Country sheet: Italy 505 Country sheet: Italy 1.1 Summary Mail market characteristics The postal market is characterised by: (i) A high population density and a high degree of urbanisation; (ii) Relatively low mail volumes per capita; (iii) Direct mail (addressed advertising mail) is not included in the reserved area; (iv) Both inbound and outbound cross-border mail are included in the reserved area; (v) A VAT-exemption for all universal services provided by the USP; (vi) There are many (small) companies with a universal service licence, but only one company (Poste Italiane) with a universal service obligation (with the right to operate within the reserved area); (vii) A certain percentage of mail collected by Poste Italiane (including registered items) must continue to be delivered through (city mail) competitors. Regulatory developments • The reserved area was reduced from 100g to 50g at 1 January 2006 – in conformity with Directive 2002/39/EC. In accordance with the recent adoption of Directive 2008/6/EC, full liberalisation of the postal market is now scheduled to occur in 2011. • Until 16 May 2008, the Ministry of communications was responsible for defining and managing the regulatory framework for the postal sector and was the official regulatory authority. By order of Legislative Decree May 16, 2008, n. 85, 1 the functions of the Ministry of Communications and its inherent financial, material and human resources, are transferred to the Ministry of Economic Development. Market developments • Poste Italiane holds a dominant position in addressed mail deliveries. The main competitor (TNT Post) is mainly active in the unaddressed mail market and registered mail. In addition, there are many (small) companies active in local mail delivery. • Since December 2007, competition has gained a possible boost as a percentage of mail items that is collected by the universal service provider (including registered mail) has to be delivered by competitors of the USP. The Ministry of Communications and the National Competition Authority considered that this was an important step towards the full opening of the market. The delivery offer to competitors was established by an open and non discriminatory tender. 1 Published in the Official Gazette – General Series – no. 114 16 May 2008.
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Country sheet: Italy 505
Country sheet: Italy
1.1 Summary
Mail market characteristics
The postal market is characterised by:
(i) A high population density and a high degree of urbanisation;
(ii) Relatively low mail volumes per capita;
(iii) Direct mail (addressed advertising mail) is not included in the reserved area;
(iv) Both inbound and outbound cross-border mail are included in the reserved area;
(v) A VAT-exemption for all universal services provided by the USP;
(vi) There are many (small) companies with a universal service licence, but only one company
(Poste Italiane) with a universal service obligation (with the right to operate within the
reserved area);
(vii) A certain percentage of mail collected by Poste Italiane (including registered items) must
continue to be delivered through (city mail) competitors.
Regulatory developments
• The reserved area was reduced from 100g to 50g at 1 January 2006 – in conformity
with Directive 2002/39/EC. In accordance with the recent adoption of Directive
2008/6/EC, full liberalisation of the postal market is now scheduled to occur in 2011.
• Until 16 May 2008, the Ministry of communications was responsible for defining and
managing the regulatory framework for the postal sector and was the official
regulatory authority. By order of Legislative Decree May 16, 2008, n. 85,1 the
functions of the Ministry of Communications and its inherent financial, material and
human resources, are transferred to the Ministry of Economic Development.
Market developments
• Poste Italiane holds a dominant position in addressed mail deliveries. The main
competitor (TNT Post) is mainly active in the unaddressed mail market and registered
mail. In addition, there are many (small) companies active in local mail delivery.
• Since December 2007, competition has gained a possible boost as a percentage of
mail items that is collected by the universal service provider (including registered
mail) has to be delivered by competitors of the USP. The Ministry of
Communications and the National Competition Authority considered that this was an
important step towards the full opening of the market. The delivery offer to
competitors was established by an open and non discriminatory tender.
1 Published in the Official Gazette – General Series – no. 114 16 May 2008.
Annex II: Main Developments in the Postal Sector (2006-2008) 506
• Further development of competition is hampered by the existence (and extent) of the
reserved area and the VAT-exemption for Poste Italiane on universal services. In
addition, the scattered population in Italy strengthens the importance of Poste
Italiane’s network (to which no competitor has demanded access so far).
• There has been some debate about direct compensation from the Government to
cover the losses of the universal services (these subsidies were in addition to the
finances from the Universal Service Fund). The European Commission, recognised
that the public funds granted to Poste Italiane for years 2000-2005 and for 2006-2008
respected the European law on State aid, since they under-compensated the costs of
the universal services. However, the commission “regrets that Italy put the aid in
question into effect” as the measure “is liable to affect […] trade and distort
competition”.2
• Competitors such as TNT and Uniposta/Omnio Network have been investing in
(future) expansion that mainly focuses on business to consumer services. The
investments are in network expansion, printing capacity, integrated communication
services, and mail order.
