EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 22.12.2008 
SEC(2008) 3076 
  
COMMISSION STAFF WORKING DOCUMENT 
Accompanying document to the  
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE 
COUNCIL 
  
on the application of the Postal Directive  
(Directive 97/67/EC as am ended by Directive 2002/39/EC) 
  
{COM(2008) 884 final} 
 
Ce document ne sera transmis que par voie électronique
 
 
EN 2   EN TABLE OF CONTENTS 
1. Introduction and Background....................................................................................... 4 
1.1. Purpose and scope of the Comm ission Staff Working Paper ...................................... 4 
1.2. The importance of postal servic es and their changing role.......................................... 5 
1.3. Developments 2006-2008 ............................................................................................ 6 1.4. Approach.................................................................................................................. .... 8 
2. The transposition of the Postal Directive..................................................................... 8 2.1. Aims of the Community regulatory system ................................................................. 8 2.2. The requirements of the Postal Directive..................................................................... 9 2.3. Transposition by Member States................................................................................ 10 2.4. Transposition of the Postal Dire ctive by the EFTA -EEA States .............................. 10 
2.5. Transposition of the Postal Dire ctive by the Candidate Countries ............................ 11 
3. The Application of the Postal Directive..................................................................... 11 3.1. A quality universal service for EU citizens................................................................ 11 3.2. Reserved area ............................................................................................................. 15 
3.3. Licensing and authorisation ....................................................................................... 17 3.4. Access to postal networks .......................................................................................... 19 3.5. Tariff principles......................................................................................................... . 22 
3.5.1. Tariff regulation and USP tariffs................................................................................ 22 3.5.2. Terminal Dues........................................................................................................... . 26 
3.5.3. Value Added Tax ....................................................................................................... 26  
3.6. Transparency of accounts........................................................................................... 30 3.7. National Regulatory Authorities (NRAs)................................................................... 31 3.8. Quality of services – Routing time............................................................................. 32 3.9. Complaint and redress procedures ............................................................................. 36 3.10. Technical standards.................................................................................................... 36  
3.11. Conclusions on regulatory developments .................................................................. 37 4. Market developments................................................................................................. 39 4.1. Evolution of the postal market in  a wider communications market........................... 39 
4.2. Mail Volumes............................................................................................................. 3 9 
 
EN 3   EN 4.3. Labour Costs and productivity................................................................................... 40 
4.4. Legal Status of Universal Service Providers (USPs) ................................................. 42 
4.5. Development of competition in the letter mail market .............................................. 42 4.6. Business strategies of competitor postal operators .................................................... 44 4.7. Development of competition in th e parcels and express market................................ 44 
4.8. Barriers to the development of competition............................................................... 45 4.9. Social and employ ment aspects ................................................................................. 46 
4.10. Technological trends .................................................................................................. 48 4.11. Conclusions on market developments........................................................................ 48 
 
EN 4   EN 1. I NTRODUCTION AND BACKGROUND  
1.1. Purpose and scope of the Commission Staff Working Paper  
The Community framework for EU postal servi ces is set out in Directive 97/67/EC as 
amended by Directive 2002/39/EC (hereafte r referred as “the Postal Directive”)1. Article 23 
of the Postal Directive requires the Commission  to report on the appli cation of the Postal 
Directive to the European Parliament and Council “every two years”. It also  requires that this 
report should include “appropriate information” on market developments including technical, 
social, employment and quali ty of service aspects. 
Regular market monitoring and reporting is an important element for the full accomplishment 
of a postal Internal Market. It also helps to  identify any shortcomings and problems in good 
time and allows policy makers the opportunity to take appropriate (legal) action when 
necessary and implement correct ive measures. Market monitoring is also essential to the 
process of proceeding with the EU Postal Reform in a transparent manner and to establish if it 
has generated the desired effect s and benefits. It should be recalled that the previous 
Application Reports played an important role  in the legislative process of Directive 
2008/6/EC. 
The Commission provided its first Application Report in November 20022, its second 
Application Report in March 20053 and a third Application Report in October 20064. The 
Reports were accompanied by Co mmission Staff Working Papers  containing more detailed 
information on regulatory and market developments.  
This Commission Staff Working Paper (hereinafter the CSWP) provides a comprehensive 
assessment of the overall transposition of the Postal Directive in Member States, the 
application of its key elements as well as detailed market trends (including economic, technical, social, employment and quality of services aspects). The Application Report 
describes the main developments since the pr evious Application Report adopted in October 
2006 and covers the reporting period is 2006 – 2008. Since the adoption of the 2006 
Application Report important achievements and significant changes have occurred in the 
postal sector. These are captured in this CSWP and are analysed from a Community 
perspective. To assist comparison with th e Commission's 2006 Staff Working Paper, the 
structure used in the latter has been retained. 
                                                
 
1 Directive 97/67/EC of the European Parliament and the Council of 15 December 1997 on common rules 
for the development of the internal market of Community postal services and the improvement of 
quality of service, OJ L 15, 21.01.1998, p. 14; Dir ective 2002/39/EC of the European Parliament and of 
the Council of 10 June 2002 amending Directive 97/67/EC with regard to the further opening to competition of Community postal services, OJ L 176, 5.7.2002, p. 21. 
2 Report from the Commission to the European Par liament and the Council on the Application of the 
Postal Directive (97/67/EC), COM (2002) 632 final. 
3 Report from the Commission to the European Par liament and the Council on the Application of the 
Postal Directive (97/67/EC as amended by Directive 2002/39/EC), COM (2005) 102 final and SEC 
(2005) 388. 
4 Report from the Commission to the European Par liament and the Council on the Application of the 
Postal Directive (97/67/EC as amended by Directive 2002/39/EC), COM (2006) 595 final and SEC 
(2006) 1293. 
 
EN 5   EN The main elements and conclusions of the Co mmission Staff Working Pa per are presented in 
a concise form in the 2008 Report from the Commission to the Council and the European Parliament on the Application of the Postal Directive. The latter  also assesses the conclusions 
of this document in broader context of the Li sbon Agenda and the Single Market Review  
The reporting period is of a particular relevance for the postal sector in the EU, as a number of 
decisive developments took place in the short tim eframe this Report is covering: First, the 
Federal Republic of Germany – by far the bigges t single (national) postal market in the EU - 
fully liberalised its postal mark et on 1 January 2008. Second, an ev aluation of the full market 
opening in the UK, which took place on 1 Janu ary 2006, is being undertaken by independent 
experts in the UK. Third, the effects of the reduc tion of the threshold for the reserved area to 
50 grams by 1 January 2006 throughout the EU – whic h is the last intermediate step before 
the full market opening - can now be assessed. 
Last but not least it should be recalled that  in February 2008 the Council and the European 
Parliament adopted Directive 2008/6/EC furthe r amending the Postal Directive (hereafter 
referred to as "the Third Postal Directive")
5. The Third Postal Directiv e sets a deadline for the 
full market opening by 31st December 2010 for the majority of Member States (95% of the EU postal markets in terms of volumes) and by 31st December 2012 for the remaining 
Member States. The Third Postal Directiv e thus provides the legal basis for the 
accomplishment of the internal market for posta l services. This important decision taken by 
broad consensus by the European Parliament a nd Council is not only concluding the reference 
period of this report bu t also adding an essential perspectiv e to it. The purpose and scope of 
this CSWP is not to provide a forecast on the a pplication of the Third Po stal Directive - but to 
report on the application of the current Post al Directive over th e reference period.  
1.2. The importance of postal servi ces and their changing role  
Postal services are a significant industry in  the EU economy. In 2004, postal services in the 
EU earned about 90 billion EUR or  approximately 1% of EU GDP
6. The postal services 
sector is also an important employer with  around 1.6 million people employed directly by 
operators in 20067. 
At the crossroads between communications, adve rtising and transport, postal services are, 
together with other transport, logistics and communication services, a key industry for the EU 
economy.  
In addition, postal services provide social be nefits which cannot be quantified in economic 
terms. They are an important means by which individuals can communicate with each other 
and receive information. Postal services are cons idered a service of general economic interest.  
The postal sector is evolving substantially. At the end of the first decade of the new 
millennium, postal operators are facing fierce competition from electronic means of communication. This is forcing them to adapt th eir businesses to better  respond to customer 
needs and to improve efficiency. It can be seen  from business solutions that postal operators 
                                                
 
5 Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending 
Directive 97/67/EC with regard to the full accomplis hment of the internal market of Community postal 
services, OJ L 52, 27.2.2008, p. 3. 
6 "Main developments in the European postal sector (2004-2006)", WIK-Consult, May 2006. 
7 "Main developments in the European postal sector (2006-2008)", ECORYS, 2008. 
 
EN 6   EN are developing (e.g. hybrid mail) th at they are rapidly adapting to the changing environment. 
Moreover, with the continuous opening of segments of the postal services markets, the 
incumbent postal operators are also facing increasing competition from new entrants. In response to these developments, postal operators have substantia lly improved their efficiency 
by restructuring their operations thus resulting in  cost control and better quality of service. 
The restructuring of mail handling processes in turn has often resulted in or was induced by 
the development of new products and concepts. 
Physical mail is increasingly being supplemen ted by multi-channel delivery and tailor-made 
solutions for customers. One example of this is the development of hybrid mail services 
which are now offered by most postal operators. Some postal operators even go a step further 
and are entering adjacent markets through devel oping IT services for their customers. The 
development of new and value-added services is a reaction to the threat  of e-substitution and 
the opportunities aris ing from the development of technology. 
Postal services are a crucial important elemen t of the EU's single market policy and are 
included in the Lisbon Strategy for growth and jobs that was fundamentally re-launched in 
2005
8. The Commission's Communication on a single market in the 21st century Europe9 
emphasises that initiatives on network industr ies, including the postal sector and other 
liberalized network industries,  are showing results on th e ground once they are fully 
implemented. Yet more can be done. There is br oad consensus that the sustainable provision 
of services of general economic interest, such as postal services, can best be ensured in a 
competitive market and with the development of the European single market. 
1.3. Developments 2006-2008 
The following main developments should be highlighted.  
– Opening up of the postal market in Germany as of 1 January 2008 
Germany is the fourth Member State in th e EU to fully liberalise its national postal 
market. This is an important step in esta blishing the internal postal market as the 
German postal market is the biggest national postal market in the EU. It is important 
to emphasize in this context that in Germ any market forces are providing universal 
postal service. There are however safeguard me asures in place in case market forces 
are unable to ensure the pr ovision of these services. 
– Uncertainty regarding the opening of the postal market in the Netherlands 
The 2006 Application Report indicated that th e Netherlands would fully liberalize its 
postal market by 1 January 2008. Full libera lization has now been delayed for an 
indefinite period because of – according to  the government – VAT differences with 
Germany and the UK, developments in Ge rmany as regards employment conditions 
in the postal sector and allegedly unfair empl oyment conditions in the postal sector in 
the Netherlands. The Commission is closel y looking at these developments in the 
                                                 
8 Presidency Conclusions, Brussels European Council, 22/23 March 2005.  
9 Communication from the Commission to the Euro pean Parliament, the Council, the European 
Economic and Social Committee and the Committee of th e regions, A single market for the 21st century 
Europe, COM(2007) 724 final 
http://eur-lex.europa.eu/LexUriServ/ site/en/com/2007/com2007_0724en01.pdf  
 
EN 7   EN context of Article 7 of the Postal Direc tive and the conditions under which a Member 
State can reserve certain services to a universal service provider. 
– Regulatory and market developments in the UK 
As one of the largest postal markets in the EU, and one of the first to liberalize its 
postal market on 1 January 2006, developm ents in the UK have a particular 
significance for EU postal reform. Competition in postal services has mainly emerged through access competition which has resulted in new competitors wining a market share of 20% of addressed mail volume. Access competition has resulted in lower prices, and more choice for large bulk mailers. 
– Developments regarding the application of the 6
th VAT Directive 
The VAT exemption is still applied in a va riety of ways in the Member States. The 
uneven application of the exemption and the distortions of competition can be considered an important obstacle to the de velopment of effective competition in the 
postal sector. In July 2007, the Commission opened the second stage of infringement proceedings against the United Kingdom, Germany and Sweden when it issued a reasoned opinion against all th ree. It is also expected that the European Court of 
Justice will deliver a prelim inary ruling, by the end of 2008, on the application of the 
exemption as laid down in the 6
th VAT Directive when it gives its judgement on a 
case referred by the United Kingdom High Court10. 
– Terminal dues – REIMS agreement 
The REIMS agreement is the instrument by which certain Europ ean public postal 
operators collectively determine terminal dues rates11. The REIMS agreement has 
been granted individual exemption from antitrust rules by th e Commission on two 
occasions. The second exemption of the REIMS agreement expired at the end of 
2006. Due to the reform of antitrust legisl ation and the adoption of the Council 
Regulation (EC) No. 1/2003 of 16 Dece mber 2002 on the implementation of the 
rules on competition laid down in Articles 81 and 82 of the Treaty12, any new 
agreement on terminal dues would not re quire an exemption by the European 
Commission ex-ante. Nevertheless, any new agreement would have to comply with 
the conditions of Article 81(3) of the EC Treaty, which is now di rectly applicable. 
– Preliminary rulings of the European Court of Justice 
The European Court of Jus tice (ECJ) delivered two impor tant judgments in 2007 and 
2008. The first judgement, Vedat Deniz13, concerns the application of fifth indent of 
Article 12 of the Postal Directive on access provisions. The ECJ established that 
different treatment of large mailers and c onsolidators is not obj ectively justified and 
is therefore discriminato ry. The second judgement, International Mail Spain14, 
                                                 
10 Case C-357/07. 
11 Terminal dues are the payments that postal operato rs are paying to each other for the delivery of 
incoming-cross border mail. 
12 OJ L 1, 04.01.2003, p.1. 
13 Joined cases C-287/06 to 292/06, Vedat Deniz , not yet reported – reference for a preliminary ruling. 
14 Case C-162/06, International Mail Spain, [2007], ECR I-9911. 
 
