Regulator for ending Deutsche Post letter monopoly

Germany’s postal regulator supports ending Deutsche Post’s monopoly for delivering standard letters by the end of 2007, it said on Thursday.

Deutsche Post had shown that it can hold its own “despite steps in the past toward liberalisation of the letter market,” said Matthias Kruth, the head of the regulator that oversees postal, gas, electricity and telecoms operations in Germany.

The regulator therefore saw “no reason not to let (Deutsche Posts’s) exclusive licence run out on Dec. 31, 2007,” he added.

The German postal market is worth 23 billion euros ($27.7 billion) a year in sales at present, Kurth said, adding that Deutsche Post accounts for about two-thirds of that.

While package, express and courier services are already open to competition, Deutsche Post — a former state agency in which the government retains about a 45 percent stake — has a near-monopoly in the letter market, where it has a market of share of 93 percent.

Post’s rivals, including United Parcel Serice (UPS.N: Quote, Profile, Research), FedEX (FDX.N: Quote, Profile, Research), and its European peers are barred from collecting and sorting letters of up to 100 grams in weight. While that limit is set to fall to 50 grams at the start of 2006, the postal regulator said this was unlikely to significantly change the competitive situation in the letter market.

Post shares were down 0.5 percent at 19.45 euros by 1033 GMT, underperforming a roughly flat blue chip DAX index.

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