John Modd talks to Aavo Kärmas, the chairman of the Management Board and CEO of Eesti Post – the Estonian Post – about operating in one of the world’s most ‘wired’ societies.
Eesti Post – Estonian Post – is the national postal operator for the smallest of the Baltic Republics, serving a population of 1.3m spread across 45,227 square kilometres.
The company is operating in an economy that was growing at 7.6% in 2011, driven by the manufacturing and construction industries, but also the important information technology and communications sectors.
The postal service itself saw a 4.1% year-on-year growth in its EUR 48.2m revenues in 2011, despite a 10% drop in mail volume, with net profit at EUR 1.2m. The company handled 43m letters and 1.8m parcels through a network including 337 post offices and 114 Post24 parcel terminals, with a work force of 2,500 people.
Aavo Kärmas has been chairman of Estonian Post since March 2012, and a member of the board since 2006, before which he worked for Estonia’s largest door and window company.
Educated at Viljandi College and at Tallinn Technical University, where he studied economics, Kärmas is a keen naturalist and has participated in several environmental protection projects. He plays volleyball and enjoys fishing.
Modd: Before talking specifically about Eesti Post, I would like to understand more about Estonian society, and how wired it is, since it seems to me this must significantly influence the Post’s strategic direction.
AK: Estonia is one of the most advanced e-societies in the world, an incredible success story that grew out of a partnership between a forward thinking government, a pro-active ICT sector, and a switched on, tech-savvy, population. 77% of the population are Internet users and 71% of households have access to the Internet at home. There are 120 mobile phones per 100 users.
e-Estonia is using advanced technical solutions to create a stronger economy, a better community and a brighter future. Solutions include DigiDoc, Digital Signature, e-Cabinet, e-Law, e-Police, e-Prescription, e-School, e-Tax, Electronic Health R.cord, Mobile-ID, and M-Parking.
Aavo Kärmas has been Estonian Post chairman since March 2012
Let me give you a few examples of what e-Estonia means in practice. You can vote in elections from the comfort of your own living room, as 25% of voters did in the 2011 parliamentary elections. You can complete your income tax returns in five minutes or sign a legally binding contract over the Internet, from anywhere in the world, via your mobile phone. Entrepreneurs can register businesses in as little as 20 minutes; check vital company, property and legal records online; and even integrate their own secure services with the ones offered by the state.
Thanks to e-Estonia, interaction between government agencies, and between government and citizens, has made bureaucracy a thing of the past and transformed efficiency.
What is the relationship between the government and the post?
Eesti Post is a 100% state owned company. The Minister of Economic Affairs and Communications represents the state as sole shareholder. The company has a Management Board of two members who are responsible for the everyday management of the company and a Council of seven who supervise the actions of the Board. The members of the Council are partly appointed by the Minister of Finance and partly by the Minister of Economic Affairs and Communications. The sole shareholder makes the Statute based important business decisions regarding the company’s actions. As Chairman of the Board, I am accountable to the sole shareholder and to the Council.
Eesti Post as a postal service provider is also accountable to the Competition Authority as regulator. Postal services are monitored as the Postal Law sets obligations and liabilities for providing universal service; and, regarding other services, Eesti Post is subject to review under the Competition Act. We present periodical information on our services, which the Authority turns into an annual postal service report.
So, given this is the social and political environment in which you operate, describe your mission and strategy.
The mission of Eesti Post is to reach everyone in Estonia by offering quality services and flexible solutions in postal services, logistics and infologistics. We want to be the most reliable partner for our customers, offering innovative solutions.
Given the inevitable and ongoing decline in traditional mail services, the greatest opportunities for expansion are in logistics and infologistics. Priorities for investment are in these two areas, plus expanding geographically in the Baltics and creating an effective service network. In 2011 investments totalled EUR 2.45m.
I am happy that Eesti Post’s strategy is reflecting the general trends in Estonia. Let me give you a couple of examples.
We have launched services where business clients can send and receive invoices and other documents electronically, and all document handling can be made digital. In 2011 Mail Centre was launched, through which registered letters formerly sent on paper can now reach the client electronically, quickly and conveniently.
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Source: Mail & Express Review, December 2012