EN 8   EN concerns the application of Article 7(2) on the scope of the reserved area. The ECJ 
said that Article 7(2) of Directive 97/67/ EC must be interpreted as allowing Member 
States to reserve cross-border mail to the universal postal service provider only in so 
far as they establish that, in  the absence of such a reservation, achievement of that 
universal service would be precluded  or that that reservation is necessary to enable 
that service to be carried out under economically acceptable conditions .  
1.4. Approach 
The analysis presented in this Commission St aff Working Paper draws on the recent study by 
ECORYS on the Main Developments in th e Postal Sector (2006-2008) and builds upon a 
series of other studies co mmissioned by the Commission15. Also a number of other studies 
have been used and are quoted, where appropriate.  
As in the case of previous Commission Staff Working Papers, this one  is structured around 
two main themes: first, an analysis of the tr ansposition process of the Postal Directive into 
national law and regulatory developments (cha pters two and three). Second, the paper will 
assess market developments over the last tw o years and the influence of the regulatory 
environment on these developments (chapter four).  
Where appropriate, the CSWP provides an eval uation on possible further regulatory steps 
would be required I in order f acilitate accomplishing the Internal  Market for postal services.  
2. T HE TRANSPOSITION OF THE POSTAL DIRECTIVE  
2.1. Aims of the Community regulatory system 
The objective of the Community policy in the postal  sector is to complete the internal market 
for postal services and to ensure, through an appr opriate regulatory fram ework, that efficient, 
reliable and good-quality postal services are av ailable throughout the European Union to all 
its citizens and businesses at affordable prices.  
EU postal reform dates back to 1992 with the publication of the Green Paper on the 
development of the single market for postal services16. In 1994, the European Council 
entrusted the Commission with pursuing an am bitious postal policy. The mandate was to 
accomplish the internal postal services mark et with its universal provision through 
progressive and gradual market opening. Market  opening and the introduction of competition 
were considered a proven tool for creating jobs and achieving better results for consumers. 
But it was also clear that this competition could not be introduced in the sector over night. 
                                                 
15 "Main developments in the European postal sector (2004-2006)", WIK-Consult, May 2006; 
"The evolution of the regulatory model for European postal services", WIK-Consult, July 2005; "The development of competition in the European postal sector", ECORYS, July 2005; 
"Main developments in the European postal sector", WIK-Consult, July 2004; 
"Economics of postal servi ces", NERA, July 2004;  
All studies are available under: http://ec.europa.eu/internal_market/post/studies_en.htm
.  
16 Green Paper on the development of the single market for postal services, 11.06.1992, COM (91) 476 
final. 
 
EN 9   EN With the aim of achieving these objectives th e First Postal Directive provided for a limited 
harmonisation of EU  postal services17. It established regulatory provisions including the 
definition of a minimum universal service, a maximum reservable area, the conditions 
governing the provision of non-reserved services  and access to the network, tariff principles 
and the transparency of accounts, quality of service requirements and the harmonisation of 
technical standards. These provisions, ma inly focusing on principles and boundaries, 
established a Community framework which Memb er States could adapt to their national 
context. 
The Second Postal Directive’s reduction of th e maximum reservable area also pursues the 
original key Community objective of introduci ng a gradual and controlled opening of the 
postal market to competition18. 
The Third Postal Directive which has to be im plemented by the Member States in the coming 
years provides for the full abolishment of the re maining reserved areas and is the last legal 
step required for full market opening.  
By combining the discipline of harmonised regul ation with the stimulus of competition, the 
Postal Directive seeks to promote regulatory reform s in the Member States that will result in a 
better, more efficient provision of universal pos tal services and improvements to the quality 
of service.  
2.2. The requirements of the Postal Directive 
The Community framework for the regulation of the postal sector is set out in the Postal 
Directive. As noted above this is a framework directive which gives a considerable degree of 
flexibility to the Member States19. 
The Postal Directive contains the fo llowing key elements and requirements: 
– All Member States are to provide a universal po stal service for all users comprising at least 
one delivery and collection five days a week; 
– The maximum size of the reserved area wh ich may be reserved for the USP in each 
Member State is 50g in weight  or two and a half times th e basic tariff of an item of 
correspondence; 
– Member States may establish authorisati on procedures, which may include individual 
licences and a compensation fund in  the universal service area; 
– Member States should ensure that all users are permanently provided with a postal service 
of specified quality th roughout their territory; 
                                                 
17 Directive 97/67/EC of the European Parliament and the Council of 15 December 1997 on common rules 
for the development of the internal market of Community postal services and the improvement of 
quality of service, OJ L 15, 21.01.1998, p. 14. 
18 Directive 2002/39/EC of the European Parliament and of the Council of 10 June 2002 amending 
Directive 97/67/EC with regard to the further opening to competition of Community postal services, OJ 
L 176, 5.7.2002, p. 21.  
19 Recital 10 of Directive 97/67/EC. 
 
EN 10   EN – Member States must ensure that tariffs, includ ing special tariffs, for universal services are 
cost-based, transparent and non-discriminatory and that cross-subsidies from the reserved 
area to the competitive area are limited to the fulfilment of universal service obligations; 
– Member States must ensure that universal service providers (USPs ) consistently apply 
transparent and separated cost  accounting principles, and provi de separate accounts for 
reserved and non-reserved universal services and non-universal services; 
– The Postal Directive sets qual ity of service targets for intra-Community cross-border mail 
(85% for D+3, 97% for D+5 for the fastest st andard category of service) and requires 
Member States to define, measure and enforce compatible national targets; 
– Member States are to ensure that adequate consumer protection measures are in place, 
particularly with regard to co mplaints and redress procedures; 
– The Postal Directive aims to  promote greater inter-connect ivity between pos tal networks 
through greater technical  standardisation; 
– Member States have to establish National Regulatory Authorities (NRAs) independent 
from the postal operators. 
2.3. Transposition by Member States 
All Member States have transposed the Dire ctives 1997/67/EC and 2002/39/EC into national 
law. Nevertheless, the Commission will continue  to monitor the application of the Postal 
Directive as transposed.  
Regarding the transposition process in general, th e focus over the next two to three years will 
now have to turn to the transposition of the Third Postal Directive. 
During the reference period and up to 2008 on e infringement procedure had been opened. 
This was against Greece and concerned nati onal measures which may undermine the proper 
application of Article 9 of  the Postal Directive. 
Other issues regarding different aspects of the Postal Directive have also been discussed with 
Member States in recent years. These have however been solved without recourse to formal 
procedures. This approach often provides more  rapid solutions and ca n help to avoid and 
prevent problems in the future. 
2.4. Transposition of the Postal Dire ctive by the EFTA -EEA States  
The Postal Directive is part of the Ag reement on the European Economic Area (EEA 
Agreement) and is referred to in point 5d of Annex XI to the Agreement. The Directive was 
incorporated into the EEA Agreement on 25 September 1998 by Decision 91/98 of the EEA 
Joint Committee and entered into force on 1 May 1999. Directive 2002/39/EC of 10 June 
2002 amending the Postal Directive, has also b een incorporated into the EEA Agreement. 
That was achieved through the adoption of Decision No 168/200220. The compliance date was 
1 August 2003. The three EEA stat es, Iceland, Liechtenstein a nd Norway, were obliged to 
                                                 
20 OJ L 38, 13.2.2003, p. 30 and EEA Supplement No 9, 13.2.2003, p. 21. 
 
EN 11   EN have the amending Directive transposed by that  date and to notify the EFTA Surveillance 
Authority (ESA) thereof.  
The Directive as amended is implemented in Norway,21 Iceland22 and Lichtenstein23. The 
ESA has initiated a conformity assessment to evaluate the implementation of the Directive 
and concluded without any infringeme nt proceedings being initiated.  
2.5. Transposition of the Postal Directive by the Candidate Countries 
The Candidate Countries, Turkey and Croatia are at very different stages in the transposition 
process of the postal acquis . While it can be observed that Turk ey is only at the first stage of 
the transposition and has to implement the main pr ovisions of the Postal Directive, Croatia is 
quite advanced. The national postal legislation in Croatia is to a large extent aligned with the 
postal acquis  and has also been recently amended in  order to provide a legal basis for the 
National Postal Council, which is  acting as the NRA, to become  part of a larger NRA for 
telecommunications and post. It is  expected that Croatia will fu lly liberalize its postal market 
by 2013. 
As regards the third Candidate Country, th e Former Yugoslavian Republic of Macedonia 
(FYROM), negotiations for accession to the EU have not yet been opened. Nevertheless, 
FYROM is already very active regarding the postal sector and is aligning its legislation with 
the Postal Directive. Through their attendance as an observer in the Committee established by 
the Postal Directive (Article 21 of the Postal Directive) Ca ndidate Countries are closely 
associated with the transposition and implementati on of the Postal Directive and are in contact 
with Member States so that, where appropria te, they can benefit from best practices. 
3. T HE APPLICATION OF THE POSTAL DIRECTIVE  
3.1. A quality universal service for EU citizens 
According to Article 3(1) of the Postal Directiv e Member States shall ensure that users enjoy 
the right to a universal service involving th e permanent provision of a postal service of 
specified quality at all points in their terr itory at affordable prices for all users. 
The Postal Directive sets out mini mum standards of this service: 
– One delivery and one clearance per working day at least 5 days a week (Article 3, 
paragraph 3), 
– Density of access points taking account of the needs of users (Article 3, paragraph 2). 
                                                 
21 Act No 73 of 29 November 1996 relating to the provision of universal postal services (The Postal 
Service Act); Amendments by Acts No 5 of 9 January 1998, No 24 of 30 April 1999. Regulation No 313/2005 on accounting and cost separation for postal operators. The latter was a consequence of the 
identification of a lack of a cost accounting principles and accounting separation in the framework of 
the conformity assessment. 
22 Postal Services Act No 19/2002, as later amended by Acts No 136/2002 and No 129/2004. 
23 Postal Act of 18 December 1998 , Law Gazette 1999 No. 35, as last  amended by Act of 10 March 2004, 
Law Gazette 2004 No 106. 
 
EN 12   EN The scope of the universal services comprise s postal items of up to 10 kg/20 kg for national 
and 20kg for cross-border items as well as se rvices for registered and insured items. 
Whilst the Directive defines the minimum require ments to be met in all Member States, in 
certain exceptional locations and circumstances , NRAs may allow derogations from these 
requirements. 
The scope of universal services differs among Member States. This will become even more 
important in the future if the provision of th ese services will have to be financed in a 
liberalized market and in case that funding will be pr ovided to cover the cost of meeting 
universal service obligations. 
Collection and delivery 
All Member States comply with the minimum requirements for the number of collections and 
deliveries, obliging the USP to collect a nd deliver at least five days a week. 
Table 1– Compliance with delivery requirements  
MS Deliveries  
per week 
required Deliveries  
per week in 
practice Exceptions from 
required delivery 
frequency possibleExceptions from 
delivery at the 
premises of the 
addressee 
 
AT 5 5 No Yes 
BE 5 5 No No 
BG 5 5 Yes n.a. 
CY 5 5 No No 
CZ 5 5 No Yes 
DE 6 6 No No 
DK 6 6 Yes Yes 
EE 5 6 Yes Yes 
ES 5 5 - 6 No Yes 
FI 5 5 Yes No 
FR 6 6 No No 
GR 5 5 Yes Yes 
HU 5 5 No  Yes 
IE 5 5 Yes No 
IT 5 6 n.a. n.a. 
LT 5 5 - 6 No No 
LU 5 5 No No 
LV 5 5 - 6 No No 
MT 5 6 No No 
NL 6 6 No n.a. 
PL 5 5 No No 
PT 5 5 No No 
RO 5 5 n.a. n.a. 
 