Other issues
• Both the NPO and its competitors are investing heavily in increasing productivity,
network extension and diversification.
• Over the last five years, Poste Italiane has managed to transform its post offices from
a loss making into a profit making network. Because of installed IT-systems, rural
post offices can connect to the main office and start selling mortgages, bank accounts,
and insurance. Overall, however, the mail service remains loss making because of the
universal service obligation. According to an article in Fortune (June 12, 2006), the
losses are said to result from the universal service requirement to deliver mail across
the country five days a week, even in unprofitable (rural) areas.3
• TNT is using its network to diversify into mail order, as it recently signed an
agreement with Mr. Price (one of the most important online sales websites of
electronic products in Italy). Thereby it anticipates a large growth potential of the
market for B2C parcel deliveries.
Discussion points
• The scope of the reserved area and the VAT exemption for the USP imply that the
market for addressed mail in Italy has not been very contestable. Although the Italian
market does not differ from most other European countries in this respect, in Italy the
provision of the USO requires additional funding, beyond the returns of the reserved
area. In many other countries with a scattered population such financial support is not
needed (for example in France and Spain). These funds may have a hampering effect
3 See http://money.cnn.com/2006/06/09/news/international/poste_fortune/index.htm.
ECORYS confirms that the costs of the universal services exceeded the revenues considerably. This statement is based on
classified data from the “Accounting Separations 2004-2006, National Regulatory Authority, Service Agreements Poste
Italiane – Communication Ministry 2003-2005 and 2006-2008”, which was provided to ECORYS by Poste Italiane.
Country sheet: Italy 507
on the development of competition. However in light of the regulatory barriers in
place (reserved area, VAT exemption), the additional effect on the development of
competition is likely negligible.
• The impact of the 2007 memorandum, forcing the USP to make use of competing
networks for delivering a certain percentage of mail, can be seen as a positive effect
on the development of competition. It helps competing operators to further develop
towards a competitive delivery network for the period after 2011.
Summary information on market developments:
Postal market segment / aspect Competition (market shares) Main competitors / remarks
Express NPO has 11.4% market share in
the domestic market
DHL (DPWN), TNT express,
FEDEX
Parcel (main players) See above The market share in parcel
deliveries within the universal
service area is unclear
Unaddressed n.a. Exact number of unaddressed
mail items is unknown
Cross-border mail Inbound and outbound:
NPO ≈100%
Addressed mail (market share CPOs)* 5% - 15% Market data are very unreliable.
Other competitors are TNT Post
and (possibly) Uniposta
Population density (inhabitants/km2) 195
Total addressed mail market (items) 6.8 billion items Market data are very unreliable
Addressed mail volume per capita ≈ 115
Status of NPO Limited liability company 65% state owned; 35% owned by
the public savings bank (Cassa
Depositi e Prestiti)
Main divisions of NPO Mail,
Banking,
Express
Note: * The market share of CPOs refers to the combined market share of CPOs in domestic addressed mail
delivery, excluding newspaper delivery. All figures refer to 2006. N.a. is not available.
Summary information on the implementation of the Postal Directive is given below.
Aspect Implementation and remarks
Universal service and its
financing
The USO complies with the Directives and is carried out by the incumbent Poste
Italiane. Other providers have a licence to provide universal services (outside the
reserved area) but only Poste Italiane is obliged to deliver in all of Italy.
The USO is VAT exempted and financed from the reserved area. Any costs not
covered by the returns from the reserved area should be financed by a Universal
Service Fund. In practice, however, the finances from the Universal Service Fund
and additional subsidies were not sufficient to cover the net costs of the universal
service.
Annex II: Main Developments in the Postal Sector (2006-2008) 508
Aspect Implementation and remarks
Reserved area Reduced to 50g at 1 January 2006. Full liberalisation is not expected until 2011.
Both in- and outbound cross-border mail are part of the reserved area. Direct mail
is liberalised.
Licensing and network
access
(i) A universal concession is needed to provide universal services and to have the
right to operate within the reserved area; (ii) A universal licence is needed for
universal postal services; (iii) Poste Italiane is not obliged to provide access to third
parties.
Tariff principles and
transparency of accounts
(i) The tariffs for the universal service are capped, with the level depending on the
inflation rate, productivity gains and the difference between quality objectives and
results.
(ii) The prices are subject to ex ante price regulation by the NRA. The competition
authority may intervene “ex post” in the light of the competition law.
(iii) The NPO is required to submit annual accounts to the NRA that must show
separate information on the reserved area, universal services and activities outside
the universal service (accounting separation). They are verified by an independent
auditor and are submitted to the NRA for approval.
Quality of services Quality standards are set mainly concerning delivery time. Poste Italiane meets
these requirements. The NRA controls the achievement of them. Other important
elements about service quality are the presence of appropriate points of access for
the users, the postal offices opening times and the existence of simple complaint
procedures.
