ARCEP defines the framework for La Poste’s tariffs for 2006-2008

Paris, 13 June 2006

The postal regulation law of May 2005 assigned responsibility for regulating the tariffs of postal activities to ART, which thereby became ARCEP.

Under its new responsibilities, ARCEP monitors La Poste’s universal service tariffs: it approves the tariffs of the services under monopoly (domestic items of correspondence weighing less than 50 g and costing less than €1.325, i.e. two-and-a-half times the base tariff) and establishes the multi-year framework (price cap) for the incumbent operator’s tariffs.

• The price cap is set at 2.1% per year

 

Upon the conclusion of preparatory work done with La Poste, ARCEP established the ceiling for postal tariffs for the years 2006 to 2008. This ceiling is set at a 2.1% increase per year, based on the following hypotheses :

- 1.8% inflation (consumer price index)

- a postal market in a slight decline (-0.35% per year)

This decision occurs during a period when the postal market is moving towards a more competitive structure, with the prospect of full liberalisation in 2009. It is also part of a major movement by La Poste to adapt its industrial production facilities, requiring high investments. It succeds to a period when major tariff increases followed long periods of freeze.

• Taking the economic context of the letter market into account

 

The authorised evolution of tariffs takes into account the new context of postal markets, with volumes of addressed items stagnating since 2000 and the possibility of declines in coming years.

The principles of the framework are as follows :

- if postal volumes evolve as expected (0.35% decline per year), the pricing framework will allow La Poste to protect its operating margin, as long as it continues to improve its efficiency at the same rate as in the recent period

- if volumes improve better than expected, the pricing framework will be tightened, to the benefit of the consumer

- if volumes decline more than expected, the pricing framework will be released and La Poste will have greater manoeuvring room to handle it

- if La Poste improves productivity more than required by the pricing framework, the framework will benefit it entirely

This provision gives La Poste three-year visibility for the evolution of its tariffs, and allows it to continue to adapt to more competitive markets.