September, 1 2006 Lev Razovskiy Director, International Affairs Wider Europe Working Group September, 1 2006 Lev Razovskiy Director, International Affairs

During liberalization the economic situation is changing deeply During liberalization the economic situation is changing deeply. The competition emerges. Postal sector is subject to competition on all stages: box collection, sorting, delivery. More and more complex environment forces operators to consider the necessity of working out strategy, prioritizing and realization of reforms, conducting of structural reformation.

There is no unified conception of universal postal service. At EU level Universal postal service is determined as protection of consumer and its rights as well as service provider obligation. UPU perceives it as a guarantee of network integrity. World Bank strives to protect investor. It doesn't consider universal service. Almost the same situation with WTO: free market and unavailability of universal service.

Second Postal Directive (2002/39 EU) First Postal Directive (97/67 EU) - minimal service standards guaranteed by each country-member; - limits on services free from competition and step-by-step liberalization (letters with weight up to 100 gm since January 2003 and up to 50 gm from January 2006); - tariffing approach applied to postal services; regulations on accounting transparency; - quality of service standards; - organization of national regulatory bodies; - opening for competition all outgoing mail with some exceptions (for instance, maintenance, where it is necessary, of universal postal service) First Postal Directive (97/67 EU) - minimal service standards – one box collection/ delivery per day 5 days a week, mail up to 2 kg, parcels up to 10 kg, - the reduction of reserved area to 350 gm, - tarriffing approach – transparency, nondiscriminatory, cost approach, - quality of service standards, - necessity of license for non reserved services, - development of national regulator in each country. This regulator should be legislatively separated from the operator and free from owner control New Postal Directive will cover the situation with postal services after market liberalization in 2009

A new Directive is needed to focus on sectoral reform for the benefit of not only users, but also suppliers, consumers and the Postal Operators.  It will not be not sufficient to leave the postal sector to the normal competition rules, even the market becomes fully liberalised.    The Third Directive should primarily ensure an adequate implementation of the principles which are present in the first Two Directives, such as a necessary and sustainable Universal Service Obligation (USO), that prices are geared to cost, the provisions on access to the postal network (both upstream and downstream) are clarified, and efficient rules on market opening are established.

How can Universal postal service be maintained when monopoly is being eliminated? Will Universal postal service be required if consumer needs are going to change? Do we need a new definition of Universal postal service?

Postal regulator has 2 main functions: establishment of market and provision of universal postal service. Universal services are determined politically, in other words this are the services which should be rendered obligatory.

When we talk about worldwide distribution of postal services, what we are really talking about is universal postal service — the ability of a vast majority of a country’s citizens to obtain postal services no matter where they live. We consider the access to affordable and reliable postal services as an important human right that contributes to the socio-economic development of nations and their people.

All these issues were considered at two WG "Wider Europe" meetings held in March in Sofia and in July in Belgrade.   Significance of the stated subject (USO) is obvious at least from the fact that at both meetings more than 25 representatives of PE country-members (EU and non-EU members) took part in the discussion.

Participants of the meetings in Sofia and Belgrade came to the conclusion that: it is necessary to have a certain set of options which would provide access to Universal postal services to the population. in the interest of all Members, PostEurop is supporting and developing a sustainable and competitive European postal communication market accessible to all customers and ensuring a modern and affordable universal service.

Thank you for your attention!