Country sheet: Ireland

Country sheet: Ireland 461

Country sheet: Ireland

1.1 Summary

Mail market characteristics

(i) Developments in the Irish postal market are influenced by significant growth of Ireland’s

economy over the last few years contributing to mail generation (it is expected that economic

growth may slow down the coming years);

(ii) A relatively low population density;

(iii) The absence of a national postal code system covering all households in Ireland (an

elementary one exists for Dublin);

(iv) A rather critical opinion of customers about the price/quality ratio that the national postal

operator An Post is currently able to offer;

(v) A VAT exemption of An Post for most of its services.

Regulatory developments

• The reserved area has been reduced in line with the Postal Directives. Apart from

domestic mail weighing less than 50g, inbound cross-border mail and direct mail is

part of the reserved area. Regulation within the postal sector in Ireland appears “light

touch” when compared to some other Member States. Although ComReg has said

they are “pro competition” and with market entry requirements relatively minimal, it

is highly unlikely that the reserved area will be reduced in advance of 2011.

• In the last two years, the main areas of regulatory activity by the NRA (ComReg)

have been in relation to accounting and price control and in preparing for the opening

of postal markets to competition.

• In December 2006 ComReg issued a new and revised accounting Direction to An

Post following a consultancy study and public consultation. During 2006 ComReg

defended legal proceedings challenging its decision not to concur with an increase to

60c for reserved stamped letters. In March 2007, following undertakings by An Post

to review all its prices once accounts in compliance with the new accounting

Direction were available, ComReg concurred with a smaller increase (to 55c), while

the price of non-reserved letters was reduced to the same level.

Market developments

• Related to the reserved area of 50g on the majority of letter mail, there has been little

or no further development in terms of competition in the addressed mail market.

There are two competitors operating an end-to-end delivery service. DX operates

within a niche market of B2B and document exchange nationwide, while DEPS

provides a service similar to registered post in major urban areas. A larger number of

Annex II: Main Developments in the Postal Sector (2006-2008) 462

competitors provide parcel, express and courier type services. Both GLS and DHL

operate a network of parcel shops for private consumers and small businesses wishing

to send parcels and express items respectively. The main issues for competitors are

the VAT exemption of the NPO and the lack of postcodes and a Postcode Address

File.

• It has not been possible to fully gauge the size of the total market in terms of value,

however, the NPO reports in its 2006 Financial Accounts revenues of € 594.3m for its

mail services. A relatively small percentage of this will be attributable to parcels and

unaddressed items, and therefore it may be estimated than in 2006 the addressed letter

market was worth in the region of € 570m.

• ECORYS (2005) reported that the total postal market in volume terms was estimated

to be in excess of 1008m items. Given that NPO has been reporting continued growth

in the letter market, and that it would appear the express and parcel market are still

growing, it may be estimated that the market, in volume terms may now be in the

region of 1050m items (assuming a modest overall growth of 2% per annum).

Other issues

• During 2006 An Post completed an automation programme, enabling it to sort mail to

route level. An Post has stated that a project, which will commence shortly, will

improve the automatic read capability of the sorting machines.

• Qualitative research by Millward Brown IMS did not provide any conclusive

evidence in terms of links between e-commerce and postal services, however implicit

in the findings is that e-commerce appears to be driving up the use of postal service,

particularly in the packet/parcel format. This is to a degree borne out by An Post and

others introducing new services to meet this need.

• An Post is one of the larger companies within Ireland, and as such employs a

significant number of people across its retail and mail businesses. In addition further

employment opportunities are generated through its sub contractors and agents. It

appears that there is a move away from full time to part time employees and a

reduced dependency on temporary staff.

• In 2006 the NPO employed, in total, over 9,500 employees. Other postal operators,

across the full spectrum, are known to employ in the region of 1,000 (either directly

or indirectly) people, which can probably be at least doubled to account for those

companies where no data were available.

• Union strength is still considerable within the NPO but not evident in the majority of

other postal operators. The Communication Workers Union represents employees of

UPS and DPD (formerly Interlink) within Ireland.

Discussion points

• Three issues provide evidence for a need for discussion on the scope of the Irish

universal service, namely (i) the current disagreement between An Post and ComReg

on the scope of the universal service and (ii) the calculation of terminal dues as well

as (iii) the gap between the quality of service standards and performance. Moreover,


the situation supports ECORYS’ general recommendation of a (more) uniform

definition of the USO.

• In nearly all European Member States, there are no issues regarding access to the

postal code system. In Ireland, however, there is no nationwide postal code system,

let alone access to it. ECORYS agrees with the many customers and CPOs in Ireland

who have stressed the importance of developing a postal code system, but does not

have an opinion about who should bear the costs.

Summary information on market developments:

Postal market segment / aspect Competition (market shares) Main competitors / remarks

Express Competitive DHL, UPS TNT, Fedex, Nightline

Parcel (main players) Competitive GLS, DHL, TNT, DPD (La Poste –

FR), Nightline

Unaddressed Competitive Door to Door Distributors, The

Leaflet Company, Publicity Mailing

Cross-border mail NPO > 75% Spring, TNT and DHL Global

Addressed mail (market share CPOs)* < 1% DX, DEPS

Population density (inhabitants/km2) 60

Total addressed mail market (items) 0.8 billion items

Addressed mail volume per capita 190

Status of NPO State owned company

Main divisions of NPO National Postal Service,

Post Offices (agency remittance

and other services),

Other Services

Note: * The market share of CPOs refers to the combined market share of CPOs in domestic addressed mail

delivery, excluding newspaper delivery. All figures refer to 2006.

Summary information on the implementation of the Postal Directive:

Aspect Implementation and remarks

Universal service and its

financing

The USO is in excess of minimum requirements. There is currently no provision for

financing. The last published results (2004) showed a loss because of the low

compensation received for inbound international mail.

Reserved area Reduced to 50g in 2006 and includes bulk (transactional and direct) mail.

Outbound cross-border mail was fully liberalised in 2004. There is unlikely to be

any further liberalisation before 1 January 2011.

Licensing and network

access

Within Ireland there are in fact no licensing requirements, however, all postal

service providers other than An Post with an annual turnover of more than

€500,000, excluding VAT, must obtain a postal service authorisation from the NRA

ComReg. Holders of the authorisation have to give ComReg a written declaration

that the postal services provided by the applicant do not infringe the reserved area.

No requests have been made for access, except by universal service providers

from other countries for mail originating in other jurisdictions (primarily Britain).

Access prices are subject to EC tariff principles and refusal to supply would be an


Aspect Implementation and remarks

abuse of a dominant position under Competition Law.

Tariff principles and

transparency of accounts

There is ex-ante control on reserved services and ex-post enforcement of

compliance with tariff principles for non-reserved services for the NPO. NPO

regulatory accounts are not published, but provided to the NRA. Public

consultations are taken on pricing matters.

Quality of services Targets of 94% next day delivery and 99.5% delivery within three days of posting

have been set and published for An Post’s single piece mail items in Ireland. Other

targets are in line with EC requirements. CEN standards are applied.

Cross-border targets were exceeded in 2007. National targets have not been met

There is a significant shortfall (77% D+1 in 2007) although year on year

performance has been improving.

The national regulatory

authority

The NRA is ComReg (Commission for Communications Regulation). Its main

powers are ensuring compliance by An Post (NPO) with its obligations in respect to

the universal service (access points, collection and delivery, pricing, quality,

information, complaints) and authorisation of other operators. There are five full-

time dedicated staff, but about 7-8 FTE when considering ad hoc resource

employed.

1.2 General information

Although Ireland’s economy has experienced significant growth over the last few years, a

significant element of this has been due to the contribution to GDP of the construction

sector, which appears to be now experiencing a downturn and may threaten future

growth.

Ireland is a country of contrasts. The five main urban centres (Greater Dublin, Cork,

Limerick, Galway and Waterford) account for almost 44% of the population. On the other

hand 39.3% of the population live in towns with less than 1,500 inhabitants, or in rural

areas. Overall population density is relatively low, circa 60 per sq km.1 Density in Dublin

city & county is ca. 1,290 per km2. This compares unfavourably with London (4,697),

Amsterdam (4,502) Paris (20,238) Milan (7,190), Athens (20,235), Zurich (3,855), Berlin

(3,801) or Stockholm (3,977).2 Growth in new household formation has been significant

with the number of delivery points increasing from 1.765 million in 2004 to 1.998 million

in 2006. Such a demographic picture has obvious bearings on the cost of delivering to

100% of the population and the future potential for full end-to-end competition to

develop.

The following table presents a number of key characteristics.

1 Central Statistics Office Census 2006.

2 ComReg.


Table 0.1 General country information (2007)

Ireland

Population (in million) 4.2*

Size of the country (1,000 km2) 70.3*

Population density (inhabitants/km2) 60.1*

Degree of urbanisation 60.5**

Number (and percentage) of inhabitants 5 largest cities 1.9 million (43.7%)***

Sources: * UPU (2006), ** UN (2005), *** Central Statistics Office Census 2006.

1.3 Regulatory developments

The main postal acts of Ireland are the Postal and Telecommunications Services Act,

1983, which established An Post as a government, owned company with responsibility of

providing postal services, and the Post Office Act, 1908 which sets out the basic rules and

enforcement procedures in relation to the integrity of mail, including definitions of mail,

mail bag, post office, post office letter box, postal packet (sic, i.e. postal item), in the

course of transmission by post and delivery to or from a post office.

The Communications Regulation Act, 2002 established ComReg as NRA for the postal

sector in Ireland; it sets out functions and statutory objectives. It also empowers ComReg

to recover its expenses by way of a levy.

Since January 2006 Postal Regulation has allowed for3:

• Liberalisation of items of ordinary correspondence with weight limit of > 50 gr. and

pricing of 2.5 times the public tariff in first weight step of fastest standard category;

• Direct and addressed bulk mail is liberalised above 50 gr. for a single item;

• Incoming cross-border mail is liberalised above 50 gr.;

• Magazines and Catalogues are liberalised;

• Upstream postal activities are allowed as for:

o Collection of postal items;

o Pre-sorting of postal items;

o Transformation of electronic mail in physical mail (hybrid mail).

The main areas of Regulatory activity by the NRA (ComReg) and Legislation since the

2006 WIK report has been in relation to accounting and price control and in preparing for

the opening of postal markets to competition.