EN 13   EN MS Deliveries  
per week 
required Deliveries  
per week in 
practice Exceptions from 
required delivery 
frequency possibleExceptions from 
delivery at the 
premises of the 
addressee 
 
SE 5 5 Yes Yes  
SI 5 5 - 6  No Yes  
SK 5 5 Yes Yes 
UK 6 6 Yes Yes 
n.a. = no information available 
Based on ECORYS, 2008  
Five Member States (DE, DK, FR, NL, UK) have exceeded the minimum of the Postal 
Directive and are obliging the USPs to collect and deliver six days pe r week. Also several 
USPs in EE, ES, IT, LT, LV, MT, SI, mostly for commercial reasons, exceed the number of delivery days on a voluntary basis.  
The Postal Directive allows for an exception to or a derogation from the collection and 
delivery requirements in exceptional circumstance. Several Member States make use of this possibility. Exceptions to the daily delivery, and conditions for applying to them, are defined 
by national postal legislations of  respective Member States and are limited to remote areas, to 
addresses with accessibility problems or to cases of exceptional circumstances (mainly force majeure or public holidays).  
The envisaged exceptions defined by national pos tal legislations are, with one exception 
mentioned below, applied only to a limited exte nt and do not cover more than 1% of the 
households in the respective Member State applying them . The Commission is closely 
looking at these developments and reports on them  to Member States vi a the Postal Directive 
Committee. 
The 2006 Application Report from the Commi ssion concluded that, with the possible 
exception of Greece, where some 7% of the population are exempt from the Directive's 
requirement for daily postal delivery, the remaining exceptions that exist in Member States are very insignificant. No changes have o ccurred since the 2006 Application Report.  
The basic requirements laid down in  Article 3 of the Postal Directive are thus fully respected, 
while at the same time the flexibility given to Member States enables them to adapt the scope 
of the universal service to their circumstance s and needs. It should  be emphasized that 
requirement for exceptions are not always fully  clear. National Regulators should, therefore, 
make sure that the exceptional circumstances th at may give rise to a reduced level of home 
delivery are clear and fully understood by mail users. The application and effects of 
derogations under Article 3(3) of the Postal Directive will conti nue to be carefully monitored 
by the Commission in the future. 
The postal network  
Article 3(2) of the Postal Directive requires Member State to ensure that the density of the 
points of contact and of the access points takes account of the needs of users. The Postal 
Directive does not set ou t any specific requirements for USP networks.  
 
EN 14   EN Member States thus have the liberty to formulate their own standards. They can transpose the 
obligation to provide a suff iciently dense network without establishing additional 
requirements. In those Member States that have  established more detailed requirements, three 
categories of standards can be observed. 
 
EN 15   EN Table 2 – Requirements for the Postal Network 
Requirements MS 
No specific requirements CY, ES, GR, IT, LU, MT, RO, SE 
Minimum number of access points CZ, DE, DK, FR, LV, NL, PL, SI 
One access point pe r municipality  BE, BG, DE, FI, HU, LT, LV, SK 
Maximum distance to an access point DE, DK, EE, HU, IE, LT, NL, SK, UK, AT, CZ, FR 
Postal products in the universal service  
The composition and scope of the universal se rvice varies considerably between Member 
States. The majority of the Member States ex tends the scope of the universal service beyond 
regular letter mail and parcel mail to cover am ong others courier servi ces, counter services, 
newspapers, printed matters, addr essed direct mail, bulk mail etc. For example, twenty-one 
Member States (exceptions are AT, CZ, LV, LU, NL and PL) include addr essed direct mail in 
the universal service. In Bulgaria, Poland, Po rtugal, the Slovak Republic and Spain, money 
orders are part of the universa l service. All Member States except Germany have made special 
provisions for mail and lite rature for the blind.  
As regards parcels, eighteen Member States (e xceptions are BE, ES, FI, LT, LU, LV, NL, PL, 
RO) have broadened the universal service by adding domestic postal packages above 10 
kilograms to the universal service.  
Conclusions 
Although universal service requirements vary widely among Member States within the 
framework set by the Postal Directive, the mi nimum requirements set ou t in Article 3 of the 
Postal Directive are fully respected. The provisi ons of the Postal Directive give the Member 
States enough flexibility to adap t the universal services  to the specific na tional situation, i.e. 
the specific economic and geographic situation of the Member States and the needs of 
customers.  
3.2. Reserved area 
The Postal Directive (Article 7)  allows Member States to reserve services to domestic service 
providers to the extent necessary to ensure the maintenance of  the universal service. As a rule, 
the reserved services have to be limited to items of domestic correspondence weighting less 
than 50 grams and with a price less than two and a half times the tariff of an item of correspondence in the first weight step.  
Direct mail and (inbound and/or outbound) cross-border mail may, to  the extent necessary to 
ensure the provision of universal service, continue to be reserved within the same weight and 
price limits.  
 
EN 16   EN In 2007 the European Court of Justice delivered a judgement, International Mail Spain24, 
concerning the application of Article 7(2) and laying down the test of necessity and 
proportionality of reserved area. The ECJ states that Article 7(2) of Directive 97/67/EC must 
be interpreted as allowing Member States to reserve cross-border mail to the universal postal service provider only in so far as they establish that, in  the absence of such a reservation, 
achievement of that universa l service would be precluded  or that that reservation is necessary 
to enable that service to be carried out under economically acceptable conditions . 
At present, all Member States have limited thei r reserved areas to the weight and price limits 
of the Postal Directive. As of 1 January 2008 Germany abolished the remaining reserved area 
bringing the number of Member St ates that have fully liberalised their postal market to four 
(DE, FI, SE, UK).  
Another Member State, the Netherlands, plans to  liberalise in advance of the timetable set by 
the Third Postal Directive, but  the initial date of April 2007 for full market opening has been 
repeatedly postponed. Currently, no  new date has been set. Th e reasons for th e postponement, 
according to the Dutch government relate to VAT differences with Germany and the UK, 
developments in Germany as regards employment  conditions in the post al sector and (unfair) 
employment conditions in the postal sector in the Netherlands. The Commission is analysing 
the situation in the Netherlands and its complia nce with Article 7 of the Postal Directive, 
which allows Member States to reserve servic es to domestic service providers only to the 
extent necessary to ensure the maintenance of the universal service  
No other changes occurred sin ce the 2006 Application Report.  
Table 3 – Services reserved for the USP in the Member States: 
MS Domestic & inbound 
cross border  Direct mail Outgoing cross 
border 
DE, FI, SE, UK Liberalised 
AT, CZ, EE, NL, SI X     
BG, IT, ES X   X 
BE, DK, FR, IE, LT X X   
CY, GR, HU, LU, LV MT, 
PL, PT, RO, SK X X X 
NB: Reservable areas in the weight and price limits of Article 7(1) of the Postal Directive. 
Based on ECORYS, 2008  
As can be seen in the above ta ble the majority of the Member States have a reserved area 
which is substantially smaller than the maximu m limit set by the Postal Directive. The most 
important reason for this seems to be the liberalisation of direct mail which forms a substantial part of the modern letter post. Eight Member States  (AT, BG, CZ, EE, ES, IT, NL, 
SI) have taken the step to liberalised direct  mail while four Member States have fully 
abolished the reserved area (DE, FI, SE an d UK). The liberalisati on of direct mail is 
conducive to the creation of competition as it provides new entrants in  the postal services 
                                                
 
24 See footnote 14. 
 
EN 17   EN market with the possibility to generate more volumes and therefore to benefit from economies 
of scale.  
As confirmed by several studies25 and as already mentioned in  the 2006 Application Report, 
the reserved area per se is increasingly no longe r seen as being necessary for the maintenance 
of the universal service. The practical experien ce in the Member States without a reserved 
area confirms this assessment.  
Conclusions 
All Member States fully respect the requirements of the Postal Directive as regards the weight 
and price limits of the reserved area. The majority of the Member States exceed the 
requirements of the Postal Direc tive and have opened up a larger part of their postal markets. 
In the reporting period, one further Member State, Germany, fully liberalized its postal 
market. This should give an incentive to Member  States still maintain ing a reserv ed area to 
fully open up their postal markets even ahead  of the deadline set of 31 December 2010 set by 
the Third Postal Directive.  
3.3. Licensing and authorisation 
Article 9 of the Postal Directive permits Member  States to introduce au thorisations for postal 
services provided by public and private operators. Postal services refer to the collection, transport, and delivery of corresponden ce, printed matter, and packages.  
– The Postal Directives allows in principle two different levels of  regulatory controls 
depending on whether the postal ac tivities fall outside or with in the scope of the universal 
service.  
– General authorisation: no approval before starting activity; 
– Individual license: approval  before starting activity. 
– For postal activities outside the scope of the un iversal service, general authorisations may 
be introduced to the extent necessary to guarantee the complian ce with the “essential 
requirements”. For postal activities within the scope of the universal service, but outside 
the reserved area, authorisati ons or individual licences may be introduced to the extent 
necessary to guarantee the compliance with the “essential requirements and to safeguard 
the universal service”. Under th e Postal Directive a Member St ate might also refrain from 
establishing authorisation procedures altogether.  
– As regards the application of this provision by the Member States, four approaches to 
authorization of postal operators inside the uni versal services area ca n be distinguished: 
– No authorisation procedure; 
– General authorisation procedure; 
                                                
 
25 "An assessment of the cost and benefits of Consignia's current Universal Service Provision", Postcomm, 
June 2001; "Analysis of costs of un iversal services in the postal sect or", Öhrlings, Coopers & Lybrand, 
October 1996; Committee report of the development of the Swedish postal market, January 2005, 
[http://www.pts.se/en-gb/News/Post/2005]. 
 
EN 18   EN – Individual licences for some or all letter post services; 
– Individual licences for all universal services. 
– An overview on the application of the licensing  and authorisation regimes in the various 
Member States is provided in the table below.  
Table 4 – Overview of licensing and author isation insider the uni versal service area 
Type of authorisation MS 
No authorisation procedure CZ, NL 
General authorisation AT, DK, IE, SK 
Individual license for some or  all letter post services  DE, FR, PL, SE, UK 
Individual license for all universal services BE, BG, CY, EE, ES, FI, GR, HU, IT, LT, LU, LV, 
MT, PT, RO, SI 
Based on ECORYS, 2008  
The majority of the Member States make use of the possibility to require an individual license 
for all services within universal services. This  is the strictest possi ble approach under the 
Postal Directive. However, several of the larg er Member States, such as Germany, France and 
the UK, only require an individual license for (part of the) letter post services. Two Member 
States (CZ and NL) do not apply any authorisa tion procedure. There has been no substantive 
development in terms of author isation and licensing procedures  in the reference period.  
As regards Slovenia, it should be clarified, in relation to th e 2006 Application Report, that 
Slovenia has a system of individua l licence for services inside the scope of universal service. 
However this difference is for the purposes of  clarification and should not be seen as a 
material change as the licensing system was not changed from the 2006 Application Report. 
As noted above, within the universal service area  authorisation procedures can be applied to 
the extent necessary to guarantee the essential requirements and to safeguard the universal service. The granting of an authorisation can only be made subject to certain obligations. 
It can be observed that obliga tions imposed on postal operator in order to be able to operate 
within the universal service area differ signi ficantly among the Member States. Whereas in 
some Member States, such as the Czech Republic and the Netherlands, they do not have any specific obligation, in other Member States they  are subject to obligations related to the 
safeguard of the universal service for example, the obligation to provide all or part of the 
universal service.  
As already stated in the 2006 Application Report , the large divergences in the authorisation 
procedures and related obligations for obtaining an authorisation may prove problematic from 
an Internal Market perspective. There is also the risk that the obligations which are imposed 
on new entrants may constitute a market barrier  and hinder competition. With the further 
opening up of the markets and full mark et opening by 31 December 2010, the issue of 
licensing and authorisation procedures and related obligations will become more important.  
Compensation Funds 
 
EN 19   EN Article 9(4) of the Postal Directive states that " [I]n order to ensure that the universal service 
is safeguarded, where a Member State determines  that the universal se rvice obligations, as 
provided for by this Directive, represent an unfair financial burden fo r the universal service 
provider, it may establish a compensation fund administered for this purpose by a body 
independent of the beneficiary or beneficiarie s. In this case, it may make the granting of 
authorisation subject to an ob ligation to make a financial co ntribution to that fund. […]" 
The aim of such a fund is to cover any unec onomic cost of the provision of the universal 
service obligation incurred by the USP. An aut horisation or licence, for services within the 
scope of the universal service, may therefore be granted to an operator subject to an obligation 
to contribute to a universa l service compensation fund. A compensation fund may only be 
used to finance those activities falling w ithin the scope of th e universal service. 
Several Member States have made provisions for setting up compensation fund arrangements 
to ensure the financing of the universal services obligation but  so far only Italy has actually 
established one. With the rese rved area to be abolished by  31 December 2010 and thus no 
longer available finance the universal service,  the issue of compensation fund will become 
more important. Some Member States are alre ady preparing legislation for a compensation 
fund.  
Conclusions 
There are large divergences in the authorisation and licensing procedures as well as regards 
the related obligations for obtai ning an authorisation or license. This may prove problematic 
for the Internal Market. More transparency on th e obligations and their effect on new entrants 
is desirable. Obligations must not lead to market entry barriers and thereby undermine the 
objectives of the EU postal reform.  
The practical use of compensation funds has so far been limited. However, with full market 
opening, further consideration may be needed in the future to see how to make this optional 
tool more operational. 
3.4. Access to postal networks  
Access refers to access by third parties to the postal network usually owned by the incumbent 
postal operator. It concern access to the postal de livery network, in particular to the sorting 
and delivery facilities, as  well as access to the postal infrastructure, such as the letterboxes of 
individual consumers and businesses, P.O. boxes,  the address database, the postal code system 
and the possibility to redirect (wr ongly addressed or  returned) mail. 
The Postal Directive does not impose speci fic access rules, although it empowers the 
Parliament and the Council, acting on a proposal from the Commission, to adopt 
harmonisation measures in the field of acce ss to the public postal network, whenever 
necessary (Article 11 of the Postal Directive). 
In addition, Article 12 on tariff pr inciples, fifth indent, of the Po stal Directive already states 
that whenever USPs apply special tariffs, they shall apply the principles of transparency and 
non-discrimination with regard both to tariffs and to the associated conditions. The tariffs 
shall take account of the avoided costs and sha ll apply equally both as between different third 
parties as between the third pa rties and USPs supplying equivale nt services. Any such tariffs 
shall also be available to private cu stomers who post under similar conditions. 
 