The national regulatory
authority
Since 16 May 2008 The Ministry of Economic Development took over the
responsibility as regulatory authority from the Ministry of Communication. It is
responsible for issuing licences (and determining requirements); setting maximum
tariffs, cancelling tariffs and setting new tariffs (and penalties if ceilings are not
adhered to); requiring data and studies from both the USP and non-USPs; and in
cases of serious violations of universal service obligations, the Ministry may launch
investigations to ascertain any failures and may apply sanctions.
1.2 General information
Italy is a large country and has the fifth-highest population density in Europe. The degree
of urbanisation is high.
Table 0.1 General country information (2007)
Italy
Population (in million) 58.8*
Size of the country (1,000 km2) 301.3*
Population density (inhabitants/km2) 195.1*
Degree of urbanisation 67.6**
Number (and percentage) of inhabitants 5 largest cities 6.3 million (11%)
Sources: * UPU (2006), ** UN (2005), *** World Gazetteer (2008 estimation).
Country sheet: Italy 509
1.3 Regulatory developments
1.3.1 Postal law and regulation
Decree 261/99 (the Postal law) adapted the postal regulatory framework to Directive
97/67/EC. The postal law was amended in 2003 by Legislative Decree 384/2003,
implementing Directive 2002/39/CE. An overview of all relevant legislation is provided
below.
Table 0.2 Postal law and regulation
Postal law and
regulation
Date of introduction Date of latest
amendment
Remarks
Postal Code 29 – 03- 1973 - Presidential Decree
156/73
Approval of the sole text
of legislative disposition in
postal, bank postal and
telecommunications
Postal law 20-07-1999 2003 Legislative Decree
261/99, implementing Dir.
97/67/CE.
Amended by Legislative
Decree 384/2003,
implementing Directive
2002/39/CE
Regulations concerning
dispositions on general
authorisations in the
postal sector
04-02-2000 15-02-2006 Decree 42—200 No.75,
amended by
Decree 15-2-2006 No.134
Regulations concerning
dispositions for issuing
individual licences in the
postal sector
04-02-2000 15-02-2006 Decree 04-02-200 No.73
Emended by Decree
No.129
Regulation on reserved
area and USO
18-12-2002 13-01-2004 Scope of the reserved
area for maintenance of
the universal service
Quality regulation 19-06-2003 - Decree of the
Communication Ministry
Quality standards for the
time transit of ordinary
mail, priority mail,
registered mail
Tariff regulation 23-12-2003 - New tariffs of reserved
postal services and new
prices of universal postal
services
Annex II: Main Developments in the Postal Sector (2006-2008) 510
Postal law and
regulation
Date of introduction Date of latest
amendment
Remarks
Regulations concerning
provisions of the universal
services and USO
obligations
01-06-2004 - Public Service Agreement
between Poste Italiane
and the Communication
Ministry (“Contratto di
Programma”) for 2003-
2005
Quality regulation 13-03-2006 - Decree of the
Communication Ministry,
Universal service quality
indexes for 2006-2008
Tariff decree and Quality
regulation
12-05-2006 Ministerial Decree on
tariffs and new quality
standards for the
universal service.
Source: Post Itanliane, Ministry of Economic Development.
1.3.2 Universal Service Obligation
The postal legislation (decree No. 261/99) defines the scope of the universal services. In
particular, the following domestic and international services should be provided at
affordable prices:
• Collection, sorting, conveyance and delivery of mail weighing up to 2 kilograms;
• Collection, sorting, conveyance and delivery of parcels weighing up to 20 kilograms;
• Registered items and insured items.
These services also include priority mail, addressed direct mail, newspapers and
magazines. The universal service is provided in all parts of the Italian territory,
throughout the year.
Collections and home deliveries are performed every working day and at least five days a
week.
The express market is fully opened to competition and is outside of the universal service.
In Italy the USP with a ‘Universal Service Concession’ has to deliver in all of Italy. The
losses from providing universal services (e.g. originating from delivering in rural areas)
should be covered by the returns from the reserved area, state subsidies and a Universal
Service Fund to which all mail providers with a ‘Universal Service Licence’ contribute.
Poste Italiane stresses that:
• the net costs of the universal services (accounting for the returns from the reserved
area) are only partially financed by State subsidies (around half of the total amount
that is annually certified by an independent auditor);
• the contributions to the compensation fund from licensee operators are very low
(around 100.000 euro per year);
Country sheet: Italy 511
• any costs not covered by the above-mentioned solutions are at the USP’s expense.
