Russian post could break under rising salaries
Russian Post’s losses in 2007 might be 3 times as high as anticipated in 2006. The forecast will prove right if the company continues raising the employees’ salary. It refused to mention the exact figure, but said the problem can be solved by either increasing tariffs or asking government for help.
According to forecasts, Russian Post’s losses will be some 6bln rubles (USD230mln) in 2007, despite the fact their incomes will grow by about 20% from 58bln rubles (USD2,2bln) to 70bln rubles (USD2,7bln). This was announced by Igor Sirtsov, the company’s General Director during the CeBIT exhibition. He said the company’s losses will grow if it continues increasing the employee’s salaries without any compensation from the government for postal services.
Mr. Sirtsov admitted that Russian Post ended 2006 with considerable losses for the company, however refused to mention the figure (the company announced earlier its losses would be some 2bln rubles or USD77mln). In 2005 the company announced 100mln rubles revenues.
Russian Post’s Director General Igor Sirtsov The post’s head said the Russian Federal Tariff Service is now considering two ways to change the tariff policy. He added that the first way is to increase tariffs and the second – to receive support from the government.
The Russian Information Technologies and Communications Ministry has a clear view of the post service development prospective. Depute Minister Dmitry Milovantsev said the main aim is to improve the service quality, which will help the company to become compatible on the service market, as well as increase the number of customers.
Despite all the problems Russian Post is continuing its development. The company intends to enter foreign markets. And the first in the company’s list is the German market, where Russian Post intends to open an office soon. Igor Sirtsov said they studied thoroughly the experience of their foreign collogues in tuning the postal traffic. The company will act on its own and offer its services to the Deutsche Post and other large German companies on the market. The company say the work results in Germany will show if it is worth opening similar offices in other countries with large Russian diasporas, like Israel for instance.
