Czech Post Office to raise prices from February

Ceska posta, the Czech Post Office, will raise the prices of key services as of February next year, spokesman Ladislav Vancura told CTK today.

The price of stamps on letters and postcards will grow by Kc1 to Kc7.50. Experts said the price increase would raise both sales and net profits for the Post Office.

“Demand for this type of services is not elastic in terms of prices, that is, a price change does not result in a remarkable change in demand,” Colosseum analyst Stepan Pirko told CTK.

Ceska posta ended last year with net profits of Kc700 million, a growth from Kc392 million a year earlier.

Vancura said the price increase was due to higher costs of fuels and energies and higher value-added tax, as well as to increased demands for quality after Czech accession to the EU.

He added the price increase would affect the budgets of both companies and households, but the impact should not be dramatic.

“The current low prices are possible mainly owing to a low level of wages in the Czech Republic and at Ceska posta in particular,” Vancura said.

But he added the money raised through the price increase would not be used on wages but above all on the development of the company.

IT Ministry spokeswoman Klara Volna said the competition of e-mail was forcing Ceska posta to look for new ways to keep its profits and stay independent of the state budget at the same time.

Ceska posta runs a network of 3,400 post offices and employs about 39,000 people. Next year, it plans to sack about 500 of them and to transform itself into a joint-stock company owned by the state.

The current government is not considering selling the Post Office at the moment.