1.3.3 Reserved area
Italian legislation assigns Poste Italiane S.p.A. as the universal service provider of postal
services in the country. Until 1 January 2006 its exclusive rights in the reserved area are
identified by the following price and weight limits: 1.80 EUR and 100 grams. Since 1
January 2006, these thresholds have changed to 1.50 EUR and 50 grams. The reserved
area will end in line with the timescale defined by the new Postal Directive (2011).
The reserved area includes collection, sorting, conveyance and delivery of both domestic
and (in- and outbound) international letter-post items, within the above mentioned limits.
The reserved area also covers registered items relevant to administrative proceedings and
public procurements and registered items relevant to judicial documents with no price or
weight restrictions. Direct mail is open to competition (Legislative Decree 261/99 and
Ministry of Economic Development Order 22/11/01).
Table 0.3 Liberalisation of postal services and the reserved area (2008)
Postal product Within reserved area
(Yes, no, partially or unclear)
Remarks
Bulk mail and consolidation Partially Delivery <50 grams and <1.50 EUR
Consolidation is open to all
B2B non-bulk mail Yes <50 grams and <1.50 EUR
Individual item mail Yes ,,
Cross-border mail Yes ,,
Unaddressed mail No
Parcel mail No
Express mail No
Source: Poste Italiane.
1.3.4 NRA
Until 16 May 2008, the Ministry of communications was responsible for defining and
managing the regulatory framework for the postal sector and was the official regulatory
authority. By order of Legislative Decree May 16, 2008, n. 85,4 the functions of the
Ministry of Communications and its inherent financial, material and human resources, are
transferred to the Ministry of Economic Development. It grants the concession to the USP
to provide the universal service as well as licences for the provision of universal services
and authorisations in areas open to competition. It monitors compliance with the rules of
the universal service provided by Poste Italiane S.p.A. and ensures that licensed and
authorised operators respect the reserved area. It sets tariffs, prices and quality standards
4 Published in the Official Gazette – General Series – no. 114 16 May 2008.
Annex II: Main Developments in the Postal Sector (2006-2008) 512
for services provided by the USP and monitors performance in the light of the standards
laid down (UPU, 2006).
Complaints and redress procedure
The Postal Law describes complaints and redress procedures that apply to the USP (not to
non-USP operators). A request for intervention may only be submitted if a complaint has
previously been submitted and Poste Italiane has not replied or its reply is considered
unsatisfactory.
In cases of serious violations of universal service obligations, the user can directly report
to the Ministry. The Ministry may start appropriate investigations to ascertain any failures
and may impose sanctions. The possibility of reimbursement is provided for by the Poste
Italiane’s Charter of Quality, but only for items subject to tracing (registered items,
insured mail and parcels). Conciliation may be requested for settlements of up to 500
Euros (Poste Italiane, 2007b).
Table 0.4 Regulatory powers NRA
Powers Yes/No/Unclear Remarks
Require data from USP Yes
Require accounting system Yes
Require new data studies Yes
Cancel unlawful rates Yes
Levy Fines Yes
Seek judicial order No
Set new rates for USP Yes
Require downstream access No
Require data from non-USPs Yes
Source: WIK, 2006, Poste Italiane.
1.3.5 Licenses
The postal market is open to competition above 1.50 EUR and 50 grams. Operators must
obtain a licence or authorization. Licensed operators provide services included in the
universal service, while authorized operators provide services outside the universal
service. Both licences and authorizations are granted by the Ministry of Economic
Development (UPU, 2006).
Country sheet: Italy 513
Table 0.5 Entry regulations
Instrument Services allowed under
the license
Conditions for
obtaining the licence
Number of licences
approved
Universal Service Concession - Reserved area and
Universal Service
USO
A, B, C, D, E, F, G, X
1
Universal Service License - Universal services A, B, C, D, F, G, H, I 292
General Authorization - Express services
- Parcel services
A, B, C, D, H, G
1154
Source: WIK,2(006), Poste Italiane.
A = Confidentiality of correspondence.
B = Restrictions on dangerous goods.
C = Data protection requirements.
D = Environmental protection requirements.
E = Obligation to provide all or part of universal
service.
F = Quality, availability, performance, or price
standards.
G = proper response to complaints.
H = Non-infringement of reserved area of USP.
I = Contribution to universal service fund.
X = Deliver throughout the entire country.
1.3.6 Access
The Italian government has implemented no legal provisions to regulate access to the
facilities of the universal service providers. So far, postal operators have not requested the
regulatory authorities to investigate the desirability of such interventions.
Table 0.6 Network access
Upstream/downstream Form of access Regulated?
(Yes, No, Unclear)
Upstream Access to street letter boxes No
Access to outward sorting centres No
Downstream Access to inward sorting centres No
Access to delivery offices No
Access to PO boxes No
Source: ECORYS (2005), Poste Italiane.