In December 2006 ComReg issued a new and revised accounting Direction to An Post

following a consultancy study and public consultation. During 2006 ComReg defended

legal proceedings challenging its decision NOT to concur with an increase to 60c for

reserved stamped letters. In March 2007, following undertakings by An Post to review all

its prices once accounts in compliance with the new accounting Direction were available,

3 ComReg Website.


ComReg concurred with a smaller increase (to 55c), while the price of non-reserved

letters was reduced to the same level.

The theme of ComReg’s National Conference in October 2007 was “Postal Services for

the 21st Century”. In preparation for the conference ComReg commissioned a report from

LECG Ltd entitled “Ensuring that consumers benefit from the opening of postal markets

to competition”. In addition to a presentation by the consultants the conference was

addressed by the Minister, the CEO of An Post and industry leaders from Britain, Sweden

and America.

Subsequently, and following public consultation, ComReg published its strategy

statement for the period 2008-2010.

Other areas of work include quality of service monitoring in accordance with CEN

Standard EN:13850, annual market research reports on the views of business and

residential customers, a new direction to ensure that the access points for bulk mail meet

the needs of users and revised guidelines for complaints and dispute resolution

procedures.

The following table presents the key legislative and regulatory instruments.

Table 0.2 Postal law and regulation

Postal law and

regulation

Date of

introduction

Date of latest

amendment

Remarks

Primary Legislation

Postal and

Telecommunications

Services Act, 1983

1983

2002 Act, which established An Post as

government, owned company with

responsibility of providing postal

services.

Communications

Regulation Act, 2002

2002 2007 Established ComReg as NRA for

postal sector in Ireland; sets out

functions and statutory objective.

Empowers ComReg to recover its

expenses by way of a levy.

Interpretation Act, 2005 2005

Stamp Duties

Consolidation Act, 1999

1999 Contains rules etc relating inter alia to

forgery etc of postage stamps and

requires anyone selling postage

stamps to be authorised by An Post.

Post Office (Evasion of

Postage) Act, 1937

1937 1983 Act to prevent ABA (mail for delivery

in a country shipped to another

country from that country for posting)

remail


Postal law and

regulation

Date of

introduction

Date of latest

amendment

Remarks

Post Office Act, 1908 1908 2000 Act which sets out basic rules and

enforcement procedures in relation to

the integrity of mail, including

definitions of mail, mail bag, post

office, post office letter box, postal

packet (sic, i.e. postal item), in the

course of transmission by post and

delivery to or from a post office. .

Post Office (Parcels) Act,

1882

1882 1983 Provision of parcels services. Only §

1 and 14 still on statute book.

Secondary Legislation

No. 202/1939: The Inland

Post Warrant, 1939. (as

amended)

1939 2007 Terms and conditions (and prices) for

postal services. Updated many times

Warrants / Schemes also exist for

Foreign Post and Parcels

Communications

Regulation Act 2002

(Section 30) Postal Levy

Order 2005

2005 Rules relating to the Levy payable to

the NRA by all postal service

providers.

S.I. No. S.I. 616 of

2002/2002: European

Communities (Postal

Services) Regulations

2002

2002 Regulations transposing the first and

second Postal Directives into Irish

Law.

NRA DECISIONs BINDING ON UNIVERSAL SERVICE PROVIDERS (or other operators)

03/50 Postal Services -

Universal Service

Obligation, Tariff

Principles and

miscellaneous issues

Directions to An Post

under the European

Communities (Postal

Services) Regulations

2002, S.I. No. 616 of 2002

2003 2007 ComReg’s direction re access points

(general).

Also covers Consumer Information

about universal service.

07/06 Regulation of

Postal Services –

Universal Service

Obligation - Bulk Mail

Access

2007 ComReg’s direction re access points

(bulk mail).

07/105 Complaints and

Dispute Resolution

Guidelines for Postal

Service Providers who

provide postal services

within the scope of the

universal service

Guidelines

2007 Complaints procedures.


Postal law and

regulation

Date of

introduction

Date of latest

amendment

Remarks

06/63 Regulation of

Universal Postal Services

– Accounting Separation

& Costing Methodology

Accounting Direction to

An Post

2006 Accounting requirements for

Universal Service Provider(s)

03/139r Regulation of

Postal Services – Postal

Service Authorisations,

Reserved Area Controls &

Levy Procedures

2003 Authorisation procedures, for postal

operators.

04/56 Quality of Service

Target 2004Single Piece

Priority Mail

2004 Quality of service target.

02/15 Application by An

Post to increase the price

of reserved Postal

Services (Consultation

Paper) and 02/32

Application by An Post to

increase the price of

reserved Postal Services

(response to consultation)

2002 Pricing – issues taken into account

(section 3 of consultation and

response)

Source: ECORYS Questionnaire to ComReg.

Note: NRA decisions listed only relate to obligations on the universal (and other) service providers.

Implementation and Enforcement issues are excluded, as are decisions that have been replaced by subsequent

decisions.

Most European Directives are transposed into Irish Law by way of secondary legislation -

Ministerial Regulations issued under the European Communities Act, 1972 which have

statutory effect. Previous Directives have been dealt with in this way (see Table 1.2).

There are a number of statutory limitations as to what can be done when transposing

directives in this way – only such incidental, supplementary and consequential provisions

as appear to be necessary for the purposes of the regulations may be included.

The Irish Government has recently published a White Paper on Better Regulation,4 which

will contribute “to better Government by ensuring that new regulations – Acts and

Statutory Instruments (Orders) – are more rigorously assessed in terms of their impacts,

more accessible to all and better understood. Existing regulations will be streamlined and

revised, where possible, through a process of systematic review and by repealing,

restating and consolidating them as appropriate. This White Paper will also contribute to

4 “Regulating Better – A Government White Paper setting out six principles of Better Regulation”

(http://www.betterregulation.ie/index.asp).


better regulatory processes and institutions, including a more consistent approach to the

establishment and design of independent sectoral regulatory authorities.”

The Department of Communications, Energy and Natural Resources (DCENR) is

undertaking a public consultation before the transposition of the 3rd

Directive into Irish

law and may be required to undertake a Regulatory Impact Assessment.

ComReg’s Postal Strategy Statement (2008-2010) observes that:

“The Post Office Act 1908 is still the seminal piece of legislation in relation to An Post’s responsibilities

to the sender and the addressee. Additionally, there are some 19th Century laws on the statute book,

and since the foundation of the State there are many hundreds of Acts and Statutory Instruments that

mandate the use of particular postal services, and particularly registered post. All will have to be

reviewed, and amended or repealed as necessary.”

The NPO is of the opinion that primary legislation would be the most appropriate vehicle

for dealing with the future liberalisation of the postal market.

1.3.1 Universal Service Obligation

The NPO (An Post) must provide a universal service to everyone and every organisation

in the Republic of Ireland. This involves at least one collection and one delivery five days

a week of postal items weighing up to 2 kilogram’s and postal packages weighing up to

20 kilogram’s. In addition the following services are required, services for registered

items, services for insured items, with compensation of up to €4,600 for items lost or

delayed; and support services, including: Redirecting post, sending books abroad,

minding post (Mailminder), Business reply / Freepost, Private boxes or bags, issuing free

certificates of posting and providing free postal service for blind or partially sighted

people

Some 0.02% of delivery points only receive deliveries on 4 or fewer days per week. The

NPO can seek derogation in other cases but has not done so.

In 2005, ComReg undertook a consultation in order to establish a working definition of

the USO. The main considerations of ComReg’s decisions were taken in the context of

importance to customers and level of competition in the market. To this end, the bulk

mail services provided by An Post were also included in the USO definition. International

bulk mail was also included as the NRA felt that, due to the VAT advantage of the NPO,

the latter was the de-facto only supplier of these services.

ComReg’s Postal Strategy Statement (2008-2010) includes the high level goal “To

facilitate innovation by new and existing operators to ensure that the universal service

provided to Irish consumers evolves in response of the technical, economic and social

environment and to the needs of users and therefore have access to leading edge postal

services”


The scope of universal service is, in ComReg’s view, one of the key decisions that has to

be made when transposing the 2008 Postal Directive because:5

a. It defines the services to be regulated;

b. It defines which operators may be regulated;

c. It defines who may be required to contribute to ComReg’s running costs;

d. It influences the net cost of the universal service obligation;

e. It defines which operators may be required to contribute to a

compensation fund to finance universal service provision (if one needs to

be established).

Best practice requires that the definition needs to be provided in the legislation to provide

certainty and transparency to all stakeholders in the sector.

The NPO, however, is of the opinion that the scope of the USO should be reviewed6,

particularly with regards to excluding bulk (high volume business) mail, the extent of the

uniform tariff (although there is no obligation in respect of uniform tariffs in Ireland)7 and

the obligation to deliver to the door of all customers. In 2005 An Post advocated a

minimalist approach to the USO scope in its response to ComReg’s consultation on a

working definition of the USO and the EC’s online consultation.

Within Ireland the explicit provision of Counter Services by the NPO is outside the

definition of the USO requirements, although posting boxes are. However, the NRA made

the following direction in its document Postal Services - Universal Service Obligation,

Tariff Principles and miscellaneous issues Decision number D11/03 13th May 2003.

There should be a facility to buy postage stamps, appropriate to the rates for mail in

standard envelopes, at a retail outlet in the vicinity of every pillar / wall box in town

areas. In this context vicinity can be defined as within 100 metres of the nearest retail

outlet, which need not be a post-office and may be automated. Existing arrangements

whereby postmen in rural areas sell stamps should be retained.

Cost of the USO

In terms of the “cost of the USO”, the NPO was required to prepare an annual report

estimating the cost of complying with the Universal Service Obligations, but has never

done so. The NRA has therefore restated its requirement in the revised accounting

Direction published in December 2006 to require that “the financial records and

accounting information shall be maintained in sufficient detail to facilitate a detailed

analysis, on a geographic and/or category of customer and/or payment method basis, for

the purpose of calculating the cost of complying with the Universal Service Obligation,

and ensuring that tariffs comply with the Tariff Principles.”

However, the NPO has stated that they are developing an economic definition of the net

cost of the USO. The NPO does not currently receive any form of external funding

towards the cost of the USO.