EN 20   EN In March 2008, the European Court of Justice has delive red an important judgment, Vedat 
Deniz26, concerning the application of the fifth indent  of Article 12 of the Postal Directive and 
the test of non-discrimination as  laid down in this provision. Th e ECJ clearly established that 
different treatment of large mailers and cons olidators is not objectively justified and is 
therefore discriminatory. 
Access to the postal delivery ne twork ("Downstream access") 
A common issue as regards acce ss is "downstream access" to th e physical network. As postal 
markets become more competitive, some privat e operators and their customers have sought 
access to portions of the public postal network w ithout paying for the use of the entire system. 
Downstream access can take place at  different points of the postal supply chain. It can consist 
of access to inward or outward sorting centres  or delivery offices (see figure below).  
Figure 1 – Access to the postal supply chain: 
Collection  OutwardSortingInwardSortingDelivery  Transport
Street letter boxes  Postal outlets  OutwardSorting facilitiesInwardSorting facilitiesDelivery  Offices  P.O. Boxes Processes  
Facilities  of USP  
Downstream access pointsPublic access  points
   
WIK, 2006 
It is argued that notably downstream access coul d help facilitate market entry for upstream 
consolidators. New competitors who want to establish a delivery network could also use 
access for a transitional period to build up customer relationships and volumes, before being able to compete end to e nd with the incumbent.  
Using this model, consolidators and competitors, as well as major business customers could 
already deliver part of the value chain proces s before handing mail over to the incumbent.  
The special tariffs mentioned in Article 12, fift h indent, may be consider ed as applicable to 
downstream access and the principles of tran sparency and non-discrimination have been 
specifically enshrined in the Postal Directive.  
As the Postal Directive does not determine how access should be provided, Member States 
have different policies on whether market domin ant operators (incumbents) should be obliged 
to provide access to third parties.  
Three (main) kinds of downstream access and downstream access regulation can be 
distinguished in practice: 
– Mandatory access with ex-ante regulation of the access conditions (access points, terms, 
prices); 
                                                
 
26 See footnote 13.  
 
EN 21   EN – Mandatory access with market participants negotiating the terms and conditions and 
potential interference of the NRA if  no access agreement can be reached; 
– Freely negotiated access. 
– Currently, ten Member States (BG, DE, DK,  ES, FR, HU, MT, PT, SI and UK) have 
granted the NRA authority to require dow nstream access to the public postal network 
under appropriate circumstances. Compared to the situation described in the 2006 
Application Report two years ago, th e following changes have occurred: 
– Germany switched from ex ante regulation of access conditions to ex post regulation since 
2008. Germany was the only Member State to  regulate the access prices ex ante. 
– Mandatory access regimes have been inst ituted in Bulgaria, Malta and Spain.  
– In the Netherlands, access will be mandatory under the (not yet enacted) new postal law.  
The UK NRA Postcomm has particularly been active on access arrangeme nts and developing 
a licensing regime for new entrants. Postcomm wa s heavily influential in encouraging Royal 
Mail to agree access arrangeme nts with new operators and large customers.  
– Access to the postal infrastructure  
– Another important access issue concerns access to  key elements of the postal infrastructure 
such as post office boxes, address databases, buildings and letter boxes as well as to the 
determination of postal codes and to redirection and return -to-send services. Access to 
such infrastructure will be of increasing impor tance in a multi-operator environment. If no 
appropriate access to the postal infrastructure  is provided for third parties, this can 
constitute a market entry barrier.  
– Access to letterboxes was, and part ly still is, a problem in a number of Member States (AT, 
FR, PL, SK and to a less extent DE). For exam ple, in Austria, Austrian Post is the only 
provider that holds the key that is required to obtain access to pr ivate letter boxes. In 
Germany, the same problem with in-hose lett erboxes that are not publicly accessible can be 
observed, albeit for a relatively small number of delivery addresses. A similar problem 
existed in France. However, a public consu ltation has been conducted by the French NRA 
ARCEP, resulting in a compromise solution by wh ich all licensees will be given access to 
the access codes (managed by La Poste) in orde r to be able to deliv er to letterboxes.  
Conclusions 
Arrangements for downstream access vary sign ificantly among Member States. A trend 
towards mandatory access can be observed. NRAs pl ay an important role in this context. In 
particular, they have to ensure that access conditions to the postal infrastructure do not 
constitute a market entry barrier.  
 
EN 22   EN 3.5. Tariff principles 
3.5.1. Tariff regulation and USP tariffs 
Tariff regulation 
Article 12 of the Postal Direct ive requires each tariff for univers al service to be affordable, 
geared to costs, transpar ent, and non-discriminatory. 
Special tariffs with individual customers ar e permitted but should conform to the same 
principles. In particular , specials tariffs must: 
– take account of the avoided costs; 
– apply equally between third parties and be open to private customers who use postal 
services under similar conditions. 
Cross-subsidisation of universal services outs ide the reserved sector using revenues from 
services in the reserved sector shall be prohibited except to the ex tent to which it is shown to 
be strictly necessary in order to fulfil specific universal service obligations imposed in the competitive area. 
In principle, all Member States have adopted  procedures and standards for regulating the 
prices for key universal services so that they comply with the general standards of the Postal 
Directive.  
The Commission's 2005 and 2006 Application Repor t already observed a fragmented picture 
in terms of the actual degree of price control across the Comm unity. In effect, Member State 
have developed a variety of price control mechanisms.  
There are three basic procedures applied by Me mber States: "ex ante " requiring the USP to 
obtain approval of the NRA before implementi ng a price change; "price cap" permitting the 
USP to change prices accordin g to a pre-approved level or fo rmula and "ex post" allowing the 
USP to change prices but w ith the possibility for the NR A to modify any changes.  
A distinction based on which categ ories of services are covered by price regulation: reserved 
services, universal servic es, other postal servi ces, can also be made. 
Finally there are also different forms of how NRAs set benchmark pri ces for determining USP 
prices. These are RPI (retail pr ice index),"minus costs" and RP I plus" costs. An RPI regime 
means that price increases by the USP are limited to the increase of the retail price index. An 
RPI minus X regime means that price increases by the USP are limited to the increase of the 
retail price index minus a factor of X which provides for ef ficiency improvements. This type 
of regime stimulates an USP to improve its pr oductivity. An RPI plus re gime means that price 
increases by the USP are limited to the increase of  the retail price index plus a factor of X. 
This regime is rarely used. If the form of cont rol is based on costs, the NRA sets the tariffs on 
the basis of costs using past costs, effici ent costs or future costs as a benchmark. 
Price regulation of reserved services All Member States with a reserved area have a price regulation scheme  in place. Where a 
reserved area is retained, all but five Member  States (BE, BG, LT, NL) require "pre-approval" 
 
EN 23   EN (ex ante) by the NRA before implementing any pr ice changes. Belgium has a price cap regime 
of the reserved area, with prices reviewed ex post. Of the Member State with a reserved area, 
only Portugal applies a RPI minus regime.  
Price regulation of universal services All Member States except Luxembourg have a price control on thei r universal service 
provider. It should be recognized  that the definition of univers al service obligation services 
varies from Member State to Member States. Sw eden appears to have just one control, this 
being a cap in the form of RPI on the single first class items up tot 50 grams.  
Price regulation of other postal services Four Member States (BE, CY, DE, and the UK) have price regulation on  postal services that 
are neither reserved nor universal  service. Cyprus has ex-post pr ice reviews of those services 
provided by the USP that are outside the USO de finition and Belgium has maximum tariffs or 
tariff formulas for non-USO products. In Germany, in cidental services have to be verified ex-
ante by the NRA whilst in the UK the majority of the bulk mail services (non-USO) are price 
regulated via a product “basket” with an RPI-minus formula. 
As regards price regulation in the Member St ates where postal services have been fully 
liberalized, the USP within the UK has a complicat ed form of RPI minus price regulation that 
extends beyond the USO area and includes access se rvices. This contrasts significantly with 
the other liberalized markets. In Finland, the US P is free to set its own prices, subject to ex 
post review and in Sweden it is only the first class single item mail that is subject to price 
control. In Germany, since January 2008 the price of bulk mail services ( ≥ 50 items) does not 
have to be approved ex-ante, but is subject to  ex-post price control. Until the end of 2007, the 
access tariffs were regulated ex ante in Germany. 
Only three Member States, DE, PT and the UK , stimulate efficiency improvements through 
using an RPI minus regime for (part of) the pric es that are regulated. The fact that many USPs 
have a price cap linked to RPI or face cost base d price regulation has as a consequence that in 
most Member States price regulation provides little or no incentive for the USPs to reduce 
costs. Uniform tariffs remain the nor m across Member States for USO.  
To conclude, putting the pricing pr inciples of the Postal Directiv e and particularly the aim of 
affordable, transparent prices geared to costs into practice will require further attention from 
Member States. Price control constitutes a co mplex issue that is no t only dependent on the 
modalities of how it is carried out but is al so dependent of the appropriate price data 
collection. Price control is th erefore one of the issues where enhanced administrative 
cooperation between NRAs could be of particular value. 
USP tariffs 
Tariffs vary significantly among Member Stat es. The figure below gives an overview of 
prices in form of the USP tariff at the first weig ht step for letter post. Where a choice of class 
(first or second) exists, it is the first class mail product that is included here. 
 
EN 24   EN Figure 2 – USP Tariffs for first weight step (in EUR) in 2007 
0,000,100,200,300,400,500,600,700,800,901,00
AT BE BG CY CZ DE DK EE ES FI FR GR HU IE IT LT LU LV MT NL PL PT RO SI SK SE UKEUR
Note: Figures for Spain for second class tari ff; Figures for Romania and Sweden for 2008. 
Based on ECORYS, 2008  
Tariffs vary significantly from below 0.20 EUR in Malta to 0.70 in Finland. In general, tariffs 
tend to be lower in the new Member States (EU 12) than in the old Member States (EU15).  
Tariffs measured in EUR may not always pr ovide good information on the affordability of 
prices of postal services for consumers and bus inesses, as they do not take into account the 
general price level and wage level in the Member States concerned. With respect to affordability, the tariffs measured in purchasin g price standards (PPS), i.e. tariffs in EUR 
converted using Purchasing Power Pari ties, provide a di fferent comparison. 
 