1.3.7 Price regulation
In the Italian postal sector, price regulation is conducted by ex ante regulation which
requires that the USP receives a specific approval of the National Regulating Authority
before price changes of universal services can be implemented. The price is capped at a
level that depends on the inflation rate and productivity gains. The NRA may also
intervene ex post if necessary. Furthermore, the Competition Authority may intervene ex
post in the light of competition law.
Annex II: Main Developments in the Postal Sector (2006-2008) 514
Transparency of USP accounts
The USP is required to submit annual accounts to the NRA. According to Decree 261/99,
such accounts must show separate information on reserved area, universal service and
activities outside the universal service (accounting separation). They are verified by an
independent auditor and are submitted to the NRA for approval.
1.3.8 Quality of service
The Ministry of Economic Development sets certain quality standards and is also
responsible for monitoring performance, but outsources this to an independent body.
Italy applies the CEN standard EN 13850 and EN 14508.
Table 0.7 Quality of service USP in 2006
Standard Threshold Performance USP Remarks
International mail:
Inbound: D+3 85% 91.3%
Outbound: D+3 85% 92%
Priority mail: D+1 88% 88.1%
Registered mail: D+3 92.5% 92.9%
Insured mail: D+3 92.5% 98.8%
Ordinary parcels: D+5 93% 96.1%
Source: Poste Italiane.
1.4 The mail market
1.4.1 Mail market overall
Total turnover from the domestic postal sector as a percentage of GDP is about 0.28%.
The number of letter posted items per capita is around 115.
Table 0.8 Size of the mail market in turnover (billion Euro) – rough estimates
Postal product 2005 2006
Bulk mail and consolidation
B2B non-bulk mail
Individual item mail
Cross-border mail
≈ 3.9 ≈ 3.9
Unaddressed mail n.a. n.a.
Parcel mail n.a. n.a.
Express mail n.a. 2.4 – 2.9
Source: TNT Express (2007), own estimates.
Note: Post Italiane does not confirm these data.
Country sheet: Italy 515
Note: Assuming that Poste Italiane has a market share of between 85% to 95% in addressed mail. Poste
Italiane’s turnover on (traditional) mail services is about 3.5 billion Euro’s in 2006 (see Poste Italiane, 2006a, p.
37).
Note: n.a. is not available.
Table 0.9 Size of the mail market in physical terms (million items) (rough estimates)
Postal product 2005 2006
Bulk mail and consolidation
B2B non-bulk mail
Individual item mail
Cross-border mail (outgoing)
≈ 6,800 ≈ 6,800
Unaddressed mail n.a. >2,600
Domestic parcels n.a. n.a.
Express mail n.a. 350 – 400
Source: own estimates based on: UPU, Poste Italiane (2006a), TNT Express italy (2006), www.tnt.it,
Note: Post Italiane does not confirm these data.
Note: The volumes of addressed mail items are based on the assumption that Poste Italiane has a market share
of between 85% to 95%. Poste Italiane’s volumes of traditional mail services plus addressed advertisement was
about 6 billion in 2006 (see Poste Italiane, 2006a, p. 37).
Note: Poste Italiane delivers about 715 million unaddressed mail items, TNT Post delivers about 1.9 billion
unaddressed items, in addition there are many other companies delivering unaddressed mail items.
Note: volumes of express mail are based on information on market shares of Poste Italiane, as provided by TNT
Express italy (2006): 11,8% market share in the domestic express market and a volume of domestic express
items of 43 million (see Poste Italiane, 2006a. p. 38).
Note: n.a. is not available.
1.4.2 B vs C
The figures on mail sent by businesses are based on numbers provided by Poste Italiane.
These figures do not account for possible business mail sent via competing companies,
but their market shares are small.
Table 0.10 Postal streams in the market for addressed mail in turnover (Euro)
Postal stream 2006
B2B
B2C 75% (about 3 billion)
C2B
C2C 25% (about 1 billion)
Source: Poste Italiane.
Note: most of the items within “C to B/C” categories are sent by small business customers (for example Small
Office Home Office - SOHO).
Annex II: Main Developments in the Postal Sector (2006-2008) 516
Table 0.11 Postal streams in the market for addressed mail in physical terms (items)
Postal stream 2006
B2B
B2C 85% (about 5 billion)
C2B
C2C 15% (about 750 million)
Source: Poste Italiane.
Note: most of the items within “C to B/C” categories are sent by small business customers (for example Small
Office Home Office - SOHO).
1.4.3 Market opening
The difficulty of obtaining data on postal volumes prevents a detailed assessment of the
percentage of mail volumes that is open to competition. Various sources (Eurofound,
2007; TNT Post Italy; Postinsight.com) mention that Poste Italiane has a dominant
position with market shares possibly over 90% in addressed mail.
