Challenging times for Czech Republic

Traditional postal service providers are experiencing challenging times. The golden age of mail is gone, killed by the advent of electronic communications, while postal operators in the Czech Republic and abroad are pushing to discover new rationales for their existence.
As of 2009, Czech Republic Post (EP) will be transformed into a joint-stock company. This should make the company more competitive, flexible and customer-friendly, according to the government. The move could also clear the way for a future privatization, observers say. Apart from this inner change, EP must cope with outward pressures. Recent research has shown that further switching from traditional postal services to electronic communications is still ahead, said Gabriel Pleska from the EP press department. “EP is aware of the fact that there will be fewer regular letters to deliver,” Pleska noted.
“We’ve focused on developing e-services for some time.” For example, the company offers a digital version of registered mail delivery service — registered electronic post, which can be compared with document custody services performed by notaries. EP serves as a mediator guaranteeing the privacy of delivery, assuring the electronic document can be accessed only by the authorized recipient, Pleska explained. There are also projects under way to turn EP’s extensive network of offices into joint contact points to state authorities.
At 3,400 branches nationwide, people can order certified excerpts from the business and land registries, Pleska said. EP has also strived to fill the niche opened up by transforming consumer habits, according to Pleska. “This transformation of lifestyle is reflected by our ‘post office in a shopping mall’ strategy,” Pleska said. EP has set about establishing offices in shopping centers, and people busy during the week can redirect their package deliveries there, picking up their mail while shopping on the weekend, he said. EP will release more details about its strategic plans for the future at the end of the year, said EP spokeswoman Dita Vaclavikova.
Earlier this year, the Finance Ministry approved a hike in postal fees proposed by EP, which will take effect Jan. 1. The price of delivery of a standard letter, for example, will increase from 7.5 to 10 KE and sending a priority registered letter of up to 20 grams will cost 26 KE instead of today’s 19 KE.
Other postal operators were also critical. The combination of the price hike and the liberalization postponement is bad news for customers, according to Petr Dusek, marketing director of TNT Post, a Netherlands-based postal operator and the largest distributor of commercial leaflets in the Czech Republic. Had the postal market opened as originally planned, postal service prices would have never reached such highs,” Dusek said.
Today, TNT Post focuses on corporate clients. But, once the market is open to fair competition, TNT Post will offer fully fledged postal services, Dušek said. There has been visible progress in EP’s services over the past five to seven years, at least in large cities. “However, the improvement could have been better, had the liberalization of postal services proceeded in a faster pace,” he added. The Czech Telecommunications Office (ETÚ), the state regulator in the field of postal services and electronic communications, has repeatedly criticized EP in its evaluation reports for numerous shortcomings — customer neglect, early closings of post offices or failed or mistaken deliveries. Last year, the ETU imposed fines worth 7 million KE on EP.
1 USD = 173.021 HUF