5 Source – ECORYS questionnaire to ComReg.

6 ECORYS questionnaire to An Post.

7 ECORYS questionnaire to ComReg.


1.3.2 Reserved area

The reserved area in Ireland consists of national and incoming international addressed

mail weighing 50g or less, providing the price is less than €1,375. See Table 1.3

As can be seen from the following table, changes to the reserved area have only been

impacted upon by the transposition of the 2nd

Directive into law. Outbound cross-border

mail was already liberalised in January 2004

Table 0.3 Liberalisation of postal services and the reserved area (2008)

Postal product Within reserved area

(Yes, no, partially or unclear)

Remarks

Bulk mail and consolidation Yes 50 g or less

B2B non-bulk mail Yes 50 g or less

Individual item mail Yes 50 g or less

Cross-border mail Partially 50 g or less; inbound only

Unaddressed mail No

Parcel mail No

Express mail No


Plans for next steps

It would appear that the postal market within Ireland is unlikely to be fully liberalised

ahead of transposition of the Third Directive, which combined with “light touch”

regulation provides some amount of certainty of how the market will develop up to that

point. An Post will retain the significant majority of letter volumes with some

competition within niche markets, whilst competition within the parcels/express and

unaddressed markets are likely to continue as now.

1.3.3 NRA

Role of NRA

The main functions of the NRA are established by legislation.8

ComReg’s statutory objective is to promote the development of the postal sector and in

particular the availability of a Universal Postal Service within, to and from the State at an

affordable price for the benefit of all users. There is no explicit objective to promote

competition, although in ComReg’s view the availability of competing postal services, as

envisaged in European and National Legislation, is the best way of ensuring that the

Universal Service provided by An Post is fully reflective of customers needs.9

8 Communications Regulations Act 2002.

European Communities (Postal Services) Regulations 2002 (S.I. No. 616 of 2002). 9 Source ComReg Website and Strategy Statements 2003 and 2005.


Specific functions of ComReg under the Postal Regulations include issuing directions to

An Post regarding accounting procedures to be adopted in the preparation of its

regulatory accounts, monitoring compliance with Tariff Principles setting quality of

service standards for An Post, monitoring performance against this target, and ensuring

that An Post complies with its obligations to provide universal service (density of access

points, daily deliveries, etc). It should be noted that there is no obligation to impose

geographically uniform tariffs.

Under separate powers An Post cannot increase prices for reserved universal services

without ComReg’s concurrence.

The NRA does have a memorandum of understanding with the Irish competition

authority and will deal informally and formally on a case-by-case basis should they arise

in the context of the postal market.

For an overview of the regulatory powers of ComReg, see table 1.4.

Table 0.4 Regulatory powers NRA

Powers Yes/No/Unclear Remarks

Require data from USP Yes

Require accounting system Yes

Require new data studies Yes

Cancel unlawful rates Yes Subject to consultation with Minister outside the

reserved area

Levy Fines No

Seek judicial order Yes

Set new rates for USP No

Require downstream access No Has not arisen, but would prima facie be

required by Competition Law

Require data from non-USPs No


ComReg has recently published a Postal Strategy Statement (2008 – 2010), which looked

to aid in the development of a dynamic and competitive postal market, which included an

efficient public postal network.

Specifically the NRA mentions that they will encourage the development of e commerce

and e government services, which generate a demand for postal services, particularly

from fulfilment, although no detail is provided as to how this will be achieved.

Strategies will include a review of universal prices with an aim to eliminate internal cross

subsidies, and that all prices are cost reflective, including inbound international mail, and

that third part access to the public postal network is available on non discriminatory

terms.

ComReg provided the following statement to this study:


“We believe that the risks to the provision of the universal service posed by full market opening are low,

and likely to emerge slowly, if at all. We believe that ComReg can address them through the monitoring

of universal service provision.

Consumers will benefit most from the opening of the postal market to competition if An Post is subject to

ex-ante regulation and if the NRA has adequate enforcement powers.

The development of the postal industry will benefit from regulatory oversight of new entrants. Poor

quality entry risks undermining the competitive impact of entrants generally and thereby the

development of the industry as a whole. We believe that there may be benefits to a licensing rather than

an authorisation regime, since the threat of potential licence removal may help to secure sustained

quality levels.

This may require amending legislation, and there is a potential opportunity to incorporate this as part of

the process by which the Third Directive is implemented into Irish law.”

Capacities of NRA

ComReg has full-time dedicated staff of five full-time, but about 7-8 FTE10

when

considering ad hoc resource employed. The funding mechanism is via a specifically

postal levy (Levy Order 2005).

The forecast funding (budget) for 2008 is 1.2 million euro although the forecast outturn

cost is 1.4 million euro.11

Complaints and redress procedures

An Post and any other postal service provider with an annual turnover of €500,000,

exclusive of VAT, must draw up “transparent, simple and inexpensive procedures for

dealing with users complaints, particularly in cases involving loss, theft, damage or non-

compliance with service quality standards (including procedures for determining where

responsibility lies in cases where more than one operator is involved).”12

The intention of the above is to ensure disputes are settled promptly and fairly and for a

system of reimbursement or compensation to be provided for.

1.3.4 Licenses

Within Ireland there are in fact no licensing requirements, however, all postal service

providers other than An Post with an annual turnover of more than €500,000, excluding

VAT, must obtain a postal service authorisation from ComReg.

These minimal standards may present difficulties on full liberalisation, especially if local-

to-local competition develops in the higher density conurbations, in that these types of

operators are likely to be below the turnover threshold and therefore be out-with

10

Source ECORYS questionnaire to ComReg. 11

Source ComReg website. 12

Source S.I. 616 of 2002 Regulation 15(1) and ComReg Website.


regulatory influence and supervision by ComReg. In particular issues around mail

integrity may come to the fore in an un-licenced market.

The following table presents details of the Postal Service Authorisation.

Table 0.5 Entry regulations

Instrument Services allowed under

the license

Conditions for obtaining

the licence

Number of licences

approved (2007)

Postal Service

Authorisation

Non reserved services Turnover in excess of

500,000 euro

Draw up a code of

practice covering

customer complaints and

redress;

Make sure that they meet

essential requirements in

relation to the postal

services they provide, for

example, security of mail,

Protection from loss or

damage and so on; and

Respect the area

reserved to An Post.

32


Holders of the Authorisation have to give ComReg ‘a written declaration that the postal

services provided by the applicant do not infringe the reserved area’.

Post full liberalisation this “light touch” authorisation process may need to be reviewed to

ensure that a competitive market develops in an orderly manner. The LECG report

“Ensuring that consumers benefit from the opening of postal markets to competition”,

commissioned by ComReg for its National Conference in 2007 provided the following

assessment:

“However, we believe that regulatory pressure may still be required to maintain market confidence.

Many of the Irish stakeholders interviewed expressed concern that poor quality operators could damage

the reputation of all new entrants, and the whole industry. Such operators would not necessarily be

seeking to develop a long term business, but to generate opportunist revenues, from a low cost, low

quality service. DX Ireland wanted ComReg to have “policing powers for the market”, to ensure that

such poor quality operators do not dump mail and damage the reputation of all entrants. Postcomm also

saw that this mail integrity was a “key point in maintaining customer confidence in the postal sector as a

whole”13

. Stakeholders mentioned that falling trust in the postal market would result in customers

switching to alternative methods of communication.”

13

Postcomm. “Licences under the Postal Services Act 2000: Licensing framework in a fully open market”. May 2005. Page 2.


1.3.5 Access

While Post Offices are excluded from the definition of postal services in Ireland the

universal service provider is required to have access points of different types:

(a) There should be a posting point as near to the commercial centre of each town as

practical from which a collection is made on five days a week (i.e. Monday to Friday,

excluding public holidays) no earlier than 5.30 pm to secure next day delivery

nationwide.

(b) In addition to the availability of posting points as described at (a) above, posting

points for single piece mail in standard envelopes shall be provided so that no one has to

travel more than 1km within the town area to post a letter, subject to the same

requirements as regards frequency and timing.

(c) Also in addition to the availability of posting points as described at (a) above,

additional posting points for single piece mail in standard envelopes shall be provided in

rural areas so that no one has to travel more than 3km to post a letter, subject to the same

requirements as regards frequency. The existing arrangements requiring postmen on

delivery in rural areas to also collect mail from customers on their route must be

maintained.

(d) There should be a facility to buy postage stamps, appropriate to the rates for mail in

standard envelopes, at a retail outlet in the vicinity of every pillar / wall box in town

areas. In this context vicinity can be defined as within 100 metres of the nearest retail

outlet, which need not be a post-office and may be automated. Existing arrangements

whereby postmen in rural areas sell stamps should be retained.

Network access

Under ComReg’s working definition of universal service An Post is required to provide a

pre-sort service. Under a bulk mail access direction issued in 2007 An Post is required to

provide access to such services at 43 specific access points within the public postal

network.

Legislation is silent on the question of mandatory provision of downstream access

although Regulation 9(3) does set out the basis on which such services should be priced.

The obligation to provide such services might arise under competition law (refusal to

supply) and access point obligations (access points must meet needs of users). Until such

access is sought and refused neither ComReg nor the Competition Authority have any

legal basis to intervene.


Table 0.6 Network access

Upstream/downstream Form of access Regulated?

(Yes, No, Unclear)

Upstream Access to street letter boxes Yes

Access to outward sorting centres Yes

Downstream Access to inward sorting centres No

Access to delivery offices No

Access to PO boxes Not applicable


The NPO and NRA have confirmed that they have not received any formal requests for

“downstream” or other part access to the incumbent’s postal facilities. The retention of

the reserved area has no doubt had some impact on this scenario in that the majority of

mail will still remain in the reserved area and it may be that activity in this arena will

increase as full liberalisation approaches.

1.3.6 Price regulation

As mentioned in the section on the powers of the NRA, ComReg has two separate powers

with regards to the NPO’s pricing. In the first instance any price changes relevant to the

reserved area have to be pre-approved by the NRA. For those services outside the

reserved area, but within the USO definition, pre-approval is not required but the NRA

has a legal responsibility to ensure prices are geared to cost, affordable, transparent and

non-discriminatory.

At the time of this report, there are no formal price controls in place (i.e. in the form of a

ceiling of allowed revenue) although prices for reserved services have to be pre-approved

by the NRA. There does not appear to be any proposal to introduce an RPI – x regime.

Price decisions are by law based on cost justification and “affordability. The NRA

undertakes a public consultation before making its decision.

The NRA has exercised the above powers with mixed results for the NPO with some

prices agreed and other refused. At this point in time, competitors do not appear to have

major concerns with regards to the NPO’s pricing, although again, it may be expected

that this will change in the run up to full market liberalisation.