The markets for unaddressed mail, courier services and Direct Mail are fully open.
Further, after the Memorandum of 11 December 2007 signed by the Ministry of
Communications, Poste Italiane and its competitors, a relevant percentage of mail
collected by Poste Italiane (including registered items) must continue to be delivered
through competitors. This represents an interim measure towards the full liberalisation of
the market.5
There is no indication of unlicensed / unauthorised competition in areas where license /
authorisation is required.
1.4.4 Cross-border mail
Table 0.12 Cross-border mail volumes
X 1000 2005 2006
Outgoing 96,700 95,000
Incoming 188,800 199,500
Source: 2005 – UPU ; 2006 – Poste Italiane (questionnaire) and Poste Italiane (2006a).
The main actor is Poste Italiane. Remuneration is according to international UPU
standards.
5 The Memorandum was approved by the National Competition Authority through its Decision of 27 February 2008.
Country sheet: Italy 517
1.4.5 Impact of Innovation
As in other European countries, physical mail volumes are substituted by means of
electronic communication. The extent and speed of this process are less, though, than in
other countries because electronic services are not as widespread and the publishing
industry relies on ‘paper based’ solutions. As a consequence, the development of the
direct mail market has a high potential.
Table 0.13 Impact electronic substitution
Postal product % change in total market volume (avg./year)
Bulk mail and consolidation n.a.
B2B non-bulk mail n.a.
Individual item mail n.a.
Cross-border mail n.a.
Unaddressed mail n.a.
Parcel mail n.a.
Express mail n.a.
Source: n.a.
Note: n.a. is not available.
1.5 Market structure and competition
1.5.1 National postal operator/Universal Service Provider
Currently, the Poste Italiane Group is the principal operator in the sector. The Italian state
owns 65% of the postal operator while the remaining 35% stake is held by the public
savings bank (Cassa Depositi e Prestiti). Since 2005, the Italian government has indicated
that it aims at further privatisation of Post Italiane.
The principal postal services provided by the group include the following:
Postal services:
• Correspondence (single items, registered and insured mail, legal communications and
other registered post);
• Commercial mail (catalogues, non-addressed mail, etc.);
• Direct mail;
• Periodicals (prints, gadgets, books, etc.);
• Electronic communication (telegrams, faxes, telexes);
• Express carriers;
• Packages.
There is no data available regarding the precise market share of Post Italiane, but multiple
sources indicate that Post Italiane has a dominant position in the markets for postal
services. This does not include the express market. Here the most important players are
global companies such as TNT, Bartolini and DHL that have the majority of the market
Annex II: Main Developments in the Postal Sector (2006-2008) 518
share (Databank 2007). of the market share Poste Italiane Group holds 11.4% (Databank
2007).
Table 0.14 Postal network of the national postal operator
2004 2005 2006
Number of post offices 13,855 13,881 13,893
Number of postal agencies 0 0 0
Number of street letter boxes 63,710 62,000 62,000
Per 10000 inhabitants 11 11 11
Source: Poste Italiane (Number of Post Offices at 12/31).
Table 0.15 Division of turnover of the national postal operator per market segment (in million euros) - rounded
Postal product 2007 % of total
Bulk mail and consolidation 2,989 67.6
B2B non-bulk mail n.a. n.a.
Individual item mail 905 20.5
Cross-border mail (inbound/outbound) 217 4.9
Unaddressed mail 36 0.8
Domestic parcels 146 3.3
Express mail 30 0.7
other postal services 98 2.2
Total 4,421
Source: Poste Italiane.
Note: n.a. is not available.
Table 0.16 Division of postal items (in million) of the national postal operator per market segment - rounded
Postal product 2007 % of total
Bulk mail and consolidation 5,000 75.89
B2B non-bulk mail n.a. n.a.
Individual item mail 638 9.69
Cross-border mail (in- and outgoing) 294 4.47
Unaddressed mail 611 9.27
Parcels 18 0.28
Express mail 3 0.05
other postal services 23 0.35
Total 6,589
Source: Poste Italiane.
Note: n.a. is not available.
Vertical and horizontal integration
Poste Italiane is vertically integrated in all levels of the supply chain. The Poste Italiane
group is also active in the market for express and courier services, and unaddressed mail.
Since 2006, UPS and Poste Italiane agreed for UPS to carry the Italian postal service's
international express shipments.
Country sheet: Italy 519
Table 0.17 Overview alliances and partnerships of the national postal operator (2007)
Mail Express Logistics
UPS - International -
Diversification
The company has diversified mainly into retail banking, financial services and insurance.
Due to installed IT systems, rural post offices can connect to the main office and start
selling mortgages, bank accounts and insurance. Further, offering of mobile services
(PosteMobile) represents a first case in Europe of integration between mobile and
financial services (i.e. financial payments by mobile).