EN 25   EN Figure 3 – USP Tariffs for first we ight step (in PPS) in 2006 and 2007 
0,000,100,200,300,400,500,600,700,800,901,00
AT BE BG CY CZ DE DK EE ES FI FR GR HU IE IT LT LU LV MT NL PL PT RO SI SK SE UKPPS2006
2007
Note: Figures for Spain for second class tari ff; Figures for Romania and Sweden for 2008. 
Based on ECORYS, 2008  
The data presented above suggest that postal serv ices are relatively costly for consumers in 
Poland, Lithuania and Slovakia. On the other hand, postal services are relatively cheap for 
consumers in Malta and Slovenia.  
The tariff for a postal item in the lowest weight  step transmitted by fasted standard category 
can be considered the most basic measurement for the price of postal services. But it should 
be kept in mind that several factors mitigate against a useful comparison for example, in some Member States second class priority service is also offered. Also postal tariffs including VAT 
are not fully comparable due to different VAT rates in the Member States. In addition, large users may enjoy significant discoun ts. Finally, it should be borne in  mind that the service that 
customers get for this tariff may differ among Me mber States, due for example to different 
delivery frequencies.  
As regards consumers' percepti on of the affordability of posta l services, according to the 
Special Eurobarometer of July 2007
27, 87% of EU-25 considered postal services affordable, 
while 6% considered them not affordable. In  Greece, 99% of citizens considered postal 
services affordable compared to a 72% in Finland.  
The marked differences between the perceptions in  the Member States can partly be explained 
by objective developments such as price change s but some developments might well not be 
related to the real price levels . In addition, it should be borne in mind that the Eurobarometer 
                                                 
27 Special Eurobarometer 260 Services of general interest, July 2007  
[http://ec.europa.eu/public_opinion/archives/ebs/ebs_260_en.pdf] 
 
EN 26   EN only covers individual citizens wh ile a large part of users of postal services are businesses. 
Also it should be recalled that spending on postal services only constitutes a small percentage 
of a household's budget.  
3.5.2. Terminal Dues  
Terminal dues are the remuneration postal operato rs pay to each other for the delivery of 
cross-border mail in the country  of destination. Article 13 of Postal Directive requires 
Member States to encourage their USPs to arrange that in their agreements on terminal dues for intra-Community cross-border mail, th ree main principles are respected:  
– The terminal dues shall be fixed in relation to costs of processing and delivering incoming 
cross-border mail; 
– The level of remuneration shall be related to the level quality of service achieved; 
– Terminal dues shall be transp arent and non-discriminatory. 
The REIMS agreement
28 is the instrument used by certain European public pos tal operators to 
collectively determine terminal dues rates. The REIMS agreement has obtained individual 
exemption from antitrust rules twice as the Commission determined that conditions for 
individual exemptions as laid down in Arti cle 81(3) of the EC Treaty were satisfied. 
The second exemption of the REIMS agreem ent expired by the end of 2006. Due to the 
reform of antitrust legislati on and the adoption of the Council Regulation (EC) No. 1/2003 of 
16 December 2002 on the implementation of the rule s on competition laid down in Articles 81 
and 82 of the Treaty29, any new agreement on terminal dues would not require an exemption 
by the European Commission ex-ante. Neverthe less, it would have to comply with the 
conditions of Article 81(3) of the EC Tr eaty, which is now directly applicable 
At the same time parties to this kind of an agre ement have to comply with the requirements of 
Article 13 of the Postal Directive, which are: cost orientation of terminal dues, link to the 
quality of service and transparency and non-discrimination of the agreed system. 
3.5.3. Value Added Tax 
Under the VAT Directive (Directive 2006/112/ EC , Articles 132(a) and 135(1)(h)) the 
provision of certain services by public postal serv ices and the supply at face value of postage 
stamps for use for postal services are exem pt from VAT. Since the 1970s when these 
provisions origina lly were adopted30 the Community legal framework as regards postal 
services has fundamentally changed following the Postal Directive in 1997 (and amended in 
2002 and 2008). Meanwhile, the postal VAT exemption has remained in force. 
                                                 
28 Until now there were two REIMS agreements co ncluded: REIMS II and renewed REIMS II.  
29 OJ L 1, 04.01.2003, p.1. 
30 Sixth Council Directive 77/388/EEC of 17 May 1977 of the harmonization of the laws of the Member 
States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, OJ 1977 L 145, p.1, which was replaced  as from 1 January 2007 by C ouncil Directive 2006/112/EC of 28 
November 2006, on the Common system of value added tax, OJ L 347, 11.12.2006. p. 1. The latter 
Directive is effectively a recast of the Sixth Council Directive of 1977 as amended over the years. 
 
EN 27   EN The VAT exemption is applied in a variety of ways by Member States: some exempt all 
postal services supplied by the USP; others exempt  all services comprise d within the universal 
service obligation; yet others exempt those servi ces which have been rese rved to the USP, and 
lastly, three Member States le vy VAT on all postal services.  
 
EN 28   EN Table 5 – Postal services exempted from VAT  
Postal services 
exempted from VAT Member States  
No services FI, SE, SI  
Reserved services ES, LV  
Universal services BE, BG, CZ, DE, DK, EE, 
FR, GR, LT, LU, MT, NL, 
SK  
All postal services 
provided by USP AT, CY, HU, IE, IT, PL, 
PT, RO, UK  
 
The vast majority of USPs benefits from a VAT exemption. Such an exemption gives the 
USPs a competitive advantage over other posta l operators vis-à-vis customers which cannot 
recover the VAT they have been charged, e.g. final consumers or traders engaged in VAT exempt activities. The scope of the application of the VAT exemption varies however widely. 
The uneven application of the exemption and the distortions of competition occurring between UPSs that benefit from the exemption a nd other operators that do not, are considered 
an important obstacle to achieving effectiv e and non-distorted comp etition in the postal 
sector.  
To counter this situation th e Commission proposed already in 2003 to remove the current 
VAT exemption on public postal services and postage stamps while introducing and option 
for Member States to apply a reduced VAT rate to  a wide range of postal services in order to 
limit the impact of the tax on final consumers
31. Despite its obvious significance for a level 
playing field in a liberalised market for posta l services, there has been no progress in the 
Council on this proposal. In fact , the proposal has not been di scussed in the Council since 
2004. Its adoption is now more pressing since the Th ird Postal Directive se ts a definite date 
for the full liberalization of the national posta l markets. As to further discussions in the 
Council, it is very much in the hands of th e Council to decide whether or not to resume 
negotiations. The Commission has re peatedly signalled its interest and readiness to resume 
negotiations and to contribute in a co nstructive manner for a common solution. 
In the meantime the Commission needs to ensure the uniform application of the existing VAT 
postal exemption across the Community. It is the Commission's understanding that the 
exemption should apply only within the limits of the strict discharge of  the universal service 
obligation and not in other areas. For this reas on, the Commission has sent letters of formal 
notice to the UK, Germany and Sweden in April 200632 about the unsatisfactory way in which 
the current provisions are being implemented in those Member States. In July 2007, the 
Commission opened the second stage of infri ngement proceedings against these Member 
                                                 
31 COM (2003) 234 as amended by COM (2004) 468 Proposal for a Council Directive amending Directive 
77/388/EEC as regards value added tax on services provided in the postal sector. 
32 Commission Press Release IP/06/484 of 10 April 2006. As explained there, the Commission regards 
these cases are test cases which show the negative effects non-harmonized application of VAT rules has 
for the internal market.  
 
EN 29   EN States by sending a reasoned opinion33 to them. It is important to add that a referral for a 
preliminary ruling regarding the scope of the VAT  exemption for postal services is currently 
pending before the ECJ (Case C-357/07). 
                                                 
33 Commission Press Release IP/07/1164 of 24 July 2007. 
 
EN 30   EN Conclusions 
The Postal Directive can be considered as having been largely transposed. However, the 
Postal Directive provides the Member States with  significant flexibility as how to apply tariff 
principles. Consequently, the appl ication of the Postal Directive in this field varies widely 
among Member States. 
Given the importance of tariff regulation, tariffs, terminal due s and VAT in a liberalized 
market and for the creation of co mpetition, this area should be cl oser looked at in the future.  
3.6. Transparency of accounts 
Article 14 of the Postal Directive requires the following with respect to the transparency of 
accounts of the USPs: 
– Separation of USP accounts (reser ved and non-reserved servic es, universal services and 
non-universal services);  
– Allocation of costs according to accounting system s as defined in this Article of the Postal 
Directive; 
– Statement of compliance by a competent independent body;  
– USPs to disclose detail ed accounting data to NRA and Commission on request. 
In addition, Article 15 require s the publication of USPs fina ncial accounts af ter these are 
reviewed by an independent auditor. 
All Member States have transposed the accoun ting obligations resulting from the Postal 
Directive. However, as already pointed out in past application reports, the level of 
transparency of USPs costs data an accounti ng is extremely varied among Member States and 
therefore very inconsistent. This concerns the level of accounting deta il, as well as which 
separate accounts are required and the way of allo cating costs. It has to be repeated again, 
that, in practice, transparency of accounts is still on ly being partially imp lemented in most 
Member States. 
Cooperation between NRAs is important in this area to exchange  best practices.  
It is worth noting the efforts undertaken by the European Committee for Postal Regulation 
(CERP) to devise guidelines for the imple mentation of cost allocation principles. 
Conclusions 
The Postal Directive's objective on a transpar ent cost allocation system of the universal 
services providers still needs to be fully reac hed. This conclusion already drawn in the 2006 
Application Report still remains valid.  
 
EN 31   EN 3.7. National Regulatory Authorities (NRAs)  
Article 2 (18) of the Postal Directive defines NRAs as “the body or bodies, in each Member 
State, to which the Member State entrusts, inte r alia, the regulatory functions falling within 
the scope of this Directive.” Article 22 of the Po stal Directive requires each Member State to 
designate one or more NRAs for the postal s ector that are “legally separate from and 
operationally independent of th e postal operators”. According to the same Article, NRAs 
“shall have as a particular task ensuring co mpliance with the obligations arising from this 
Directive and shall, where appropriate, establis h controls and specific procedures to ensure 
that the reserved services are respected”. 
The effective operation of the (c ompetition and) regulatory author ities is crucial for the proper 
functioning of the postal ma rkets. Whereas the independence of the NRAs is a key 
requirement of the Postal Directive and a pre- requisite for its effective operation, there are 
further issues of significant importance such as  the mandate of as well as, the powers and 
resources attributed to the NRAs.  
All Member States have some form of NRA a ll of which are formally independent from the 
postal operator. However, some NRAs may stil l be under ministerial control. However, it 
seems that this formal independence is not always fully respected when it comes to the daily operations of the NRA in some Member States.  
Compared to the situation described in the 2006 Application Report, the main changes are the 
establishment of the Austrian Regul atory Authority for Broadcasting and 
Telecommunications (Rundfunk und Telekom Regulierungs-GmbH (RTR-GmbH)) as NRA 
for postal affairs in Austria as of 1 January  2008. Before 2008, the regu latory tasks in the 
Austrian postal market were governed by th e Ministry of Transport, Innovation, and 
Technology. 
As in almost all other cases the Austrian NRA is also a multi-sector regulator. Apart from the 
postal sector, most European NRAs regul ate electronic communications services, 
broadcasting, road transport or energy and ga s. This might help to take into account 
experiences gained in ot her network industries.  
In Estonia, there was a reorganisation of a number of regulatory institutions in January 2008 
and currently the NRA for posts is the Est onian Competition Authority (Konkurentsiamet).  
The resources of postal NRAs vary enormous ly among Member States even among Member 
State of roughly the same size. This can be  seen by the number of staff employed or 
responsible for the postal market especially in case of multi-sector regulators. Whereas in the 
UK the number of staff regulating the postal ma rket amounts to 60 FTE (full time equivalent), 
some smaller Member States only have 1-3 FTE.  
The powers of the NRAs also vary among Member States. This concerns the data that they 
can require from USPs incl. requiring specifi c accounting systems, enforcement powers such 
as cancelling unlawful rate or  levy fines and other powers , such as for example the 
competence to require downstream access (s ee chapter 3.4. above on downstream access).  
NRAs have a substantial role to play in the European postal sector in  order to preserve a 
universal service in line with the Postal Di rective and to enable the development of 
competition. It appears that by the far the vast majority of the NRAs cu rrently still focus on 
 
EN 32   EN ensuring the provision of the USO. With posta l markets opening up and the road set for full 
market opening, the role of the NRA will increas e. The inequality in the overall level of 
resources attributed to them and the divergences of the mandates of the NRAs thus gives rise 
to concern. It seems doubtful that all NRAs ar e adequately equipped to  fulfil their tasks. 
Conclusions 
All Member States have independent NRAs but it seems that this is not always respected in 
the daily operation of the NRA in all Member States. The mandate, resources and powers of 
the NRAs also vary significantly among Member States. The importance of the role of NRAs 
and their competencies under the Postal Directive should oblige Member States to allocate 
necessary resources to these independent sectoral regulators in order to preserve benefits of 
the full market opening and at the same time sa feguard the provision of the universal postal 
service. Member States should further stre ngthen the position of National Regulatory 
Authorities and to ensure the allocation of the necessary resources. Administrative 
cooperation among NRAs should be promoted to  allow exchange of best practices and 
benchmarking.  
3.8. Quality of services – Routing time 
One of the key aims of the Postal Directive an d a core objective of EU Postal Reform is to 
improve the quality of Community postal services . In order to establis h whether this objective 
is indeed realised, Article 16 of the Post al Directive requires Member States to “ensure that 
quality-of service standards are set and published in  relation to universal service in order to 
guarantee a postal serv ice of good quality” . 
Each NRA is required to monitor the performance of the USPs in order to ensure they comply 
with the prescribed standards. Whilst the Postal Directive does not prescribe penalties when quality targets are not met, each NRA is  required to take corrective action.  
In terms of setting the quality of service standa rds, Article 16 of the Postal Directive states 
that quality standards are to focus, in partic ular, on routing times and on the regularity and 
reliability of service. Each NRA has disc retion under certain circumstances such as 
infrastructural difficulties or geography, to allow derogations fr om adopted quality standards. 
Whilst the Directive does not prescribe the method for measuring quality standards, it does 
require adequate measuring of quality, and that  an evaluation procedure is put in place.  
As to the scope of the application of quality of  service standards, Article 16 requires Member 
States to set quality of service targets for all universal services, including services for 
correspondence, newspapers, magazines and par cels. In reality, howev er, the coverage of 
transit time targets, which is the most importa nt category of quality of service standards, 
varies widely across Member States.  
Domestic transit times 
Standards for domestic transit time are usuall y set as D + n (D+1, D+2 and D+3), where D 
represents the date of deposit and n the numbe r of working days which elapse between that 
date and the date of delivery to the addressee. The table be low indicates the transit time 
targets for domestic priority mail as set by the different Member States as well as information 
on the actual transit times r ealised by the USPs in 2006. 
 
