TNT stamp price regulation workable
A proposal before the Dutch parliament to regulate mail company TNT’s stamp prices as part of market liberalisation is workable, the Dutch post and telecoms regulator OPTA said on Wednesday.
Analysts have said the proposal by the Christian Democrats and the Labour party, both part of the ruling Dutch coalition, could knock up to 10 percent off TNT’s valuation.
TNT shares were down 2.1 percent at 31.49 euros by 1440 GMT.
The proposal would set stamp prices for part of TNT’s mail business based on costs and a “reasonable return” initially, followed by increases in line with inflation in the following years.
“The proposal as it is on the table now … the benchmarking based on costs and a possible mark-up is something that we have plenty of experience with in the telecoms market,” OPTA Chairman Chris Fonteijn said at the regulator’s annual press conference.
“It’s nothing that we think will saddle us with enormous problems … Cost allocation is always an issue, but we think that it is a workable system in itself,” he said.
The proposed amendment to the country’s new postal law would affect the “universal service”, which includes delivery of letters and parcels and represents a significant portion of TNT’s mail revenue.
A TNT spokesman said amendments to the law could still be changed and that the company would react only to the final proposals.
The economy ministry is working on its reponse to the various amendments and will send a letter to parliament soon, probably next week, a spokesman said.
VOTE DELAYED
Last month, the Dutch parliament again delayed a vote on the postal law, which is meant to end TNT’s remaining monopoly, as the economy ministry requested more time to study amendments.
TNT still has a monopoly on letters weighing up to 50 grams, representing about half of the 2 billion euro Dutch mail market. The government wants to open the market from January 2008.
Christian Democrats and Labour are at odds over whether the law should set minimum work regulations for the industry.
Labour has threatened to block the law unless it specifies that post companies can use only carriers with employment contracts.
TNT is one of the biggest employers in the Netherlands with about 59,000 people. Its two main local competitors, privately held Sandd and Deutsche Post’s Selekt Mail, employ few permanent staff and pay carriers by the items delivered.
Analysts have said uncertainty over the timeframe and conditions for liberalisation of the Dutch market have weighed on TNT’s shares, which have fallen 2 percent since the start of the year, underperforming the DJ Stoxx industrials index by 13 percent.