1.5.2 Competitor postal operators
In Italy, notably the express courier market is characterised with a high degree of
competition; competitors such as TNT and DHL have a significant market share.
However, within the Universal Service competition remains limited. Although there are
212 operators, their catchment areas are mainly restricted to small, mostly urban areas.
This is not the case for the main competitor - TNT Post.
The TNT Group currently manages its business through two divisions: Express and Mail
(TNT Express and TNT Post). The group’s strategy primarily focuses on investing in its
network.
TNT Post
TNT Post currently has a network which is based on 122 direct and indirect branch
offices throughout the country. The company is organised into three business units:
• Addressed mail –ranging from business advertising to direct mailing and the delivery
of registered mail;
• Unaddressed mail – various kinds of unaddressed distribution;
• B2C – delivery of ordinary parcels from businesses to consumers.
TNT Post also offers a series of printing and enveloping services, thus positioning itself
in the market as an integrated supplier. Printing facilities throughout Italy specialise in
different types of printing: transactional (hybrid) mail or direct mail.
TNT Italy is diversified into mail order, as it recently signed an agreement with Mr. Price
(one of the most important online sales website of electronic products in Italy). The
agreement includes the delivery of the products, installation, in-house test and pick up
service of the full range of products offered on the Mr. Price website: refrigerators,
laundry machines, TV, etc. The agreement covers all regions in Italy, including rural
areas. The strategy seems to respond to the large growth potential of the European market
for B2C parcel deliveries, where there is an increasing “grey” zone between Express and
Parcel services as traditional Parcel services become more express in nature (see
European Express Market Map 2008).
Annex II: Main Developments in the Postal Sector (2006-2008) 520
TNT Express
TNT Express Italy is committed to continuously investing in fleet renewal distribution
and structures, providing them with the most advanced technologies for rapid sorting.
TNT Express owns Italy’s largest Sorting Center in Piacenza, which is fully automated.
Furthermore, it plans the construction of 60 new branches over the next 4 years, in
compliance with the most modern energy-saving technologies. As such, TNT Express is a
fully vertically integrated organisation.
Deutsche Post World Network
Deutsche Post World Network (DPWN) is operating in mail, express and logistics. This
is a mixed group which operates on the international and Italian market in
correspondence, express courier services, logistics and packages. With the acquisition of
DHL Italia in 2003, DPWN is particularly well represented in the express market.
Table 0.18 Overview of main competitors on the postal market (2007)
Postal
operator
Market Volume mail
/ Turnover
mail
# of
employees
Service level
(number of
deliveries per
week)
Coverage
GRUPPO
TNT
(Dutch)
A, B, C
(domestic and
international)
2 billion
GRUPPO
DPWN
(German)
A, B, C
(domestic and
international)
FEDEX
(U.S
American)
A
MPE-
Mailboxes Etc
(British)
Unipost
(Italian)
D
Source: Eurofound, 2007.
Note:
A: Correspondence and express courier services.
B: Parcels.
C: Logistics.
D: Financial, communication and support services to enterprises (correspondence, fax, express courier
services, packaging services, photocopies, translation services, sale of office products, worldwide
money transfer, etc.).
Country sheet: Italy 521
1.5.3 Competition
There is a high degree of competition in the express courier market, which is dominated
by international corporations, such as TNT and DHL. This is not the case for the postal
services within the universal service; where, in practice, only two parties are relevant
Poste Italiane and TNT. Poste Italiane still holds a dominant position in the market for
postal services (Eurofound, 2007).
Eurofound (2007) reported that a company called Uniposta was recently launched in Italy
in preparation for the liberalisation of the service. Little is known about this company,
other than that it seems to be mainly active in unaddressed mail and direct mail. In the
beginning of 2008, Uniposta was taken over by the Omnia Network Group,6 thereby
joining Uniposta’s delivery network and Omnia’s communication services.7
There is no information on the number of consumers that have switched suppliers.
Table 0.19 Number of competitors and degree of competition (2005)
Postal product Market share USP Number of
competitors
Concentration ratio
C3
Bulk mail and consolidation
B2B non-bulk mail
Individual item mail
Cross-border mail
n.a. n.a. n.a.
Unaddressed mail n.a. n.a. n.a.
Parcel mail n.a. n.a. n.a.
Express mail n.a. n.a. n.a.
Total
Source: n.a.
Note: n.a. is not available.
6 The Group's principal activities are to provide logistics, transport and Leasing. The group also provides IT platforms
required for the management of all corporate processes. It operates through 4 business units: the multi media contact
centre services, the logistic and transport services, operating lease services and system integration services. 7 Omnia Network’s Multimedia Contact Centre (“MMCC”) groups together design, implementation and management activities
pertinent to solutions and services of a Contact Centre, CRM and e-commerce; it governs the processing of information and
contains a data-base for marketing, sales and customer care operations.