 
EN 33   EN Table 6 – Regulation and performance of rou ting times of domestic priority mail (2006) 
Regulation Performance MS 
D+1 D+2 D+3 D+1 D+2 D+3 
AT 95 98 100 (1)96.1 unknown Unknown
BE 95 97 92.0 98.3 
BG (2) 78 90 95 88.7 98.0 99.8
CY 90 97 63.6 93.6 
CZ 90 94.1  
DE 80 95 unknown 95.9 
DK 93 94.0  
EE 90 90.5  
ES unknown 93 99 56.1 89.9 Unknown
FI 85 98 95.7 99.2 
FR 85 95 81.2 97.2 
GR 86 98 80.0  97.4
HU (3) 95 97 91.8 99.6 
IE 94 99.5 77  97
IT 88 88.1  
LT 85 97 67.8  97.6
LU 95 99 97.3 99.9 
LV 97 95.6  
MT 92 94.9  
NL 95 96.6  
PL 82 90 94 68.0 87.0 94.4
PT 93.5 94.7  
RO 85 97 unknown unknown 
SE 85 97 95.4  Unknown
SI 95 99.5 88.0 99.4 
SK 96 96.5  
UK 93 94  
 Notes: 
 (1) D+4 
 (2) Bulgaria has different standards fo r different mail items [see p. 63 ECORY] 
 (3) Hungary has different standards for different mail items [see p. 63 ECORY] 
Based on ECORYS, 2008  
The above table shows that all Member States ha ve set quality of service (transit time targets 
D+1) except Spain. The majority of the Member State also has transit time targets for D+2 
and several Member States have in a ddition transit time targets fro D+3.  
Targets vary significantly ranging for D+1 for ex ample from 78% in Poland to 97% in Latvia. 
Also the actual performance of a transit time of D+1 sees a large variation among Member 
States.  
 
EN 34   EN Several Member States have difficulties reaching the D+1 transit time target, however in these 
Member States only the standard for the fastes t transit time is not met, while all other 
standards (for D+2 or D+3) are met.  
Cross-border transit times 
Minimum standards for intra-community cross-border  services are set by the Postal Directive. 
Annex 1 of the Postal Directive provides that for cross-border postal items sent by the fastest 
standard category, 85 percent of  the mail must be delivered by the third working day after 
posting. A second requirement is th at 97 percent of such mail must  be delivered by the fifth 
day after posting. These targets should be ach ieved both as an overa ll average and in each 
bilateral exchange between Member States. 
A system to measure the cross-border transit tim es is the UNEX system for measuring letter 
service performance which was introduced by IP C (International Post Corporation) in 1994. 
Until 2004 the UNEX monitoring system include d the EU15 plus Iceland, Norway and 
Switzerland. Since 2005 it the UNEX system incl udes all EU27 expect Bulgaria, which will 
be included from 2008 onwards, as we ll as Iceland, Norway and Switzerland.  
The figure below shows the overall trend in tr ansit time performance over the last years 
measured in terms of D+3.  
Figure 4 - Cross border intra-community D+3 in EU 15 and EU29  
85,692,593,7
93,194,2 94,1
80859095
1998 2000 2004 2005 2006 2007% 
IPC34 
                                                 
34 Results 2002-2005 based on UNEX-18 (EU15 + Iceland, Norway, Switzerland); 2005 -2007 based on 
UNEX-29 (EU27 without Bulgaria + Iceland, Norway, Switzerland). 
 
EN 35   EN The above figure shows that on average cross-border se rvices of postal oper ators continued to 
be performed to a high level in 2007. 94% of cross-border mail was delivered within three 
working days, thus exceeding si gnificantly the target of 85% set by the Postal Directive.  
The improvements registered since the implementation of the first Postal Directive 97/37/EC 
can be seen in the following figure which co mpares the cumulative performance in 1994 and 
2007 for EU15 plus Iceland, Norway and Switzer land, which are the countries monitored by 
UNEX since 1994. 
Figure 5 – Cumulative performance in 1994 and 2007 for EU15 plus ICE, NO, CH35  
7,743,5
15,898,9 99,3 99,5 97,9
82,394,9
9896,2
92,4
84,3
69,1
0102030405060708090100
D+1 D+2 D+3 D+4 D+5 D+6 D+7%
2007 UNEX-18 1994 UNEX-18 
 IPC, 2006 
D+3 performance for UNEX-18 went up fr om 69.1% in 1994 to 94.9% in 2007. D+5 
performance increased from 84.3% to 97.9%.  
While the overall picture is posi tive, individual results for bilate ral flows between a number of 
Member States are less so and some pe rformances may give rise to concern. 
Conclusions 
Overall, quality in terms of transit time has further improved at both the national and 
European level. However, as regards cross-bor der transit times, the situation differs among 
Member States and developments  should be closely followed.  
                                                 
35 http://www.ipc.be/index.php?option=com_ content&task=view&id=43&Itemid=152 . Results are for 
UNEX-18i.e. EU-15 plus Switzerland, Iceland and Norway. 
 
EN 36   EN 3.9. Complaint and redress procedures 
Article 19 of the Postal Directive requires Memb er States to ensure that there are adequate 
consumer protection measures in place and th at complaints about poor universal postal 
service are handled through transp arent, simple and inexpensive procedure. This concerns in 
particular cases involving loss, theft, da mage or non-compliance with service quality 
standards. 
The Postal Directive lays down tw o key procedural requirements to ensure that there is clarity 
in complaint handling. The first is for Member States to ensure that USPs publish details on the number of complaints received and how thes e complaints were dealt with and resolved. 
The second is for Member States to ensure there is an appeal mechanism which allows complaints to be brought before “the competent national authority”  in cases where 
grievances were not adequa tely resolved by the USP. 
Despite the establishment of complaint procedures – which have in part also been extended to 
competitors – in practice there seems to be  still dissatisfaction am ong citizens about the 
handling of complaints
36. According to the Special Eurobarometer 200737 43% of the 
respondents say that their complain ts have been dealt with badly and 53% state th at they have 
been dealt with well. It shoul d however be noted that figures improved compared to the 
situation two years earlier when 53% of the respondents said that  their complaints have been 
dealt with badly and 44% state that they have been dealt with well. 
The adoption and enforcement of the CEN st andard on measurement of complaints and 
redress procedures38 should considerably contribute to  improving the current situation. 
Conclusions 
Although consumer satisfaction as regards the handling of complaint procedures has 
improved, the implementation of the provisions in  the Postal Directive relating to complaint 
and redress cannot yet be considered to be fully  satisfactory for all c onsumers. Complaint and 
redress procedures are particularly important  for end consumers and SMEs, both of which 
have very limited or no bargaining power and the ro le of NRAs is of particular importance in 
this regard. 
3.10. Technical standards 
In line with Article 20 of the Postal Dire ctive, the harmonisation of technical standards 
continues and shall in particul ar take into account  the interests of us ers. The European 
Committee for Standardisation (CEN) is entrus ted with drawing up the technical standards 
applicable to the postal sect or. The Commission entr usts CEN through issuing standardisation 
mandates.  
CEN has focused its work on technical harmonisation and aims to “increase the 
interoperability of postal networks in Member States39 and to improve the availability of 
                                                 
36 According to Special Eurobaromete r (2005) 53% of the respondents say that their complaints have been 
dealt with badly and 44% state that they have been dealt with well. 
37 See footnote 27.  
38 Standard EN 14012: Measurement of complaints and redress procedures. 
39 See Recital 36 of the Postal Directive. 
 
EN 37   EN services offered to users.”  The Postal Directive also requires the Postal Directive Committee 
to assist the Commission in de veloping measures on technical st andardisation (Article 20 and 
21 of the Postal Directive). 
NRAs must ensure that the implementation of  the mandatory technical standards (by the 
organisations concerned) is completed in compliance with agreed principles, within the regulatory deadlines and in a transp arent and non-discriminatory manner. 
As regards quality of service, CEN has a dopted a number of st andards, notably: 
– EN13850: Measurement of transit time of end-to -end services for sing le piece priority 
mail and first class mail. 
– This key standard has been developed in order to provide a standardised technique 
that can be used throughout  Europe to measure the transit time for priority and 
first class mail through samples represen ting real mail flows. It specifies 
conditions for independent measurements  of end-to-end tran sit times with a 
unique method at the European level whic h is valid for both national and cross-
border mail. It facilitates the full auditing of the results obtained.  
– EN14012: Measurement of complaints and red ress procedures (measurement of the 
number of complaints and the speed  with which they are handled). 
– As noted above, this is a very important standard for consumers. It will help to 
ensure that information is collected, anal ysed, and reported in a consistent manner 
so that it can be used for quality control and audit purposes. It provides a classification system for complaints a nd some indications on minimum handling 
requirements for redress procedures. 
Overall, CEN has adopted 27 standards. 8 standards are under development. Currently a new standardisation mandate for CEN is under preparation. The proposal for a 
new mandate has been discussed in the Post al Directive Committee meeting in November 
2007. In the negotiations on the new mandate the Commission will particularly insist on the 
following points: (a) standards should be used , (b) they should be si mplified, (c) standards 
should be made clearer and consumer s/users should be better involved. 
Conclusions 
In a multi-operator environment the use of technical standards – developed by the postal 
experts – will become even more important. It is essential that interoperability of various 
postal networks is achieved and that consumers can benefit from high quality postal services, 
which can be provided by different operators. 
3.11. Conclusions on regulatory developments 
All Member States have transposed Directiv e 97/67/EC as amended by Directive 2002/39/EC 
through a series of primary a nd secondary national postal law.  Compared to the situation 
described in the 2006 Application Report, Estoni a, where transpositi on had been underway, 
has now also transposed both Directives. However, formal transposition is merely the first step in the full implementation of the Community  framework. The practical application of the 
 
EN 38   EN provisions of the Postal Directive and their im pact on postal service operators and the sector 
are of equal importance. 
During the reporting period, one further Member  State, Germany, fully opened its postal 
market as of 1 January 2008. To date four Memb er States have thus abolished the reserved 
area before the date foreseen in the Postal  Directive (Germany, Finland, Sweden, UK). The 
liberalisation of the German postal market co incided with the introduction of a statutory 
minimum wage in the postal sector in Germ any. According to ECORYS the minimum wage 
is significantly higher than the wages currently  paid by alternative pos tal operator(s) and its 
introduction could well have an adverse e ffect on the development of competition. 
However, there seems to be a certain slowdown as far as further market opening is concerned. 
The Netherlands, where full market opening wa s envisaged has now postponed liberalisation 
without setting any concrete date for full mark et opening. A number of arguments have been 
put forward for this indefinite postponement. These include the labour conditions of the main 
competitors of the Dutch postal incumbent operator, the absence of a level playing field for postal operators due to VAT exemptions for th e incumbent postal operators in Germany and 
the UK and the introduction of a minimum wage in  the postal sector in Germany thus raising 
costs for new entrants in the postal market. It is  clear that these arguments need to be subject 
to a legal evaluation and set in the context of the existing acquis  and, in partic ular, Article 7 
of the Postal Directive. This Article states that Member States may continue to reserve services to the universal service provider(s) only to the extent necessary to ensure the 
maintenance of the universal service.  
As regards access to the postal infrastructure, a trend towards mandatory access regimes to the 
delivery network by competitors can be observe d. In the majority of Member States the 
incumbent postal operator has the obligation to provide access subject to appropriate terms 
and conditions, where these are in first instan ce determined through negotiations and, if these 
fail, they can (or have to) be determ ined by the National Regulatory Authority. 
Progress towards reducing legal barriers to entry and levelli ng the playing field has been 
mixed. The distortive effect of VAT exempti ons for the incumbent postal operators on 
competition has largely remained. The lack of access to letterboxes by competitor postal 
operators is still a crucial issue in some Member States. The definition of the Universal Service Obligation and its future financing also could lead to uncertainties for postal 
operators. Authorisation and li censing procedures and relate d conditions are not always 
conducive to the development of competition. In some cases conditions attached to an authorisation or license  might even be considered prohibitive, as for example in Finland 
where a postal operator wishing to obtain a licen se is obliged to provide a full universal 
service or to pay special "tax", which can am ount from 5 to 20 % of its yearly turnover.  
The level of transparency of USPs' cost data and accounting is still extremely varied and 
therefore very inconsistent across Member Stat es. It seems that the main requirements of 
Article 14 of the Postal Direct ive are being met (separate acc ounts for each for the services 
within the reserved area on the one hand and for the non-reserved services on the other). 
However, it is less certain whether the requireme nts of Article 12, in particular ensuring that 
tariffs for each service under the universal servic e obligation are geared to cost, are being met. 
It has been confirmed by the Community legisl ator that well-functioni ng NRAs are crucial for 
the accomplishment of an internal market for postal services. Whereas all Member States 
have established formally independent NRAs, it can be observed that the mandate, resources 
 
