. Strategic. Are companies offering mail consolidation services present in the market? N/A Jul 2008 Global Business Services Plus Digitises documents, processes and elec- Strategic. How large is the turnover of mail consolidators in relation to the postal market? N/A tronically archives the digital documents. Have you received any complaints concerning the activities of mail consolidators? N/A Jul 2008 Global Press Distribution Provides services for the national and in- Strategic. Have you handled any competition cases involving mail consolidator? No GmbH ternational distribution of magazines. Sep 2008 ANZA Security GmbH Provides services for the transportation of Strategic. Source: NRA valuables and cash processing. Oct 2008 Fleetconsulting AG Fleet optimisation and car policies. Strategic. Apr 2009 Dispodrom AG Logistics company for visual and audio Strategic. 31.6. STRUCTURE OF MARKET DEMAND media. Jul 2009 IT Service-House AG Repair management and similar customer Strategic. services for PC and printer manufacturers. Nov 2009 ZUVO Zustell- und Vertriebs- Early delivery services. Strategic. No answers were provided organisation AG Nov 2009 Espace Media Vertriebs AG Early delivery services. Strategic. Nov 2009 Pressevertriebs GmbH Early delivery services. Strategic. Dec 2009 Microgen UK Ltd Billing services. Strategic. Source: USP

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31.7. PRICE PERFORMANCE: 31.9. TECHNOLOGICAL DEVELOPMENTS

Indicator 31.7.1 Public tariffs, 2004-2009 Indicator 31.9.1 Innovation, technology and new services Segment 2005 2007 2009 Service Do you of- Volume (million of Do you plan fer? items) to offer? Single item: 20g tariff letter CHF 0.85 CHF 0.85 CHF 0.85 Single item: 100g priority mail CHF 1.00 CHF 1.00 CHF 1.00 Hybrid mail Yes - - Single item: 500g insured and registered CHF 8.00 CHF 8.00 CHF 5.00 Virtual delivery of mail Yes - - Single item: 1 kg parcel CHF 6.00 economy CHF 6.00 economy CHF 6.00 economy Pick up locations for parcels (parcel shops) Yes Not applicable - CHF 8.00 priority CHF 8.00 priority CHF 8.00 priority Note: - means no answers in questionnaire Bulk mail: composed of 20g letters - Source: USP Bulk mail: composed of 100g letters - Note: - means no answers in questionnaire Source: USP Indicator 31.9.2 Statistics on technological progress Indicator Value in Increase/decline 2009 since 2007

Percentage of letter mail benefiting from automated processing (e.g. sorting) 85% + 6% 31.8. SOCIAL AND CONSUMERS ASPECTS Percentage of parcels benefiting from automated processing (e.g. sorting) 84% + 0% Source: USP Indicator 31.8.1 Employment indicators, 2009 USP Indicator 31.9.3 Supply of e-commerce services, total market Employment (thousand), in full time equivalents 44,8 FTE Question Answer - Incumbent Percentage of total country employment Do you supply own e-commerce services? What kind? Yes: Fullservice Provider E-Commerce (Internet, Mo- Share of civil servants 66.5% (CEC Swiss Post (Public Official Act)) bile, E-Mail, Offline, E-Shop, Call Center, Billing, Pay- Share of part time and temporary employment 43,8% (in Switzerland) ment, Warehousing, Distribution, After Sales Mgmt, Returns Mgmt, Customer Care Center) Number of outsourced and/or subcontracted workers in the de- - livery function in (monthly average for 2009) What share of turnover do you generate from own e- - commerce services? What is the trend? Note: - means no information What own e-commerce services do you plan to develop? Mobile commerce Source: USP, UNI Europa Are you able to indicate how the percentage of your turn- 10% over that originates from or is related to third-party e- commerce transactions (e.g. purchases on the internet) Indicator 31.8.2 Wage and productivity indicators Source: USP Incumbent Main competitor Wages as a proportion of total costs 50,47% Average wage per hour (€) CHF 38,82 Source: USP

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Indicator 31.9.4 Supply of hybrid mail services, total market Indicator 31.9.6 The most important environmental initiatives implemented Question Answer - Incumbent Brief answer (in bullet points) Do you supply hybrid mail or virtual delivery solutions? Document Output: http://www.post.ch/en/post- • Reduced our climate footprint by 17% since 2000 (19% since 1998). In comparison with 2007, CO2 emissions What kind? startseite/post-geschaeftskunden/post-dokumente- fell by 8.1% to 255,000T. We have exceeded our target (10% reduction on 2000 levels). und-dialog-loesungen/post-document-output.htm, • Uses 28 double-decker trucks. Swiss Post Box: www.swisspostbox.com • Over 4% of vehicle fleet currently uses alternative drive technologies. This includes 140 gas-powered delivery If yes, how many years have you been supplying these Document Output since 2004 vans (since 2009) and some gas-powered Postbuses. In addition we use 500 electric scooters. services for? Swiss Post Box since 2009 • Customers can offset the CO2 emissions of their mailings by means of a “pro clima” surcharge. What share of turnover do you generate from hybrid mail Trend: increasing and/or virtual delivery solutions? What is the trend? • PostBus covers 80% of the kms with vehicles fitted with soot particle filters. Do you plan to develop (new) hybrid mail / virtual delivery - • Have met all of electricity requirements from renewable sources (hydroelectric) sin 2008. solutions? • Since 2002, the energy efficiency of ten of the buildings with a high energy consumption has been optimized. Note: - means no answers in questionnaire • The consumption of heat fell by 25%, electricity by 7% and water by 10%. Source: USP • Have been using Dispoboxes for shipping goods (reusable, waterproof plastic). • Uses FSC-certified printer and copier paper, and envelopes with at least 34% recycled paper. • Energy efficiency was improved by 16.7% in 2009. Indicator 31.9.5 Developments within networks and mail consolidation services Swiss Post joined the WWF Climate Group at the beginning of 2009. Question Answer Note: - means no information Have you carried out a major reorganisation of 2009: automatic letter sorting centres Source: USP your logistics network? For example, decentralising, implementing hub & spoke systems? Do you use different networks for letters and Collection: no 31.10. QUALITY OF SERVICE DEVELOPMENTS parcels at collection, sorting, transportation or Sorting: yes delivery levels? What are the reasons? Transportation: within densely populated areas yes Delivery: within densely populated areas yes Indicator 31.10.1 Transit time for domestic priority mail, 2009 What is the relative importance of road, rail and Delivery: road air as modes of transportation for mail? Have Transports between sorting centres: rail D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 these shares changed recently? Why? No airmail within Switzerland dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) Source: USP 97% 97.7% - - 97% 98.4% - - Note: - means no answers in questionnaire Source: NRA

Indicator 31.10.2 Transit time for cross-border priority mail, 2009 D+1 stan- D+1 D+2 stan- D+2 D+3 stan- D+3 D+4 stan- D+4 dard (% actual dard (% actual dard (% actual dard (% actual FSC) (% FSC) FSC) (% FSC) FSC) (% FSC) FSC) (% FSC)

Note: - means no information Source: Ecorys (2008a)

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Indicator 31.10.3 Quality of service indicators Indicator Value Percentage of lost mail Only available for NRA Number of postal outlets (post offices and agencies) and number of letter boxes Postal outlets per 10’000 = 3.0 per 10.000 inhabitants. Letter boxes per 10’000 = 23.8 The implementation of CEN standards. EN 13850 Source: NRA

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