This competition has resulted in the dual benefit of strengthening the structures of the incumbent postal service enterprises and significantly improving the standard of postal services. Compared to the ongoing deregulation of postal services overseas, Japan's efforts in this direction are lagging about 10 years behind. In view of the need to improve the standard of postal services and to adapt to the new age of international competition among postal services, it is now essential that Japan realizes the rapid entry of private enterprises in accordance with the Basic Law on the Administrative Reform of the Central Government. The Ministry of Posts and Telecommunications has already set up a research group of academic experts to study issues related to the entry of private-sector companies into monopoly areas. However, Keidanren requests that the government to rapidly establish a forum for neutral investigation of this question and proposes the following approach to the participation of the private sector in postal services.
Postal services are broadly divided into parcels and letters.
The growth rate of Japan's postal services market has been low in recent years because demand for postal services is closely linked to business activity. In view of the diversification of means of communication such as facsimile, e-mail and mobile phones, it has been predicted that demand for postal services may decrease in the long term. In fact, however, a synergy effect has arisen between electronic communications and conventional postal services, and it is now anticipated that, provided postal services respond appropriately, the diversification of the means of communication should not have a significant negative influence. Nevertheless, government-run postal services are burdened by high structural costs and have fallen into the red. In fiscal 1998, Japan's postal services were initially expected to make a profit of 30 billion yen, but ended up with a deficit of 62.5 billion yen.