Israel debates opening postal market to competition

After tackling the domestic telecommunications market
and pushing through the Bezeq Law that will allow new
operators to launch their services, Communications Minister
Reuven Rivlin has sought out a new challenge: postal
services. This week Rivlin announced that he would hold a public
debate on the pros and cons of opening the domestic postal
service market to competition, a move called for by a
committee headed by David Brodet in August 1999. The Postal Authority declined to comment on the
initiative, while the chairman of the Courier Association
in Israel, Udi Dagan, welcomed it. Today only the Postal Authority is allowed by law to
operate domestic mail and courier services. Although some
of the international courier companies operating in Israel
– such as FedEx, DHL, and UPS – do have courier fleets
delivering envelopes inside the country, their operations
are actually illegal although enforcement is rare. If the market is opened to competition, the private
companies will be able to move more aggressively into the
local courier market, as well as offer international mail
services, said Dagan, who noted that the new players in the
market would likely stay away from domestic mail. “Private companies will be able to compete more fairly
with courier services run by the Postal Authority and raise
the standard of service,” he said, adding that the cost of
international mail would also likely drop. Two years ago, the Brodet committee recommended
immediately opening the postal sector to full competition,
converting the Postal Authority into a government holding
company with two separate branches – one to supply
services, the other for over-the-counter transactions – as
well as immediately reducing postal rates by 6% and
expanding the Postal Bank’s services. Rivlin’s spokeswoman said that Rivlin has neither
adopted nor rejected the Brodet findings, noting that the
minister was just starting to examine the issue. Rivlin, has however, expressed concern in the past
that opening the market could have a detrimental effect on
the ability of the Postal Authority to provide service to
every citizen anywhere in the country. A ministry statement
said that it intends to open the market gradually while
remaining committed to the financial stability of the
Postal Authority and universal postal service. “Opening the domestic postal services market to
competition follows a worldwide trend,” the ministry said.
“In recent years Western countries have begun liberalizing
the postal sector by giving permits to competitors to
operate in this market. “However, the postal markets in these countries
remain, for the most part, dominated by one major player,
usually the state-owned service, while other smaller
operators are operating in niche areas.” Rivlin also plans to hold talks with Postal Authority
officials to hear their position on the issue.
JERUSALEM POST, 03rd August 2001