Annex II: Main Developments in the Postal Sector (2006-2008) 522
Table 0.20 Number of competitors and degree of competition (2006) – rough estimates
Note: Poste Italiane does not agree with these figures.
Note: n.a. is not available.
Current and future profitability prospects.
After restructuring and diversification of the post office network (into banking and
insurance services), Poste Italiane has managed to become profitable to pay its first
dividend in 2006. The direct marketing’s contribution to revenues is less significant today
than in the past.8 Instead, innovative and integrated services compensated the general fall
in correspondence in the traditional sector performances. Both express courier and
postage stamps remained good in term of revenues, while parcels contracted in volumes.
The net cost of the universal service in Italy is only partially financed by State subsidies
(around half of the total amount that is annually certified by an independent auditor).
Today, any costs not covered by the above-mentioned solutions are at the expense of the
USP. According to an article in Fortune (June 12, 2006), the losses are said to result from
the universal service requirement to deliver mail across the country five days a week,
even in unprofitable (rural) areas.9
Meanwhile, the competition (TNT’s Postal division – mainly active in unaddressed mail)
seems to have grown considerably (13.5% turnover growth from 2006 to 2007).10
1.5.4 Competition issues
The National Competition Authority (NCA) verifies possible predatory pricing practices
or an abuse of the dominant position by Poste Italiane in the postal market. Furthermore,
special tariffs (discounts) by Poste Italiane within the universal service must be
preventively submitted to the NRA for evaluating their correspondence with the
legislative principles (such as cost orientation).
8 In France and Germany, advertisers send nearly 50 percent of the mail; in Italy, it's just 28 percent – see
http://money.cnn.com/2006/06/09/news/international/poste_fortune/index.htm. 9 See http://money.cnn.com/2006/06/09/news/international/poste_fortune/index.htm.
10 see http://www.tnt.it/it/it_chi_tnt_italia.html.
Country sheet: Italy 523
In 2005 the Italian Antitrust Authority issued two related measures, opening an
investigation of a possible “abuse of dominant position” by Poste Italiane SpA and Postel
SpA, in relation to the tariffs charged for franking Hybrid Electronic Mail, and an
“unlawful strategy” designed to hinder the development of competition in the supply of
printing and enveloping services. In April 2006, at the end of the investigation, the
Authority imposed a fine of 1.6 million euros on Poste Italiane. VBB on Competition
Law, Volume 2006, No. 4, states that: “Pursuant to the decision, Poste Italiane has 45
days to define new general conditions of access to the postal network, in conformity with
competitive principles, modify the previously stipulated conditions and ensure that actual
and future competitors have equal access with Postel and other subsidiaries. Among these
conditions, the ICA clarified that Poste Italiane must allow such operators to deliver
hybrid mail to the postal network's receiving centres, thus eliminating the obligation to
have the Post Office take delivery at their printing works.” Confident that it operated in
full compliance with market regulations, Poste Italiane has appealed the Antitrust
Authority’s ruling before the Lazio Regional Administrative Court. Based on
documentation that Poste Italiane provided (to obey the Authority’s order set out at the
end of the preliminary investigation (n.15310/2006), on March 2007) the Competition
Authority agreed with the position of Poste Italiane.
In February 2008 - Italy's antitrust authority said it has decided to accept commitments
made by Poste Italiane SpA to settle an investigation into the post office's market position
in liberalised services. The antitrust authority had been investigating complaints from a
series of private postal operators (including TNT Post). The investigation looked at
supply deals made by the post operator (between Dec 2000-Jan 2007), together with
proposals in a tender procedure, that were seen as strengthening Poste Italiane’s market
position. Poste Italiane promised to tender concessions to collect and deliver post in 70
different urban areas with an overall value of 168 mln eur over three years.11
Level playing field issues
In Italy all universal services offered by the USP are exempted from VAT, other mail
service providers are not exempted.
Directive 97/67/EC allows access to the public postal network, besides the above
mentioned case law on hybrid mail services, no competitor has asked for access.
There has been some debate about direct compensations from the Government to cover
the losses of the universal services (these subsidies were in addition to the finances from
the Universal Service Fund). One could argue that such subsidies prevent entry from
foreign operators and discourage innovation. The European Commission recognised that
the public funds granted to Poste Italiane for years 2000-2005 and for 2006-2008
respected the European law on State aids, since they under-compensated the costs of the
universal services. However, the commission “regrets that Italy put the aid in question
into effect” as the measure “is liable to affect […] trade and distort competition”.12