In 2005 ComReg refused to concur with a price increase proposal citing inter alia issues

with An Post’s costing data that had been provided in support of the pricing application

(Response to Consultation & Decision Notice – An Post Domestic Pricing Application

2005 – ComReg 0594). Under this application the price for a standard stamped letter

would have risen to 60c.

In December 2006 ComReg issued a revised accounting direction to An Post (Regulation

of Universal Postal Services – Accounting Separation & Costing Methodology,

Accounting Direction to An Post – ComReg0663).


The NRA14

commented that it believed the review of the previous Accounting Direction

was required due to market developments and that it had concerns with the current

processes employed by the NPO.

Shortly afterwards the NPO applied for an interim price increase based on the movement

of CPI since the previously approved price increase in 2003. This resulted in a request for

a price increase for the standard stamped letter of 14.6% - to 55c. In ComReg Doc 07/10

of 9th February 2007, the NRA approved the price increase subject to undertakings to

review the price of all universal services once accounting information in accordance with

the new Accounting Direction became available.

Under the European Postal Directives NRAs must keep confidential all accounting

information they receive from universal service providers. While the NPO is required to

support applications for price increases with relevant cost data supporting the pricing

application and the NPO is required to provide the NRA with Regulatory Accounts there

can be no legal obligation to publish them. Between 2001 and 2004 the NPO had

voluntarily published a summary of its Regulatory Accounts. The NPO has said it will

keep the decision made in 2005 not publish them under review. The NPO was not

prepared to provide this study with the latest accounts.

1.3.7 Quality of service

Regulation

Regulation 12 (1) of S.I. No. 616 of 2002 requires the NRA to set and publish quality of

service standards in relation to the universal service. In accordance with this regulation

ComReg has set quality of service standards in relation to transit times for single piece

priority mail.

Targets of 94% next day delivery and 99.5% delivery within three days of posting has

been set and published for An Post’s single piece mail items in Ireland. Single piece mail

is the ordinary day-to-day correspondence posted by individuals and businesses, large and

small.

Targets for cross-border mail are in line with the Directive: 85% of the mail has to be

delivered within 3 day (J+3), while 97% has to be delivered within 5 days (J+5).

Regulation 12 (3) of S.I. No. 616 of 2002 requires ComReg to measure the quality of

service provided by An Post, and to publish a report of monitoring at least once a year.

ComReg, after consultation with interested parties, decided to publish reports of

monitoring of single piece domestic mail items on a quarterly basis as well as to publish

an Annual Report.

Measurement of domestic transit times is undertaken by an organisation that is contracted

by ComReg and that is independent of postal operators. The measurement it is based on

the statistical methods set out in the relevant European standard (EN 13850). Mail flows

14

Source ComReg 0663.


that area measured include (1) mail posted in Dublin (City and County) for delivery

nationwide and in Dublin County and (2) mail posted outside Dublin County for delivery

nationwide, locally (i.e. within the same County of posting) and in Dublin County.

Monitoring of performance against these targets is carried out by TNS mrbi on behalf of

ComReg.

The quality performance standard for the delivery of intra-Community cross-border mail

was set by the European Commission and was transposed into Irish law under Regulation

12(2) of the Regulations and its Schedule.

Performance

Table 0.7 Quality of service USP

Standard Threshold Performance USP Remarks

D + 1 National 94% 77% 07 FY results, increase of

5 % from 06.

D + 1 Local 94% 78% 07 FY results, increase of

3 % from 06

D + 3 National 99.5% 97% 07 FY result equal to 06. ]

Cross-border J + 3 85% Target exceeded in 2007

Cross-border J + 5

97% Target exceeded in 2007

(PWC results supplied in

commercial confidence)

Source ECORYS Questionnaire to An Post with ComReg results.

As can be seen from Table 1.7, the NPO did not meet its domestic target for 2007.

However An Post also has contractual commitments to cross-border operators under the

REIMS agreements. In 2007, international inbound quality of service was 93.3%, against

a target of 93%, while international outbound was 84.3% against a target of 80%.15

In setting the target of 94% for domestic mail ComReg cited the following reasons:

• An Post’s network is designed for 100% next day delivery and there shouldn’t be

issues in achieving a quality of service close to this;

• 94% is based on ComReg’s top-down calculations;

• 93% is legally binding target accepted by An Post under REIMS II;

• 94% is lower than the 95% target set by the Minister in the late 1990’s and is lower

than that suggested by one business organisation in response to this consultation;

• 94% is in the mid-range of European targets.16

It should also be noted that An Post has 4 mail centres none more than 260 km apart,

while Britain which has 69 mail centres up to 1000 km apart is able to meet a comparable

target.

15

An Post Annual Report 2007. 16

ComReg 04/56.


In publishing the Annual Report on An Post’s Quality of Service in 2007 ComReg

commented:

“The sustained improvement in An Post quality of service performance throughout 2007 for next day

delivery of mail will be welcomed by all postal users. However, next day delivery has improved by just

six percentage points over the past five years, since monitoring of quality of service commenced, and

the annual result still remains well short of the target of 94%. Top quality postal services are an

important service for every household in the land, and they are fundamental to Ireland’s national

competitiveness. Much more work needs to be done by An Post to bring next day delivery rates up to

the standard of best practice internationally, and they must build on this performance improvement in

2008.”

An Post offers a nationwide single stream service (no economy) in comparison to many

other countries with priority/non priority thus having a relatively lower volume requiring

next day service. 17

In WIK's 2003 study for the EC on Quality of Service there is a table

(Figure 4-23 on page 190), which is described as a "QofS environment index" and seeks

to explain quality in terms of demographics etc. Ireland is identified as one of those

countries "characterised by relatively disadvantageous conditions for the provision of

D+1" (page 189).

The range does not seem as extensive as some other states. In particular there does not

appear to be a formal target for registered mail.

1.4 The mail market

1.4.1 Mail market overall

The NRA has no powers to collect data on the size of the mail market in the detail

requested, either in volumes of in turnover.

17

Source An Post.


Table 0.8 Size of the mail market in turnover (million Euro)

Postal product 2005 2006

Addressed Direct Mail*

Bulk mail and consolidation

24.9 26.4

B2B non-bulk mail

Individual item mail (ex registered,

newspapers and advertising)**

Registered***

349.3 374.5

24.0

Cross-border mail**** 163.8 169.7

Unaddressed mail***** 20.4 20.2

Parcel mail****** 37.0 43.0

Express mail

Total 595.4 657.8

Note:* ECORYS estimate at 0.55 per item, **ECORYS estimate at 0.70 per item, *** ECORYS estimate at 6.00

per item **** ECORYS estimate at 0.90 per item, ***** ECORYS estimate at 0.10 per item ******ECORYS

estimate at 10.00 per item.

Based on estimations of letters per capita of An Post and the UPU (see below), we

estimate the size of the total addressed mail market in Ireland in volumes to be

approximately 790-800 million items.18

It has to be noted that the estimated number of

mail items per capita is under discussion.

Our estimation is also in line with our evaluation that the NPO has a dominant position in

terms of letter mail and as a result that the market size for the first four categories of table

1.9 is only marginally greater than the volume figures of An Post, as given in Table 1.13.,

For unaddressed mail, we used a working assumption that the NPO has in the region of

50% of unaddressed mail, leading to a total market size that is in line with our estimations

of the total market based on the mail items per capita, see table 1.9.

Table 0.9 Size of the mail market in physical terms (million items)


Addressed Direct Mail 45.2 48.0

B2B non-bulk mail

Individual item mail (ex registered,

newspapers and advertising)

Registered

499.0 535.0

4.0

Cross-border mail 182.0 188.5

Unaddressed mail 204.0 202.0

Parcel mail (domestic) 3.7 4.3

Express mail

Total 933.9

981.8

Source: UPU Statistics and ECORYS estimation.

18

Population of 4.22 million persons multiplied by 187 (An Post) to 190 (UPU) mail items per capita.


According to the last available data is from Eurostat, the contribution of the postal sector

to the GDP is 0.4%.19

There have been different figures provided for the number of letter items per capita. The

latest figures published by An Post are 187.4 (2004) and 183.3 (2005) No figure was

published in the 2006 accounts. Based on the 2006 UPU Statistics, the figure is circa 190,

which is in line with the estimation of An Post. However, Eurostat published a figure of

156 in respect of 2005.20

As this number differed quite significantly from the estimations

of An Post and the UPU, we consider the Eurostat data less likely and understand that this

may be for domestic mail only whereas the others included inbound international21

.

The NRA has expressed concerns on the accuracy of the above due to concerns it has on

the accuracy of volume recording by the NPO. The NPO and NRA are in discussion over

identifying a data capture system that is mutually acceptable.

1.4.2 B vs C

The NRA was unable to provide any data. In the table below, we present the figures from

ECORYS 2005a.

Table 0.10 Postal streams in the market for addressed mail in turnover (million Euro)

Postal stream 2006

B2B 30%*

B2C 55-60%*

C2B 4-8%*

C2C 7-8%*

Source: ECORYS 2005a.

Note: * Estimation of ECORYS and ComReg for 2004.

The NRA did comment that the proportion of consumer originating mail within Ireland is

likely to be higher than other member states due to a low number of letter items per

capita.

1.4.3 Market opening

According to An Post’s 2006 Financial Commentary, over 62 % of the market is open to

competition, although it is likely that less than 1% of (addressed) letter mail is actually

being competed for.

19

Information supplied by ComReg. 20

Information supplied by ComReg. 21

Information supplied by ComReg.


The NRA has confirmed that due to the “light touch” regulatory regime within Ireland it

has not experienced any issues in terms of unauthorised activity within the postal market.

1.4.4 Cross-border mail

The country has seen a substantial influx of migrant workers from other EU states, which

are exerting some influence on cross-border posting patterns as compared to the more

traditional market of the UK. Competition is emerging in the market for C2C parcels with

GLS opening a network of ‘parcel shops’.

Volumes

Cross-border volumes in totality (for the market as a whole) are not available, however

the ECORYS 2005 report gave a total of 190 million items (2003) and the total from the

UPU Stats for the NPO is 188.5 million for 2006.

Allowing for other operators (primarily in the parcels and express arena), it must be

assumed that cross-border volumes (Inbound and Outbound) are now (2007/08) in excess

of 190 million.

Main actors

The principal service providers (outbound) are An Post, Spring (consortium of Royal

Mail, TNT and Singapore Post) and DHL Global mail and a number of consolidators who

inject mail into international networks via operators in the United Kingdom.