EN 39   EN and powers of the NRAs vary significantly among Member States a nd there are justified 
doubts on whether all NRAs are adequately equi pped to (efficiently) fulfil their tasks. 
4. M ARKET DEVELOPMENTS  
4.1. Evolution of the postal market in a wider communications market 
The postal sector has undergone a remarkable transformation in the last decade. Driven by 
technological change and increasing indirect competition as well as by the gradual market 
opening and the threat of competition, incumb ent postal operators have undertaken major 
restructuring efforts to better serve their customers' needs and increase efficiency.  
Postal operators have moved towards more ma rket-driven provision of postal services, in 
some cases accompanied by partial or full priva tisation. Changes have been made to sorting 
and delivery networks to incr ease efficiency. Postal operato rs increasingly diversify their 
portfolio by entering areas outside  universal service provision.  
Despite a decline in its relative size to EU GDP , the postal sector contin ues to be an important 
part of the EU economy both by virtue of its size as well as employment levels. The 
modernization of its operations plays a key-role  in ensuring a sustainable future for postal 
services.  
Although postal markets have gradually been ope ned over the last decade, competition in 
letter mail is evolving slowly and meaningful competition in this market segment has still to develop. It is evident that market opening alone  does not lead automatically to competition 
4.2. Mail Volumes 
Addressed mail volumes have continued to grow during the period 2004 to 2006, although at 
a moderate pace. Volume growth has been more pronounced in the Member States which 
joined the EU in 2004 and 2007. In the peri od from 2004 to 2006, mail volumes grew by 
6.5% on average in the new Member States compar ed to a growth of 1.5% in the other fifteen 
Member States. A slight decline in addresse d mail volumes can be obs erved for the EU15 in 
2006 compared to the previous year.  
On average, consumer originating corresponde nce (C2X) accounts for about 15% of all mail 
volumes in the EU. Business originating mail (B2X) accounts for about 85% of mail volumes 
in the EU
40. The development of business originating mail thus has a far larger impact on the 
development of total addressed mail volumes th an consumer originating correspondence. A 
distinction can be made between Business to  Consumer (B2C) correspondence and Business 
to Business (B2B) correspondence.  
As regards future trends, in those Member States with a less developed mail market, it is to be 
expected that notably B2C addressed mail vol umes will continue to grow. This growth 
potential relates in particular to direct mail as quality of service levels improve but also – to a 
lesser extent – to transactional mail. In Member  States with mature postal markets the picture 
is different. Contrary to Germany where there has been moderate grow th (1-1.5% annually) in 
addressed mail volumes, the Netherlands and UK have already experienced declining 
                                                 
40 Boston Consulting Group, 2007 
 
EN 40   EN addressed mail volumes in the recent years. In the coming years, the UK, Sweden and the 
Netherlands expect a decline in the range of 1-3% per annum.  
As regards e-substitution, increased e-substitution  in the B2B market and to a lesser extent in 
the B2C market seems likely. For consumer orig inating mail flows, little further e-substitution 
is expected.  
Transactional mail may be more sensitive to e-s ubstitution and senders are more flexible with 
respect to frequency. It could thus be expected that future growth in transaction mail will be lower or decline faster than direct mail.  
Domestic parcel mail increased by 3.5% in the period 2004 to 2006
41. Contrary to letter mail, 
parcel mail does not appear to  be negatively affected by developments in information 
technologies. On the contrary, mail order services  parcels and packages benefit from e-selling 
and e-commerce.  
4.3. Labour Costs and productivity  
The postal sector has always been a relatively  labour intensive sector. According to a study by 
NERA in 2004 on the Economics of Postal Services42 labour costs accounted on average for 
63% of the total costs of USPs. Labour costs are therefore an important item in determining 
the competitiveness of a postal operator.  
Since the first steps towards market opening and market deregulation in the late 1980s, 
incumbent postal operators have reduced labou r costs by restructuring mail processes. On 
average, the ratio of labour costs as a percenta ge of total costs has fallen from over 80% for 
most USPs at the beginning of the 1990s to below 55% for some USPs nowadays43.  
Postal incumbent operators can be roughly divided into four categories44: 
– Postal operators which have been privatised  and focus on increasing shareholder value (DE 
and NL). These operators have invested in  mail processing with automated sorting and 
have high economies of scale; 
– Postal operators from Scandinavian Me mber States which have focused on the 
modernisation of the postal services a nd full commercialisation (FI, SE);  
– Postal operators which are stil l investing in posta l sector technologies  (AT, BE, DK, ES, 
FR, PT and UK) including, to a lesser de gree, new EU entrants (HU, SI, SK); 
– Postal operators which are progressing more sl owly due to different market conditions 
such as lower volumes, geography and limitati ons in investments (BG, CY, CZ, GR, IE, 
IS, LT, LU, LV, MT and RO). 
Relative wage costs are determined by wage levels and productivity. Productivity can be 
measured as letter output per person employed. As with relative labour costs, there are large 
                                                 
41 ECORYS, 2008. 
42 Study commissioned by the Commission; http://ec.europa.eu/internal_market/post/doc/studies/2004-
nera-final-postal-report_en.pdf 
43 ECORYS, 2008. 
44 ECORYS, 2008. 
 
EN 41   EN variations in productivity leve ls between Member States. High productivity is important for 
operators as it enables th em to compete in the market and with other forms of communication.  
Figure 6 – Number of letter post items (i n 1,000) distributed per employee (2004, 2006)  
020406080100120
AT BE BG CY CZ DE DK EE ES FI FR GR HU IE IT LT LU LV MT NL PL PT RO SI SK SE UK2004
2006
Note:  Indictor refers to the total letter-post serv ices in relation to the domestic employment.  
Eurostat, 2008 
The above figure shows that pr oductivity levels vary signifi cantly. It also shows that 
productivity levels are generally higher in the older Member St ates (EU-15) than in the new 
Member States (EU-12).  
It should be kept in mind that part of the variations of produc tivity is due to the geographical 
and market conditions of the Member State in wh ich the USP is operating. The majority of the 
employees are active in the delivery network. As a delivery network is labour intensive and 
there are high economies of scale, important factors such as mail volume per capita and 
population density (letter box density) have an impact on productivity. 
For example, in the Netherlands both mail vo lume per capita and population density are 
higher than in Greece, which partly explains  the difference in productivity levels.  
As regards the productivity of competitor operat ors, only little information is available. 
However, it can be expected that productiv ity in the upstream activ ities are relatively high 
because of the focus on (pre-sorted) business ma il and that productivity in delivery is lower 
than of the USPs because of lower ma il volumes and lower economies of scale45.  
                                                 
45 ECORYS, 2008. 
 
EN 42   EN 4.4. Legal Status of Universal Service Providers (USPs) 
In the last two years the process of incorporat ion and privatisation of USPs has continued, 
albeit at reduced pace. The majority of the U SPs remain however State-owned. As regards the 
already privatised USPs, the German governme nt reduced its shareholding in the German 
USP (through the public bank Kreditanstalt für Wiederaufbau KfW) from 42% to 31% and 
the Dutch government sold its remaining shares  of 10% in the Dutch USP TNT and gave up 
its "golden share" in TNT. 
MaltaPost has been fully privatised following th e Maltese government se lling its 65% share in 
MaltaPost. 100% of the shares of MaltaPost ar e now listed at the Malta stock exchange. In the 
Czech Republic and Poland the process to transform the State enterprise into a joint stock company started in 2007. In Poland, the pa rtial privatisation of the USP is under 
consideration. The USPs in Bulgaria and Ro mania are both public limited companies and 
Romania is currently preparing for privatisation.  
4.5. Development of competitio n in the letter mail market 
Development of competition in the addressed mail market has been rather uneven across 
Member States. In general it ca n however be considered that development of competition is 
still rather slow across the EU . The table below presents an overview of the development of 
market shares of competitors in the addressed mail segment form 2004 to 2007.  
Table 7 – Market shares of competitors in the addressed mail segment 2004 and 2007 
MS Addressed mail 
2004 Addressed mail 
2007 Comments 
AT 1.6% ≤ 2%  
BE ≤ 2% ≤ 2%  
BG 0% Unknown (10%)  
CY 0% 0%  
CZ 4.5% 5% 2007: excl. newspapers and magazines 
DE 5.3% 10.4%  
DK 3-5% 1-5% 2007: non-bulk 
EE 5-6% 4-5% 2007: Direct mail 8% 
ES 7-11% 8.2%  
FI 0.5%-1% 0% 2004: excl. newspapers 
FR ≤ 2% 1-2% Exit of Adrexo in 2008 
GR ≤ 1% ≤ 1%  
HU 0% 0% 2007: excl. direct mail 
IE 0% 0-1% 2007: B2B 10% 
IT 1-2% 5-15% 2007: unreliable data 
LT 0% 1%  
LU 1-2% 1-2%  
LV ≤ 1% ≤ 1%  
MT 0% 1%  
NL 4.1% 14%  
 
EN 43   EN MS Addressed mail 
2004 Addressed mail 
2007 Comments 
PL 0% 0%  
PT ≤ 1% 2% (estimation)  
RO ≤ 5% ≤ 5%  
SE 7.0% 9.3%  
SI ≤ 2% 0-5%  
SK 0% 1.9%  
UK ≤ 1% E2E 
≤ 5% access ≤ 1% E2E
20.2% access2007: 03/2007-03/2008 
Based on ECORYS, 2008  
As can be seen in the table above, in most Member States there is no significant competition 
in the addressed mail market. End-to-end co mpetition is developing in Spain, Sweden, 
Germany and the Netherlands with the market share of competitors ranging between 8.2% in 
Spain and 14% in the Netherlands. In th e new Member States, growing end-to-end 
competition can be observed in Bulgaria, Czech Republic, Estonia and Romania. 
In the UK, competition has developed in the upstream part of the market. There are 20 
licensed postal operators other than Royal Mail  and access volumes have grown to circa 20% 
of the licensed area in the period 2007/2008 (April 2007 – March 2008). On the other hand, end-to-end competition remains almost insignificant despite the fact that the UK market was fully liberalised at the beginning of 2006.  
As already stated in the 2006 A pplication Report, reducing the re served area - to 50 grams, 
i.e. opening up an additional 7% of the addressed mail market, seems to have made very little 
impact on the development of competition. The opening up of distinct segments of the 
addressed mail market seems to have been  more important for the development of 
competition.  
The liberalisation of direct ma il (CZ, EE, IT, NL), intra-city  mail (ES), hybrid mail (BG) and 
issuance of so-called D-li censes (allowing competitors in Germany to provide value added 
next day delivery services  until full market opening) has enabled competition to develop, in 
particular if there are no major barriers to the development of competition other than the 
reserved area.  
The reason behind this is that due to the significance of ec onomies of scale in the postal 
services businesses, it is crucial that compe titors get enough volume in order to be able to 
reduce costs and compete with the incumbent postal operators. Opening up of for example 
direct mail provides more volume than the reduction of the reserved area. 
It can also be seen that the access regime in fluences the pattern of competition and a number 
of aspects of the access regime and access regu lation have been conducive to the development 
of access competition rather than en d-to-end competition in the UK.  
 
