MCA widens dialogue on postal tariffs, pricing

Tariffs and pricing structures for several postal services are to be the subject of further consultation led by the Malta Communications Authority as the sector heads for liberalisation at the end of the year.

Postal pricing came under the spotlight again in Maltapost’s interim directors’ statement to the Malta Stock Exchange last week when the company issued a profits warning for the second half of 2012.

Maltapost explained the changes in the tariffs on cross-border mail imposed by the Universal Postal Union last January continued to have an adverse impact on its financials. Directors expected the downward trend on profitability reported in the first half to March 31 to be reflected in the second half to September 30. The company said it was working closely with the MCA.

The regulator, meanwhile, said it was constantly talking to stakeholders.

“In the near future we shall be consulting further on the regulation of tariffs and the different pricing structures for a number of postal services,” the Malta Communications Authority told The Times Business. “Our main objective is to safeguard the provision of an efficient, affordable, high quality universal postal service and the provision of fair market conditions for postal operators.”

In its interim statement, Maltapost warned the downward trend will worsen “until the regulatory framework within which the company operates is adequately revised” and added it continued to work closely with the MCA to ensure the adoption of a fair and regulatory approach to its public tariffs. It said the increases in costs from the change in tariffs on cross-border mail “must be balanced by realistic tariffs”.

But the postal company was reticent to elaborate on “the considerable increase in direct mail costs related to developments in international tariffs regulated by the UPU” and the outcome it hoped its discussions with the regulator would produce.

“The global postal network operates on the basis of bilateral compensation which terms are determined periodically,” Maltapost told The Times Business. “It is not a matter of percentages, but more a question of reciprocal tariffs and charges in respect of the delivery of inward and outward mail. As a postal operator Maltapost is in constant contact with its regulator on matters relating to its operations.”

In its interim directors’ statement Maltapost also warned that the local letter service was loss-making.

“At this point in time we are not in a position to outline the options for a way forward,” the company told The Times Business. The Malta Communications Authority said it strongly believed in the importance of dialogue with stakeholders in the sectors under its remit, including that of the postal sector.

“It is through dialogue that we have obtained some of our best results,” the MCA said.

“We recently issued two separate consultation papers on aspects related to the manner in which postal services are regulated. The first relates to the postal authorisation regime – the licensing structure and related administrative charging principles. The second deals with the manner in which postal services will be regulated in a liberalised environment.

“These consultations address a number of regulatory challenges that liberalisation will bring with it.”