For inbound cross-border mail, only the NPO (An Post) can provide a delivery services

for letters because of the reserved area, although the main European operators have their

own delivery networks for parcels - Royal Mail (GLS), Deutsche Post AG (DHL), TNT

(TNT), La Poste – France (DPD formerly Interlink).

The British to Irish market is probably the largest cross-border market in Europe and

operators observed (marketing the letter mail market) include Royal Mail, Swiss Post

International, Posten SE (Sweden), TNT, Deutsche Post, La Poste.22

Remuneration issues

The NRA continues to have concerns with regards to the remuneration the NPO receives

for incoming cross-border mail and believes that the agreed tariffs (terminal dues) are not

reflective of the costs of delivery. The following is a statement made by the NRA in its

2007 decision document (ComReg0710) on the interim price review, pointing at the issue

that the terminal dues are most probably not cost reflective:

“It should be noted, however, that the accounts for the years 2001 to 2004, which have been published,

suggest that the primary reason for An Post’s losses in the past have not emanated from the provision

of the universal service within the state, but rather from An Post’s failure to comply with Regulation 10

“Agreements on Terminal Dues” in respect of the charges that foreign postal operators pay for access to

An Post’s delivery network.”

22

Source ECORYS questionnaire to ComReg.


In the four-year period 2001 to 2004 inclusive, the NPO had recorded cumulative losses

of 93 million euro against inbound international mail.

The NRA also believed that it was inappropriate that the Special Drawing Rights (SDR)

rate was used between member states that had the Euro as their currency.

According to the NPO this practice of using SDR’s has not resulted in any difficulties for

the parties involved.

1.4.5 Impact of innovation

ComReg commissioned a Postal Services Business Survey during 200723

, which gives a

general perception of mail senders that they have increased the volume of mail generated

overall. 41% of business customers reported an increase in the volume of mail posted,

while 47% reported ‘no change’. Only 9% reported a reduction. Increases in volumes sent

were more likely to be among Corporates (46%) compared to 40% among SMEs.

Those within the wholesale, service and Government sectors (60%, 49% and 58%

respectively) were also most likely to claim increases in volume.

However, of those that felt mail volumes had declined, the primary reason given was due

to emails and electronic transfers (see table).

Table 0.11 Reasons why mail volumes would decline (% of respondents)

Reason % of answers

Emails 57%

Electronic transfers 11%

Cost 9%

Texting 1%

Other 36%

Don’t know 3%

New services

The main innovations within the Irish market appear to be being driven by the parcel

market. This may well be a direct result of increases in both business and social consumer

needs in terms of web commerce.

An Post has introduced an experiment for certain customers using eBay, which enables

the clients to post at reduced rates24

. GLS, a Royal Mail company focussing on parcels

and express delivery, are introducing Parcel Shops, which enables customers with

“sporadic” dispatches to drop off the parcels at shop in shop locations.25

DHL appear to

be offering a similar service using locations such as Cartridge shops.26

23

Study carried out by Millward Brown IMS. 24

Source An Post. 25

Source GLS website. 26

Source DHL website.


During the early part of 2006, An Post introduced a revised portfolio of mail services

designed to make their services simpler and more transparent.

1.5 Market structure and competition

1.5.1 National postal operator/Universal Service Provider

An Post Group is a Public Limited Company. The shares of An Post are fully held by the

Irish government. The Minister for Finance holds one ordinary share and the remainder of

the issued share capital is held by the Minister for Communications, Energy and Natural

Resources. The Company operates the national postal service and money transmission

services and provides agency services for Government Departments, the National

Treasury Management Agency, An Post National Lottery Company and other bodies.

Table 0.12 Subsidiary and associated undertakings

Name Nature Holding

An Post National Lottery Company Operation of the national lottery 80%

Arcade Property Company Ltd Property development & letting 100%

Post Consult International Ltd Computer software services 100%

Precision Marketing Information Ltd Provision of marketing data etc 100%

Princes St Property Co Ltd Property development & letting 100%

Printpost Ltd High volume printing 100%

Post Trust Ltd Digital certification 100%

Transpost Ltd Courier & distribution 100%

An Post Billpost Processing

Services Ltd

Bill payment processing 100%

An Post Geodirectery Ltd Data base services 100%

Air Business Ltd Distribution 100%

The Prize Bond Company Ltd Administration of the scheme 50%

Joint Venture

Post Bank Ireland Ltd Banking 50%

The main business areas are the provision of postal services and the provision of counter

services, including banking.

Post office network

There are three kinds of postal offices. First there are postal offices owned by An Post.

Secondly there are postal offices that are franchised, meaning the legal ownership lies

with others than An Post. Thirdly, there are postal agencies, which offer a limited range

of services.

As of January 2008, the composition of the An Post retail network included: 74 company

offices, circa 1220 franchise offices, and circa 170 postal agencies.


An Post is currently conducting a strategic review of its retail network, with a view to

identifying network business requirements for the medium term. As part of this

programme, An Post is converting company-owned postal offices to a franchise basis. At

the end of 2007, there were 74 company offices, down from 84 at the end of 2006.

The number of franchise offices has also continued to fall. Over the course of 2007,

75 franchise offices converted to postal agencies or closed as part of the most recent

voluntary severance programme. A postal agency is not a post office, but provides a small

number of services, including encashment of welfare benefit cheques and sale of stamps.

Table 0.13 Postal network of the national postal operator (NB This is not part of the postal network, but a retail network

outside the scope of postal regulation)

An Post 2007

Number of post offices 74

Number of postal agencies 1,218 contractors, 172 agencies and 2750 retail outlets

contracted to sell stamps

Number of street letter boxes 5,000

Source – An Post position at 31 December 2007.

The number of transactions made at the country’s post offices and postal agencies during

2006 was over 100m, with the BillPay service giving 25.5m bills paid during that period.

The An Post subsidiary Postbank (jointly owned with Belgian bank Fortis) also owns the

Postpoint network of electronic terminals located in over 3,000 retail outlets throughout

the country. Customers can use Postpoint for bill-pay, mobile top-up and other services. It

has been reported27

that the reduction in the number of rural sub-post offices has been

heavily influenced by electronic substitution.

Revenues28

The analysis of turnover is as follows:

Table 0.14 An Post turnover in 2006 and 2007

Turnover 2006 2007

Postage: Letters and parcels 594.3 631.6

Postage: Elections and referendum 14.7

Post offices: Agency, remittance and other services 144.2 154.3

Other services 44.8 29.0

Interest income 9.5 18.2

Total Ireland 792.9 847.8

Other services (United Kingdom and other European) 25.9 28.2

Total An Post 818.8 876.0

Source: An Post annual report 2007, p. 58.

27

European Foundation for the Improvement of Living and Working Conditions 2007. 28

An Post Annual Report 2007.


Table 0.15 Division of turnover of the national postal operator per market segment

Postal product 2006 Volume (m items)

UPU Stats

2006

(in million Euro)

% Volume

Addressed Direct Mail 48 advertising items Information supplied

by An Post but

confidential

5.4%

B2B non-bulk mail

Individual item mail 535 ex reg, newspapers and

advertising

4 registered

60.7%

0.5%

Cross-border mail 1 Int reg out

1.5 Int reg in

83 Int out

103 Int in

0.1%

0.2%

9.4%

11.7%

Unaddressed mail 101 11.5%

Parcel mail 3.4 inland

0.5 Int out

0.4 Int in

0.4%

0.1%

Express mail

Total 880.8 594.3 100%

Source: An Post 2006 Financial Accounts and UPU Statistics.

Profits29

Operating profits for the Group were 4.7 million euro in 2006 and 29.1 million euro in

2007. An Post reported that all aspects of its businesses contributed to this improved

performance and better performances were recorded in all main operational areas.

Percentage of revenues and profit coming from letter mail and more specifically from the

reserved area30

In 2006, 72.5% of revenues were derived from Letter and Parcel postage; in 2007 the

figure was 72%. There is no information publicly available as how much of the revenue

was derived from the reserved area.

Degree of vertical and horizontal integration

During 2006, An Post formed a joint venture with Fortis (banking and insurance) to

provide retail-banking services through its network of post office counters. There are no

bilateral or multilateral alliances outside normal trading relationships (e.g. REIMS) with

other NPOs and none are planned.

29

An Post Annual Report 2007. 30

An Post Annual Report 2007.


1.5.2 Competitor postal operators

Table 0.16 Overview of main competitors on the postal market (2007)

Postal

operator

Market Volume mail

/ Turnover

mail

# of

employees

Service level

(number of

deliveries per

week)

Coverage

DX Ireland BtoB Next Day

Parcels

Document

Exchange

10 million items Daily

Daily

Ireland

Ireland/International

DEPS Registered Post Daily Dublin Cork

The Leaflet

Company

Unaddressed

mail

150 million

items

Ireland

Door to Door

Distributors

Unaddressed

mail

Telephone

directoriy

delivery

Ireland

Publicity Mailing Unaddressed

advertising

production and

delivery

120 distributors

plus others

Flexible Ireland

DHL Express

International

mail

Daily Ireland/International

UPS Express &

Logistics


Fedex Express


TNT Express Express &

Logistics


Nightline

(Source

Nightline)

Parcel

mail/Express

2m items p.a. 200 40,000 All of Ireland

DPD formerly

Interlink

(part of Geopost

SA - La Poste)

Parcels 6 million

40m euro

600 Daily Ireland/International

GLS Parcels

Express

Daily

Daily


There are currently 31 authorised postal service providers. All the major International

Express companies are active plus there are two specialist Document Exchange providers

(including Registered Mail services for the legal profession etc). In addition there are a

number of parcel companies (many with international connections as stated previously)

and a number of local courier type companies plus a few specialist companies.


Only Nightline responded to the original ECORYS questionnaire.

Nightline

Nightline is a private limited company with a proprietary network of self-employed van

operators. It is the partner in Ireland for Initial City Link and Business Post Group and

focuses on delivery of national parcel mail and express. The volume of mail handled in

2007 was 2 million items.

Nightline stated31

that they were growing at around 20% per annum (and expected to

continue for the next 4 to 5 years). This growth is expected to be realised by introducing

new products, mainly be in the area of home delivery and Internet shopping.

There are 200 employees working at Nightline.

