Maltapost could lose limited monopoly by 2009

Maltapost is set to lose its limited monopoly in providing its services, particularly those related to the collection and distribution of ordinary mail, if draft legislation tabled yesterday by the European Commission goes through.

National operators such as Maltapost still enjoy a monopoly on mail below a certain weight - currently a maximum of 50 grams - known as the "reserved area". The new proposals introduce additional competition even in this area while ensuring the provision of a "basic" service, known as the universal postal service.

According to the Commission's proposed directive, postal markets in the EU are to be fully opened to competition by 2009. The Commission said its studies show this is the best way to maintain universal service while further improving quality and choice for consumers and businesses.

The proposal gives member states a flexible choice of means to finance universal service provision or the possibility to share out the universal service obligation between operators. EU regulations already imposes obligations on member states in relation to the provision of a "basic" service. This comprises at least one delivery and collection, five days a week, for every EU citizen.

Internal Market and Services Commissioner Charlie McCreevy said the Commission firmly believes that completing the internal market for postal services is vital for securing further improvements and for sustaining the progress and results achieved to date.

"In preparing the proposal, we have put consumer and user needs first. With full market opening in 2009, we can look forward to more innovation, better services and improved cost efficiency. Without it, EU postal markets will be increasingly unable to meet the challenges of the communications revolution. Market opening plays a crucial role in the long-term viability of the sector and the employment it generates."

Although the discussion on this proposal is still in its early stages, as it still has to be discussed at EU Council and Parliament level, some postal companies, particularly those that still enjoy a monopoly, have already indicated their opposition.

Ten postal operators, including Maltapost, have declared their belief that the universal postal service will not be effectively safeguarded by the Commission's proposals because of lack of funding.

"It is essential that truly effective measures for financing the universal postal service are identified and implemented before removing the only one which, up to now, has shown to be efficient when appropriately defined: A restricted reserved area," the postal operators of Belgium, Cyprus, France, Greece, Italy, Hungary, Luxembourg, Malta, Poland and Spain said.

The postal service in Malta is regulated by the Malta Communications Authority which does not seem to be opposing the EU proposals.

Sources close to the MCA said the watchdog agrees with the principles of the proposal although there are some technical issues that need to be clarified. MCA wants to make sure the basic services will still be guaranteed and operable as a result of the new proposal.

Postal services in the EU are covered by a 1997 directive that set a regulatory framework guaranteeing citizens a universal service, while gradually limiting the scope of the reserved area (monopolistic areas).

Initially this included mail under 350 grams, amended in 2002 to 100 grams and reduced further at the beginning of this year to 50 grams.