Swiss Post: Competition calls for entrepreneurial freedom

Swiss Post believes in offering a top-quality basic service. And it intends to do so, efficiently and successfully, even in a postal market completely deregulated by legislation. This is certainly possible, providing Swiss Post is granted the necessary entrepreneurial freedom as part of this new legislation. In its feedback during the consultation process, Swiss Post requested a number of amendments, the most important of which being – in the absence of any state guarantee – the opportunity to determine for itself in which markets it will operate. There was also mention of a banking licence and a basic service mandate without the limitations that result from having to define individual infrastructure elements.
Swiss Post expects this new legislation to completely open up the postal market. Over the coming years, therefore, it wants to develop and thus prove itself capable of providing an efficient basic service in an open market. Thanks to successful restructuring, improved levels of efficiency and positive performance figures in recent years, it is already well on the way to achieving this goal. The current positive results mean that Swiss Post can make important investments in advance of complete market deregulation in what is expected to be just under four years. It can also continue to promote innovation and customer orientation, consolidate the pension fund and compensate the Swiss federal government for capital it provided. Swiss Post: Competition calls for entrepreneurial freedom
08.05.2008

Swiss Post believes in offering a top-quality basic service. And it intends to do so, efficiently and successfully, even in a postal market completely deregulated by legislation. This is certainly possible, providing Swiss Post is granted the necessary entrepreneurial freedom as part of this new legislation. In its feedback during the consultation process, Swiss Post requested a number of amendments, the most important of which being – in the absence of any state guarantee – the opportunity to determine for itself in which markets it will operate. There was also mention of a banking licence and a basic service mandate without the limitations that result from having to define individual infrastructure elements.
Swiss Post expects this new legislation to completely open up the postal market. Over the coming years, therefore, it wants to develop and thus prove itself capable of providing an efficient basic service in an open market. Thanks to successful restructuring, improved levels of efficiency and positive performance figures in recent years, it is already well on the way to achieving this goal. The current positive results mean that Swiss Post can make important investments in advance of complete market deregulation in what is expected to be just under four years. It can also continue to promote innovation and customer orientation, consolidate the pension fund and compensate the Swiss federal government for capital it provided.
Amendments to the law are unavoidable
With two-thirds of its sales volume already exposed to competition, Swiss Post knows how to hold its ground. Even so, the objectives set with respect to the deregulation of the letter market will only be achieved if well-balanced postal legislation is established. As Swiss Post pointed out in its feedback to the Federal Council during the consultation process, some important amendments must be made to the draft legislation if the necessary framework conditions are to be established.
Basic service tailored to the market
Swiss Post will always maintain a dense network of access points. However, it is the customer who is at the heart of the basic service and not age-old structures. A statutory infrastructure mandate is thus not appropriate and prevents Swiss Post from acting innovatively towards changes in customer behaviour.
Banking licence required
Swiss Post would welcome the placing of PostFinance under FINMA supervision as is the norm for banks. And besides, in a competitive situation such as this, a banking licence is the only sensible solution. In line with the banking divisions of successful foreign postal organizations, PostFinance must develop into a retail bank, offering mortgages and credit independently. The loss of the state guarantee is only to be expected.
A level playing field
The financing of the basic postal service must be reinforced and more coherently integrated into the fund model proposed in the consultation draft. It should not be the case that the basic service concession holder is solely responsible for augmenting the fund.
Swiss Post must be granted the necessary scope in order to ensure sustainable financing; this is the only way that it can finance its services using its own resources. A level playing field is also required in terms of working conditions. While private operators need only comply with the standard industry employment conditions, Swiss Post is expected to negotiate a collective employment agreement, promote equality and factor in regional-political concerns. This is simply not possible in an open market over the long term. The results of the study on market liberalization commissioned by the Federal Department of Environment, Transport, Energy and Communications are proof of this. The study forecasts major losses in market shares and huge deficits in this particular case. The specifications are the same for all providers. Swiss Post therefore advocates the quick development of an industry-wide collective employment agreement.
To guarantee commercial freedom for Swiss Post, as envisaged by the Swiss federal government, the best solution would be a public company under private law in which the federal government holds a majority stake. Swiss Post should be able to determine for itself in which markets it will operate: Faced with an open market, the proposed purpose clause would be too restrictive on Swiss Post.