Competition

It would appear that there is very little direct competition with An Post in the addressed

mail market, with the exception of the market segments outbound international mail from

businesses (Spring, DHL Globalmail), outbound international parcels (GLS) and

outbound express (DHL, UPS, Fedex, TNT). Competition in the unaddressed, parcels and

express markets continue to be vibrant.

The reduction in the reserved area does not appear to have any measurable impact on the

NPO’s financial performance with Turnover32

from post up by 9% in 2006 compared to

2005 and the Letters Core Revenue Index up 4.2% over the same period.

There would appear to be only two competitors operating an end-to-end delivery service:

DX and DEPS. The former company operates within a niche market of business to

business and document exchange, whilst the latter operate a form of registered post.

Only one competitor responded to the questionnaire (Nightline – parcel business) and

reported no impact at all from reducing the reserved area.

Table 0.17 Number of competitors and degree of competition (2005)

Postal product Market share USP Number of

competitors

Concentration ratio

C3

Bulk mail and consolidation >99% 1

B2B non-bulk mail >90% 2

Individual item mail 100% 0

Cross-border mail >75% 5

Unaddressed mail >50% 3

Parcel mail

Express mail

Total

Source ECORYS 2005 report and estimates on market share.

31

Source ECORYS questionnaire to Nightline. 32

Source An Post Report & Accounts 2006.


Table 0.18 Number of competitors and degree of competition (2006)

Postal product Market share USP Number of

competitors

Concentration ratio

C3

Bulk mail and consolidation >99% 1

B2B non-bulk mail >90% 2

Individual item mail 100% 0

Cross-border mail – inbound

outbound

100%

>75%

0 inbound

2 outbound

Unaddressed mail <40% 3 main plus many

smaller

Parcel mail <50% 5 main

Express mail <50% 3 main

Total

Source ECORYS estimates.

There has not been any obvious evidence of recent entries into the national market.

Consumers switching behaviour

A qualitative study, conducted by Millward Brown IMS for ComReg, showed that the

percentage of mail users that only posted with An Post has reduced from 86% in 2005 to

76% in 2007. 33

The movement of 10% is reflected in the increase of businesses using

both An Post and another provider from 12% to 22%.

12% of respondents said they used other than An Post for standard letters. In the market

of packets and parcels 55% (packets) to 60% (parcels) of the mail users say they used

other than An Post.

The top three reasons for customer to switch mail operators are speed/efficiency,

guaranteed next day delivery and price.

Current and future profitability prospects

No information is available on the current and future profitability prospects of postal

operators.

1.5.3 Competition issues

The NRA held a National Postal Conference in October 2007, entitled “Ensuring that

consumers benefit from the opening of postal markets to competition”.

During the conference, the NRA stated that it believed there were still significant barriers

to entry for competitors to the NPO. Cited were the relatively low density of delivery

points, below cost prices for inbound international mail, brand loyalty/customer inertia,

lack of postcodes and a postcode address file, and the VAT situation.

33

Millward Brown IMS 2007.


A competitor, Nightline, also expressed the above concerns.

In terms of legislation, DX of Ireland, made the following comments.

Clause 8(3) of S.I. 616 of 2002 states that “The High Court may, on the application of An Post, make an

order prohibiting the provision of any person of any service reserved to An Post under paragraph (1),

and may give such other direction or make such other order in relation to the matter that the Court

considers appropriate”. The universal service provider “An Post” should not be the organisation with the

defined authority to apply to the High Court. But rather, this responsibility should lie with the National

Regulatory Authority – the Commission for Communications Regulation (ComReg).

Given the current legislative position as outlined above, it provides An Post with the legal opportunity to

seek an injunction or other legal recourse, other than ComReg. This is extremely worrying for DX

Ireland, as we believe that An Post will take advantage of its position and seek injunctions to stop DX

Ireland competing against An Post in the non reserved area. For example, in September 2000, An Post

sought an injunction to prevent the Land Registry awarding a contract to DX Ireland, which involved the

provision of mail services using Document Exchanges. Under E.U. and Irish legislation, Document

Exchanges may not be reserved. In late 2005, some five years later, the above matter was resolved and

the Land Registry issued a new tender for the provision of mail services and the contract was awarded

to DX Ireland.

We have a grave concern that An Post will again invoke clause 8(3) and possibly tie up DX Ireland and

our customers in court for several years, as happened with the Land Registry. In order to ensure that

ComReg and not An Post regulates the postal sector in Ireland, clause 8(3) of the above Statutory

Instrument should be amended to empower ComReg to act as the regulator and not An Post.

In its response to the DCENR consultation on transposition of the third directive34

ComReg highlighted the following non-exhaustive listing of barriers to entry that would

need to be addressed.

a. Economies of scale, density and scope particularly in the delivery

market;

b. The VAT exemptions enjoyed by An Post;

c. The lack of a postcode system;

d. The control of national address databases;

e. Obligations in respect of Terminal Dues under the UPU convention

(legitimised ‘below cost’ selling to potential competitors);

f. The ubiquity of its network, developed with state funding;

g. “Brand loyalty” and the value of its “brand” – built up over centuries;

h. The size of the national market;

i. Customer inertia;

j. The availability of free capital – An Post has not paid a dividend since it

was formed, despite significant retained earnings and cash on its balance

sheet;

k. Exemption from many legal obligations, e.g. parking and planning

Regulations, and the limitation of liability set out in Section 64 of the

34

ComReg 08/47.


Postal and Telecommunications Act, 1983 including the exemption

Section 39 of the Sale of Goods and Supply of Services Act, 1980;

l. The right to initiate enforcement proceedings against other operators (e.g.

Regulation 8(3) of S.I. 616 of 2002);

m. The low percentage of industrialized mail in Ireland compared with other

countries;

n. Low population density (even in urban areas) and the low level of

urbanization compared with other developed countries.

ComReg also highlighted the abuses that could arise if the prices of a dominant supplier

were not properly controlled:

ComReg recognises that following FMO postal operators must have the flexibility to respond quickly to

competitive developments, but would suggest that this should not be at the expense of those customers

who may have little choice as to which postal operator to use, or in deterring competitive entry by below

cost selling.

The necessity therefore is to put in place an ex ante price control that gives an incentive for an efficient

universal service provision, allows the operator flexibility in responding to market demands, while

protecting customers and other operators from any abuse of An Post’s dominant position. How this

might be achieved is discussed in section 4.2.2

Two examples demonstrate what can happen absent ex ante price controls.

a. In Ireland, the size of the reserved area was reduced to 50g on 1 January 2006.

This meant that An Post, the incumbent, was free to increase the tariffs for all items

weighing over 50g without seeking the regulator’s prior concurrence. On 31

January 2006, An Post announced that it intended to revamp the range of service it

offered, involving an increase in most tariffs, other than for the reserved services, to

be implemented on 20 February 2006. Specifically, tariffs for letters weighing

between 50g and 100g were increased by 25% (from 48c to 60c) if postage was

prepaid with stamps, by 15% (from 48c to 55c) if postage was paid by meter

franking and by 4% (48c to 50c) if postage was paid by Ceadúnas (on account).

Prior to this, An Post had claimed that format rather than weight was the primary

cost driver;

b. On 1 January 2004, the market for international outbound mail was fully opened to

competition and from the same date, An Post raised prices by as much as 57% for

mail to Europe.

An example from the early years of postal liberalisation in Sweden illustrates the consequences of a

poorly designed price control:

The price subject to the price cap was a hypothetical, average price. The prices for different

price classes were averaged using the average weight of the product. It was then assumed that

90% of the postal items were given a discount. ….

In March 1997, Sweden Post took advantage of this loophole in the price cap to raise the

normal postage for letters by 30%. As the price reduced postage was simultaneously lowered


by a few percent, the average price increase (under the assumption that only 10% of the items

did not receive the discount) was within the increase in the net price index.35

In both the Irish and Swedish examples large scale users of the post were treated much more

favourably than other customers, especially private consumers and small businesses.

In the Swedish example the Swedish post office (Posten AB) faced a competitor - CityMail – and the

fear would be that by reducing prices for its largest customers it was selling ‘below cost’ to make it more

difficult for its competitor to survive. More than 100 complaints were dealt with by the Swedish

Competition Authority between 1993 and 1999 alone. Posten AB was found to have used its market

power to exclude competitors from the market on a number of occasions. In one example, it was found

to have engaged in predatory pricing by lowering the price for magazine distribution in three urban

areas where its main competitor, CityMail, was active, thereby seeking to exclude the competitor from

this market segment36

.

VAT

In terms of VAT, An Post does not charge VAT on letter services (other than as below)

and VAT exempt customers (i.e. banks, charities etc) cannot claim back VAT charged,

which would be the case if an alternative supplier were to provide mail services.

An Post is closely monitoring the postal VAT debate within Europe as it is very

concerned about the financial implications arising from its introduction.

VAT at 21% is charged (i) on "Courier" (EMS) mail posted internally and on

outbound items to all EU destinations and (ii) on "Publicity Post" (unaddressed

advertising material). All other mail categories are VAT exempt.

Change in address notifications

In common with all common law countries postal items must be delivered to the

addressee. An Post is obliged to forward any mail it delivers to the addressee if he has

changed address. In addition to acting on the instructions of the new residents An Post

offers a ‘traditional redirection service’ in which (for a fee) An Post undertakes to re-

address mail on behalf of the addressee. A private sector company, NewAddress.ie,

provides a complementary service whereby it offers to contact all business customers of

the person moving home and ensure that the address databases are updated so that most

mail does not need to be redirected.

1.5.4 Results of competition

Change in reserved area from 100g to 50g does not appear to have any material impact on

the market share of the NPO. This is probably due to customers requiring a “one stop

shop” for their mailing needs.

35

This quotation from ‘Implementing a price regulation in a deregulated letter mail market - The Swedish experience in brief’,

PTS (Swedish NRA) August 1999, illustrates the scope there is for an operator to discriminate between different users or

different services while keeping within the terms of a global price cap. 36

See “Postal Services in the 21st Century - Report by LECG” ComReg document CP45e.


Other

Nightline provided the following comments to this study:

“The main and biggest issue in the Irish postal sector and wider logistics industry is the lack of progress

on implementing a postcode system in Ireland. ComReg did some very promising work in the area and

Government committed to having a postcode system in place by 2008. Still no apparent progress. This

is the single largest barrier to improving competitiveness and is a major infrastructure deficiency.”

1.6 Customer needs

ComReg has commission two studies during 2007, investigating satisfaction of postal

users with the services provided by An Post. The Business Customer Survey obtained the

opinion of business customers (corporate and SME37

’s], while the Social Customers

Survey focuses on the experiences of individuals.