EN 44   EN 4.6. Business strategies of comp etitor postal operators  
Competitors are using a variety of business models. 
– Development of a full service concept; 
– Development of a low costs model in certain  market segments or certain geographical 
areas; 
– Development of activities in pa rt of the value chain (such as  mail preparation upstream or 
delivery without mail preparation downstream); 
– Development of niche markets.  
The business models are not mutually exclus ive and some can be combined Germany for 
example, competitors chose a business model of low costs end-to-end delivery five or six times per week through their own delivery and cooperation with many local and regional 
competitors with a focus on transactional mail. The models are similar in Spain and the Netherlands. In Spain the main competitor to  the incumbent operator provides daily end-to-
end delivery of direct mail, in tra-city mail and addressed mail above 50 grams through their 
own network. In the Netherlands, two competitor companies apply a low cost model focusing 
on non daily delivery of non-urgent business mail.. 
In the UK on the other hand, several comp anies focus on upstream activities in mail 
preparation and collection and sorting with  the final mile delivery undertaken by the 
incumbent operator. Other operators in the UK focus on niche markets like for example B2B document exchange. 
4.7. Development of competition in the parcels and express market 
The parcel and express market in the twelve largest European countri es (including DE, FR, 
IT, ES, PL, UK and Scandinavian  countries) represent a total volume of approximately EUR 
38.4 bn..
46 During the period 2004-2006 competition furthe r intensified in the EU market for 
parcels and express. Innovations in this mark et segment include new networks for parcel 
collection and delivery and automa ted pick-up by customers.  
There are six main players active in the EU mark et whose joint market share is close to 70% 
of the total market.  
                                                 
46 Datamonitor, Express Benchmarking 2008, press release 21 November 2007, quoted by ECORYS, 
2008. 
 
EN 45   EN Table 8 – Market share in the European parc el and express market in 2006 (Estimation by 
DPWN) 
 Estimation by Deutsche Post 
DHL (DPWN) 24 %
UPS 17 %
TNT 14 %
Fedex 7 %
La Poste (DPD) 4 %
Royal Mail (GLS) 2 %
Others 32 %
 ECORYS, 2008  
European players remain strong in the parcel an d express markets. In this context, UPS and 
Fedex are the only important international prov iders in Europe which are not backed by a 
postal administration. The market leaders show  strong growth rates and are strengthening 
their position through acqui ring local players.  
Recently, the operators who deliver express serv ices face more competition by parcel delivery 
operators. Postal operators are closing the gap between parcel market and the express industry 
by increasing quality and value for money.  
4.8. Barriers to the development of competition  
Over the last couple of years, ve ry little progress has been made  with regard to resolving the 
VAT issue and progress with regard to some othe r identified obstacles to market entry as for 
example the access to letterboxes has been mixed.  
In Austria, the problem has been addressed in legislation but this was subsequently annulled 
by the Constitutional Court. In Poland a start has been made by putting new letterboxes in 
place, while in France following a public cons ultation conducted by the French NRA, ARCEP 
a solution allowing access to letterboxes on equal terms has been found. 
According to ECORYS, the most important main  barriers to competition requiring attention at 
EC and/or national level of are:  
The VAT exemption of many of the USPs; The access to the letterboxes, most notably in Austria and Poland; 
Strategic barriers, in partic ular arising from (alleged) exclusivity contracts, price 
discrimination, loyalty bonus es and bundling and tying; 
Barriers that may arise from collectiv e arrangements of labour conditions; 
 
EN 46   EN Barriers that may arise from how the USO will be defined, its net cost established and the cost 
of financing of the USO shared between market participants.  
In order to safeguard the full benefits of EU postal reform it is essential that market 
monitoring continues including during the period of the publication of the Third Postal 
Directive and the date of full market opening. It is theref ore vital that the Commission 
continues with its close market monitoring and ta kes necessary actions where and when this is 
necessary to safeguard the objec tives of the EU postal reform. 
4.9. Social and employment aspects 
Access to postal services 
Access to postal services is one of the basic re quirements of postal services as a service of 
general economic interest. Access to universal service via postal outlets has a particular 
importance for consumers as well as SMEs. At the same time, postal operators have been 
restructuring and reorganising their networks of ten finding innovative solutions in the interest 
of the customer.  
From 2004 to 2006 the number of people served by one post office increased marginally from 
3426 people in 2004 to 3447 in 2006.47 The figure below provides an overview per Member 
State on the number of people served by one post office (incl uding postal agencies, postal 
outlets and mobile post offices).  
Figure 7 – People served by one post office (i ncluding postal agenci es, postal outlets and 
mobile post offices) 
0200040006000800010000120001400016000
AT BE BG CY CZ DE DK EE ES FI FR GR HU IE IT LT LU LV MT NL PL PT RO SI SK SE UK2004
2006
Eurostat, 2008 
                                                 
47 Eurostat, Data in focus 25/2008 – Postal Services in Europe 2006. 
 
EN 47   EN It can be noted that the average number of people served by one post office varies 
significantly among Members State suggesting an over-provision of access in some Member States. While the EU27 average amounts to 3447 people served by one post office, in Cyprus 
and the Czech Republic this rose to 681 and 742 people respectively . On the other end of the 
scale, in Spain 13,668 people are served by one o ffice. One should bear in mind that the mere 
number or density of postal outlets does not necessarily mean the same  degree of accessibility 
for individual customers, for whom opening hours  are also important and as well as distance 
to the postal office. 
Levels of employment 
Corporate restructuring and the application of new technologies  has a clear impact on the 
employment levels of the USPs. As already pr esented above, corporate restructuring takes 
place at different pace and different periods in  time. The development of employment levels 
of USPs thus varies from Member State to Member State and over time. 
ECORYS estimates that USPs in EU 27 employed about 1.38 million people in 2006 
(headcount). In comparison to 1997,  employment decreased by 7.7% . This decline is observed 
in the majority of Member States but it seems la rger in the new Member States (EU12) than in 
the old Member States (EU15). Employment re mained relatively stable from 2005 to 2006 
experiencing a small decline from  1.40 million to 1.38 million employees.  
The decrease in the employment of USPs s hould, however, not mask the fact that new 
competitors have also created new employment . Data on employment of competitors are 
difficult to obtain. ECORYS estim ates that employment of comp etitors amounted to at least 
219 thousand people in 2006 (headcount), which is an 8.2% increase compar ed to the estimate 
for the previous year. Nearly 70% of the sta ff of competitors is employed in Germany the 
Netherland, France and Poland. In the last years rising employment of co mpetitors appears to 
offset either fully or partially de clines in employment of USPs.  
The number of civil servants employed in  the sector conti nues to decline.  
A complementary perspective on th e importance of the postal se ctor for EU employment is 
provided in a study carri ed out by PLS Ramboll
48, which assessed the number of persons 
directly employed in the postal sector, the number of persons em ployed in services related to 
the postal sector as well as induced empl oyment, i.e. employme nt created due to 
macroeconomic effects of postal activities. On this basis the study indicated that in 2000, over 
5 million jobs were directly or indirectly asso ciated with or induced by the postal sector in 
Europe.  
Employment in the postal sector as a whole is  therefore of paramount importance. Only an 
efficient postal sector able to compete with other means of communication will allow the maintenance of employment levels.  
                                                
 
48 "Employment trends in the EU postal sector", Pls Rambøll, October 2002. 
 
EN 48   EN 4.10. Technological trends 
Gradual market opening has forced incumbent posta l operators to increase efficiency of mail 
processing, which has resulted in cost control and quality of service improvement. It has also given rise to major restructuring of mail handling and sorting operations. Some Member 
States have reviewed the mail infrastructure and sorting processes during the early phase of 
market opening, but most have developed their plans in the period afte r 2004 in anticipation 
of full market opening (which at that time was envisaged fro 2009).  
Restructuring of mail handling processes ha s often resulted in or was induced by the 
development of new products and concepts. While  physical mail will remain one of the main 
products, it will be increasingly supplemente d by multi-channel delivery with tailor-made 
solutions for different customers. The increasi ng development and use of hybrid mail services 
by most postal operators is one example of this  development. Incumbent postal operators in 
Member States such as Finland and Sweden now  go a step further and are entering adjacent 
market through developing IT services for thei r customers. The development of hybrid mail 
blurs existing boundaries between  telecommunications, postal se rvices and the advertising 
and multi-media market.  
Market opening has also induced incumbent post al operators to increase their focus on value 
added services. This has an impact on many ar eas of activity fields from generating mailings 
and mail processing to transport and delivery options.  
4.11. Conclusions on market developments 
Conclusions on market trends 
Addressed mail volumes have continued to gr ow in the postal market from 2004 to 2006
49. 
Volume growth was more pronounced in the ne w Member States which joined the EU in 
2004 and 2007 than among the old Member States. Between 2004 and 2006 mail volumes 
grew by 6.5% on average in the new Member Stat es compared to an average growth of 1.5% 
in the other fifteen Member States. The postal market is continuing to  evolve towards a one 
way distribution market with business orig inating mail accounting on average for around 85% 
of total mail volumes. 
It is expected that Member St ates with a less developed mail market will continue to grow 
substantively, with a marked growth potential in particular for direct mail as quality of service 
levels improve. In Member States with mature postal markets the situation is different. Some 
of these Member States can sti ll achieve moderate growth rates whereas other Member States 
such as the UK and the Netherlands have al ready experienced declining addressed mail 
volumes in recent years.  
Competition in the letter post market is emerging but meaningful competition still has to 
emerge. Market shares of comp etitors, although increasing, re main at a low level even in 
Member States that have fully liberalised th eir postal markets. End-to-end competition is 
being further developed than average in Sp ain, Sweden, Germany and the Netherlands.  
                                                 
49 Latest data available; ECORYS, 2008.  
 
EN 49   EN In the UK, which fully liberalised its postal market in 2006, end-to-end competition remains 
almost insignificant. In contrast, competition ha s developed in the upstream part of the market 
with competitors having a market share of ar ound 20% of the total volume of addressed mail. 
The UK NRA Postcomm has been particularly active on access arrangeme nts and developing 
a licensing regime for new entrants. There are indications that a numbe r of aspects of the 
access regime and access regulation have been  conducive to the development of access 
competition rather than end-to-end competition in the UK. 
Reducing the reserved area from 100 grams to  50 grams as from 1 January 2006, accounting 
for the opening up of an additional 7% of the addressed mail market, seems to have made little impact on the development of competition as it only opened up a small share of the postal market in terms of volume. The opening up of distinct segments of the addressed mail 
market in some Member States seems to have been more important for the development of competition as it opened up bigger shares of the postal market to competitors, for example, the liberalization of direct mail in the Netherlands, the so called "D licence" in Germany (allowing competitors to provide value-added  next day delivery services until full market 
opening) and the liberalization of  hybrid mail in Bulgaria.  
The generally slow development of competition can be  attributed to legal barriers, i.e. the fact 
that in most Member State the re served areas still count for the majority of postal volumes. As 
economies of scale play an important role in posta l activities, the reservat ion of services to the 
incumbent postal operators makes it difficult for new entrants to achieve sufficient volume to also benefit from economies of scale and to  efficiently compete on the postal market.  
Apart from the reserved area a nd further legal barriers already mentioned above such as the 
VAT exemption for incumbent postal operators, acce ss to letterboxes or other elements of the 
postal infrastructure in some Member States and authorisation and licensing procedures, there 
are also strategic barriers which hinder the development of competition. Strategic barriers 
arise in particular from (all eged) exclusivity contracts, pr ice discrimination, loyalty bonuses 
and "bundling and tying".  
The market impact of the Postal Directive  
EU postal reform which started in 1992 with  the publication of the Green Paper on the 
development of the single market for postal serv ices has had a very significant impact on the 
provision of postal services and the postal sector. The Postal Di rective and its application by 
the Member States have led to an improved qu ality of service and ha ve secured the provision 
of a universal service accessible for all customers.  
Due to the regulatory and market impact of the provisions of the Postal  Directive and gradual 
market opening, competition is developing in the letter mail market. Market shares of 
competitors in the addressed mail segment increased considerably in several Member States from 2004 to 2007. Market opening and the introduction of competition are the key 
instruments for creating jobs and achieving better services for consumers. However, 
meaningful competition still has to emerge, and identified (or emerging) barriers to entry have 
to be removed.  
 
EN 50   EN Driven by gradual market opening  as provided for by the Postal Directive and the threat of 
competition, postal operators continued during the reporting period to modernize their operations and to undertake major restructuring e fforts to increase effici ency. Postal operators 
are increasingly moving towards a mark et-driven provision of  postal services. 
On average, quality of service – measured in delivery time – remained high during the 
reporting period and far exceeds the performance objectives set by the Postal Directive for 
delivery of 85% of cross-border in tra-EU mail within three days and 97% within five days. In 
2007, 94% of cross-border intra-EU mail was delivered within three days, virtually 
unchanged from 2006. 
 
EN 51   EN TABLE OF TABLES 
Table 1– Compliance with delivery requirements ................................................................... 12 Table 2 – Requirements for the Postal Network ...................................................................... 15 Table 3 – Services reserved for th e USP in the Member States:.............................................. 16 
Table 4 – Overview of licensing and authoris ation insider the unive rsal service area ............ 18 
Table 5 – Postal services  exempted from VAT........................................................................ 28 
Table 6 – Regulation and performance of routin g times of domestic priority mail (2006) ..... 33 
Table 7 – Market shares of competitors in the addressed mail segment 2004 and 2007 ......... 42 
Table 8 – Market share in the European parc el and express market in 2006 (Estimation by 
DPWN)....................................................................................................................... 45 
TABLE OF FIGURES 
Figure 1 – Access to the postal supply chain: .......................................................................... 20 Figure 2 – USP Tariffs for first we ight step (in EUR) in 2007................................................ 24 
Figure 3 – USP Tariffs for first weig ht step (in PPS) in 2006 and 2007 ................................. 25 
Figure 4 - Cross border intra-community D+3 in EU 15 and EU29........................................ 34 Figure 5 – Cumulative performance in 1994 and 2007 for EU15 plus ICE, NO, CH ............. 35 Figure 6 – Number of letter post items (i n 1,000) distributed per employee (2004, 2006) ..... 41 
Figure 7 – People served by one post office (i ncluding postal agencies , postal outlets and 
mobile post offices).................................................................................................... 46