Business Customer Survey38

The Business Customer Survey shows that satisfaction of business customers with the

letter post services of An Post has generally improved when compared to 2006, with

corporate businesses tending to express more satisfaction. Overall satisfaction with the

postal services available in Ireland has increased in 2007, with net satisfaction rising from

48% to 61%. In terms of An Post, the level of satisfaction was measured over four

categories, 1) The range of Postal service products on offer, 2) The latest collection time

from where you normally post your letters, 3) Overall cost of Postal services with An

Post and 4) The length of time taken to deliver letters.

The measurement criteria was satisfied or dissatisfied with each aspect on a scale of 1 to

5, where 1 is very dissatisfied and 5, very satisfied.

The range of Postal service products on offer was a new measure for 2007 and obtained a

mean score of 3.7. The latest collection time from where you normally post your letters

improved from 3.3 to 3.6. Overall cost of Postal services with An Post was another new

measure and achieved a mean score of 3.2 and, the length of time taken to deliver letters

improved from 3.1 to 3.6.

However, there are a significant number of businesses that remain dissatisfied with

reliability (19%), the overall letter service (21%) and value for money (37%). There was

also considerable dissatisfaction expressed on the overall cost of the postal service (25%).

Main sources of dissatisfaction were delivery issues, price of services and customer

services being the most cited reasons for dissatisfaction.

37

SME’s Small and Medium sized enterprises. 38

Millward Brown IMS (2007) (n=953)


Social Customers Survey39

One in ten social mailers were dissatisfied with the postal service over the past 12

months, with only one in three of the dissatisfied number making a formal complaint. The

main reason for dissatisfaction concerned “delivery” issues.

One in four social mailers are dissatisfied with the information provided by An Post with

regard to postal services, while one in three are dissatisfied with the information provided

by other postal service providers. The difference between other postal service providers

and An Post is more likely to be due to lower awareness by social customers of the other

providers.

Sixty percent of the respondents believe there is factors that would stimulate increased

usage of the postal service. Price is by far the most important consideration, with

reliability and service quality also featuring prominently.

An Post has not undertaken any customer surveys.

1.7 Price performance

Tariffs

The existing price point of 55 cent for 1st class letters is higher than the optimum price

point for sending a standard letter, as calculated by Millward Brown IMS using the Van

Westendorp Price Sensitivity Model in a study for ComReg. In this model, developed in

the 1970’s by a Dutch economist, price sensitivity relates not to absolute price but the

perceived value of the product and service. The objective of the Model is to figure out the

range of acceptable prices as well as the optimum and indifference price points for a

product or service. According to Milward Brown IMS the viable range is between 44c

and 54c while the optimum price point is 49 cent.

Table 0.19 Public tariffs (in Euro)

Postal product 2005 2006 2007

Letter post 1st class € 0.48 € 0.48 € 0.55

Letter post 2nd

class n.a. n.a. n.a.

Letter post cross-border UK: €0.60

ROW: €0.65

€ 0.75

[All zones]

€ 0.78 (UK, European

destinations, ROW)

Parcels € 9.50 plus €0.30 per

kg thereafter

€ 13.00 plus €1.00 per

kg thereafter

€13.50 @ 5kg plus €

1.00 per kg after

(Ireland & Northern

Ireland)

Parcels cross-border UK: € 16.80

N. Ireland: €11.00

USA & Can: €39.00

EU (priority only):

€46.00

UK: € 37.00

EU: €51.00

ROW: €79.00

€53.00 @ 5kg plus €

3.00 per kg after

(European

destinations other than

UK)

39

Millward Brown IMS (2007).



Non EU (priority only):

€52.00

ROW (priority only):

€97.00

Registered item € 3.90 € 4.50 €5.00 (Ireland and

Northern Ireland)

Insured item € 3 (< €1250)

€ 4 (< €1750)

€ 4 (<€1500)

€ 5 (<€2000)

€4.00 extra to

registered in Ireland

gives cover of € 1500

€ 5.00 extra gives

cover up to €2000

Bulk mail, 20g (letter) €0.43 to €0.46

€0.39 to €0.44

€0.43 to €0.46

€0.29 to €0.44

USP public tariffs for a

mailing of 350 items

€ 0.45 to 0.48

depending on

presentation criteria

€0.41 to €0.46

2000 plus mailings

Bulk mail, 100g (large envelope)

€0.72 to €0.82

€0.72 to €0.82



€0.86 to 0.89

depending on


€0.75 to €0.86

2000 plus mailings

Bulk mail, 300g (packet) €2.34

See Annex 1

€2.34

See Annex 1

€3.60 depending on


and format

Total

Source: An Post NB some tariffs will be revised effective 3rd March 2008.

Table 0.20 Public tariffs (in PPP)


Letter post 1st class 0.40 0.40 0.45

Letter post 2nd

class n.a. n.a. n.a.

Letter post cross-border UK: 0.50

ROW: 0.54

0.63

[All zones]

0.64 (UK, European

destinations, ROW)

Parcels 7.86 plus 0.25 per kg

thereafter

10.83 plus 0.83 per kg

thereafter

11.10 @ 5kg plus 0.82

per kg after (Ireland &

Northern Ireland)

Parcels cross-border UK: 13.90

N. Ireland: 9.10

USA & Can: 32.26

EU (priority only):

38.05

UK: 30.84

EU: 42.50

ROW: 65.84

43.59 @ 5kg plus 2.47

per kg after (European

destinations other than

UK)



Non EU (priority only):

43.01

ROW (priority only):

80.23

Registered item 3.23 3.75 4.11 (Ireland and

Northern Ireland)

Insured item 2.48 (< 1250)

3.31 (< 1750)

3.33 (<1500)

4.17 (<2000)

3.29 extra to registered

in Ireland gives cover

of €1500

4.11 extra gives cover

up to €2000

Bulk mail, 20g (letter) 0.36 to 0.38

0.32 to 0.36

0.36 to 0.38

0.24 to 0.37



0.37 to 0.39

depending on


0.34 to 0.38

2000 plus mailings

Bulk mail, 100g (large envelope)

0.60 to 0.68

0.60 to 0.68



0.71 to 0.73 depending

on presentation criteria

0.62 to 0.71

2000 plus mailings

Bulk mail, 300g (packet) 1.94

See Annex 1

1.95

See Annex 1

2.96 depending on


and format

Total

Source: conversion rate based on Eurostat data.

Note: n.a. is not available.

Affordability

Postal services have a negligible impact on CPI calculations with average expenditure

being around 50c per week, but prices do have an impact on the use of postal services as

discussed at the beginning of this section.

1.8 Employment aspects

1.8.1 Employment

A key element of the Governments economic policy has been Social Partnerships –

voluntary pay deals between Government, employers and trades unions that typically

cover a period of three years The NPO is encompassed by this agreement and thus is

limited in its negotiating position.


Table 0.21 Employment in the sector, in employees and [FTE] (postal grades)

Operator 2005 2006

An Post total (annual average) SIP

FTE (excluding casual staff and

overtime at 31 December)

An Post permanent - postman and

sorter grades only

An Post flexible

9,552

8,966

5,664 plus management (An Post

R&A)

1,163 temporary (An Post R&A)

9,516

8,868

5,529 plus management (An Post

R&A)

1,379 temporary (An Post R&A)

Nightline 180 FTE 180 200 FTE 200

[Competitor2] n.a. n.a.

Total

Source – An Post and Nightline.

Note: n.a. is not available.

Evolution of employment levels in the USP

It has not been possible to assess the total employment provided by the postal sector as

not all operators have provided data for this study.

An Post is one of the larger companies within Ireland, and as such employs a significant

number of people across its retail and mail businesses. In addition further employment

opportunities are generated through its sub contractors and agents.

In 2006, there were 9,516 people employed by An Post, equalling 8,868 FTE. This is a

decrease of 1% compared to 2005, when 9,552 people employed by An Post, equalling

8,966 FTE.

With the introduction of major change programmes over the next 12 to 18 months, a

minor net reduction in overall staffing levels is foreseen.

There is insufficient data to divide employee according to the market segments ‘mail’,

‘express’ and ‘logistics’. With the abolition of separate letter and parcel business units in

2005, it is no longer feasible for An Post to easily apportion staff based on categories of

mail processed.

Table 0.22 Employment by universal service provider per segment, total and [% flexible]


Mail

Express

Logistics

Total 5,664 plus management

1,163 temporary

5,529 plus management

1,379 temporary

11,297 (FTE for mails & counters)

Source: An Post.

Note: above figures represent a headcount rather than FTE unless otherwise stated. The numbers 5,664 and

5,529 relate to postman and sorter grades and exclude all post office clerks.


Share and evolution of civil servants

Staff employed prior to 1984 have retained their status as civil servants. As at 31

December 2007 the number was circa 2,700. Civil servants in theory enjoy better security

of tenure under legislation (the Postal and Telecommunications Services Act 1983).40

There is a contributory pension scheme, and government have fully funded pre-vesting

day service.

Share of flexible employment

The above table would appear to suggest that, like many other postal businesses, there is a

move away from full time to part time employees, and a reduced dependency on

temporary staff.

There is a trend in the NPO towards shorter-term contracts becoming the norm for staff

recruitment purposes. It is envisaged by the NPO that this will increasingly be the

practice in the future.

Contribution of the sector to employment

According to the World Factbook (www.cia.gov/library/publications/the-world-factbook)

the population of Ireland is 4,156,119 (July 2008 est.). Of these 67.3% were of

working age (15-64 years) or 2,797 thousand, Based on the Quarterly National

Household Survey, the seasonally adjusted unemployment rate was 4.8 percent in the first

quarter (Bloomberg).41

. This would give an estimated number of people employed of

circa 2,663 thousand. Within the 2007 An Post Annual Report, the average number of

employees is reported as 9,905 (a reduction of 1% on the comparable figure for 2006),

which provides that An Post contributed circa 0.4% to employment within Ireland.

1.8.2 Employment conditions

Wages as a proportion of total costs42

In terms of An Post, according to the 2007 Annual Report wages, salaries and

postmasters’ costs amounted to €600.9m in 2007. This represents an increase of €32.1m

in core labour costs arising from the implementation of National Wage Agreements

combined with certain productivity payments payable under collective agreements. Once-

off costs of €10.7m were also incurred in 2007 as a result of additional production hours

required to process the large volume of mail for the General Election and in connection

with an agreement reached with postmasters engaged as agents. Control over labour costs

has been a feature of the year, with total production hours showing an increase of 2%

over 2006 whilst volume throughput in the same period increased by 5.3%.

Other operating costs amounted to €246m, therefore total operating costs were €847m

with wages etc representing 70.9% in 2007. Excluding the one off payment, wages etc

would have been 70.5%.

40

Source An Post. 41

Source Fergal O'Brien www.independent.ie/business/irish/unemployment-hits-10-year-high 17th July 2008. 42

Source – An Post Annual Report 2007 – English Commentary.


Table 0.23 Wages as proportion of total costs (in %)

Operator 2005 2006

An Post 69.8% 69.4%

Nightline 70% Approx. 70% Approx.

[competitor2]

Note: Proportions may not be comparable due to differing business structures.

Quality level of jobs:

The weekly basic earnings in An Post for a Postal Sorter and Postal Operative in June

2007 were € 559.49 and € 524.24 respectively while average earnings in the Distribution

and Business Services Sector of the economy at in June 2007 was € 708.47. However,

these values are unlikely to be comparable as the latter is average earnings where as the

former are basic earnings which takes no account of additional payments such as

overtime or allowances.43

Based on the wages cost and average number of employees reported in the An Post 2007

Annual Report, average wage costs across all An Post employees was €1,167 per week.

Neither Nightline nor An Post undertakes employee surveys.

Training and investment in training

An Post invests around one million euro per annum in training, excluding local delivery

training (0.11% of turnover).

Nightline currently invests circa 2% of turnover in staff training although no information

on the type of training has been provided.

Role of social partners, trade union, sector based collective agreements

An Post is almost fully unionised, with almost complete density. The Communication

Workers Union (CWU) is by far the largest union in the postal sector, representing over

7,000 of An Post’s 9,500 strong workforce.44

Also, the Civil and Public Service Union

(CPSU), the Public Services Executive Union (PSEU), and the Association of Higher

Civil and Public Servants (AHCPS) represent a number of staff in clerical and

management grades. Further, the Irish Postmasters Union (IPU) represents a number of

postmasters in sub-post offices.

Collective bargaining at An Post occurs at both local and national level. National social

partnership agreements establish minimum pay terms. However, over the years, local

company-level collective bargaining agreements have been negotiated at An Post,

including the 2000 Transformation Through Partnership agreement.

43

Source: An Post (An Post wages) and Central Statistics Office, Earnings in Distribution and Business Services, 18 January

2008 (sector wages). 44

Source European Foundation for the Improvement of Living and Working Conditions 2007.


Given the very high level of union density, collective bargaining extends to nearly all

staff in An Post. Collective bargaining at An Post extends to a wide ranging of issues

relating to pay and terms and conditions of employment.

The NPO has declared that the relationship with the unions is co-operative and that An

Post is now entering a new partnership phase with the Unions, which will hopefully result

in a progressive relationship.

The CWU also represents workers at UPS and DPD (formerly Interlink).

1.8.3 Productivity

An Post view as simplistic any attempt to calculate productivity by either dividing total

mail volumes by total FTE or employees. The number of staff purely in postal activities

cannot be ring-fenced.

Table 0.24 Productivity (in items/FTE)

Operator 2005 2006

An Post Information supplied by An Post but

confidential

Nightline 10,000 10,000

[competitor2]

Sector average

Nightline believes that with volumes increasing, productivity will improve and that

labour as a proportion of cost will only reduce modestly.

1.9 Technological developments and environment

During 2006 An Post completed an automation programme of recent years, enabling it to

sort mail to route level. They have subsequently begun a Continuous Improvement

Programme, which involves working closely with customers to ensure that their mail is

presented for mailing in ways, which will optimise the benefits of automated processing

and sorting for them.

An Post also completed the integration of the parcels business into the core mails activity.

The majority of the business previously transacted under the SDS brand has been retained

and Company costs have been significantly reduced. The intention is to further develop

their position in this segment of the mails business.45

45

Source ECORYS questionnaire to An Post.


1.9.1 External

Percentage of letter mail in the communications' market

No information was available.

Links between e-commerce and postal services;

The qualitative research by Millward Brown IMS does not provide any conclusive

evidence in terms of links between e-commerce and postal services, however implicit in

the findings is that e-commerce appears to be driving up the use of postal service,

particularly in the packet/parcel format. This is to a degree borne out by the likes of An

Post and others introducing “new” services to meet this need.

1.9.2 Internal

Percentage of letter mail benefiting from automated processing

Only An Post provided information on the percentage of letter mail automatically

processed, which is relatively high at 86% in 2006.

Table 0.25 Percentage of letter mail automatically processed

2005 2006

Percentage 85% 86%

Source: An Post.

An Post has stated that a project, which will commence shortly, which will improve the

automatic read capability of the sorting machines. No specific targets have yet been

identified.

1.9.3 Environment

An Post has said that it is fully cognisant of its social and environmental responsibilities

in this area. As a consequence a number of initiatives have already been taken .A

comprehensive plan of action is under development. Some examples of projects currently

underway are the following:

• Office waste segregation and recycling;

• Promotion on energy efficient driving practices in company vehicles;

• Pilot tests of electric delivery vehicles.

Results were not provided for the above.

1.10 Sources

• British Foreign and Commonwealth Office www.fco.gov.uk

• Postal Services Business Survey 2007 as commissioned by The Commission for

Communications Regulation by Millward Brown IMS January 2008.


• Postal Services Residential Survey 2007 as commissioned by The Commission for

Communications Regulation by Millward Brown IMS January 2008.

• ComReg An Post’s Quality of Service Domestic single piece mail. Annual Report –

January to December 2006 & Qtr 4, October to December 2006 Document No: 07/28

Date: 10 May 2007.

• European Commission Public Consultation on Postal Services 10 November 2005

(Part 2) Response by An Post (Universal Service Provider), Ireland.

• An Post Annual Report 2005 www.anpost.ie/AnPost/MainContent/About+An+Post



• An Post Financial Commentary 2006

www.anpost.ie/AnPost/MainContent/About+An+Post

• An Post Financial Commentary 2005


• An Post Financial Report 2005 www.anpost.ie/AnPost/MainContent/About+An+Post

• An Post Financial Report 2006 www.anpost.ie/AnPost/MainContent/About+An+Post

• An Post Annual Report 2007 English commentary


• An Post Annual Report 2007 English financials


• ComReg Annual Report YEAR ENDED JUNE 2004 www.comreg.ie



• Bulk Tariffs 2007 www.anpost.ie

• Terminal Dues Agreements Document No: [03/40] Date: 4 April 2003

www.comreg.ie

• Postal Levy 2005 Amended Document No: 05/53 Date: 14 July 2005 www.comreg.ie

• Strategy Statement (2005-2007) Document No: 05/77 Date: 5th October 2005

www.comreg.ie

• The Universal Postal Service A working definition Document No: 05/85 Date: 15

November 2005 www.comreg.ie

• Response to Consultation & Decision Notice – An Post Domestic Pricing Application

2005 Decision No D12/05 Document 05/94 Date 20 December 2005 www.comreg.ie

• Revised Accounting Direction and Related Issues – a report for ComReg by LECG

8th September 2006 www.comreg.ie

• Regulation of Universal Postal Services – Accounting Separation & Costing

Methodology Accounting Direction to An Post Document No: 06/63 Date: 08,

December 2006 www.comreg.ie

• Regulation of Postal Services – Universal Service Obligation - Bulk Mail Access

Document No: 07/06 Date: 31 January 2007 www.comreg.ie

• An Post’s Application for Interim Price Increase – 2007 Decision No: Document No:

D01/07 07/10 Date: 9, February 2007 www.comreg.ie

• Complaints and Dispute Resolution Guidelines for Postal Service Providers who

provide postal services within the scope of the universal service Proposed Guidelines

Document No: 07/71r Date: 25 September 2007 www.comreg.ie

• Republic Of Ireland Quality Of Postal Service Monitor - Interim Report Items Posted

On Or Between 1st January & 30th September 2007 www.comreg.ie


• Postal Strategy Statement (2008-2010) Document No: 07/101 Date: 12 December

2007 www.comreg.ie

• ComReg Annual Financial Forecast (by activity) for year to 30th June 2008

www.comre.ie

• ComReg response to the Department of Communications, Energy and Natural

Resources’ consultation on the liberalisation of the postal sector Document No: 08/47

Date: 27 June 2007 www.comreg.ie

• Ensuring that consumers benefit from the opening of postal markets to competition –

a report for ComReg by LECG 18th October 2007 www.comreg.ie

• Ensuring that consumers benefit from the opening of postal markets to competition –

National Postal Conference Presentation LECG 18th October 2007 www.comreg.ie

• Central Statistics Office Earnings in Distribution and Business Services June 2007

Final.

• Central Statistics Office Census 2006.

• Figures September 2007 First Estimates www.centralstatisticsoffice.ie

• European Foundation for the Improvement of Living and Working Conditions 2007.

• COMREG’s SYMPOSIUM ON POSTCODES 24th November 2003 www.comreg.ie

• COMMUNICATIONS REGULATION ACT 2002 (SECTION 30) POSTAL LEVY

ORDER 2005 1st July 2005 www.comreg.ie

• Regulating Better A Government White Paper setting out six principles of Better

Regulation Department of the Taoiseach January 2004 www.betterregulation.ie

• An Posts Regulatory Accounts Summary Year ended 31 December 2004

www.anpost.ie

• UPU - www.upu.int/statistics

• ECORYS questionnaire to An Post February 2008 to July 2008.

• ECORYS questionnaire to ComReg February 2008 to July 2008.

• ECORYS questionnaire to Nightline February 2008 to July 2008.

• ECORYS questionnaire to DX Ireland June 2008.

• www.nightline.ie

• www.gls-ireland.com

• www.dhl.ie

• www.thedx.ie

• www.leafletcompany.ie

• www.interlink.ie

• www.publicitymailing.ie

• UN – urbanisation, World Gazetteer – inhabitants largest cities.

• S.I. 616 of 2002 Regulation 15(1) www.comreg.ie

• Postcomm. “Licences under the Postal Services Act 2000: Licensing framework in a

fully open market”. May 2005. Page 2.

• ECORYS 2005.

• Fergal O'Brien www.independent.ie/business/irish/unemployment-hits-10-year-high

17th July 2008.


Documents

Country sheet: Ireland