An assessment of the costs and benefits of Consignias current Universal Service Provision

Postcomms primary duty is to act in a manner best calculated to ensure the continued provision of a Universal Postal Service (UPS) at an affordable uniform national tariff. At present, Consignia is the sole provider of the UPS in the UK and is required to provide that service under the terms of the licence that it has been granted by Postcomm. To better understand the nature of this licence obligation, Postcomm is keen to understand the extent to which the provision of the UPS, within Consignias broader provision of postal services, may impose on it a net cost or confer a net benefit in the current market environment.

Postcomm asked an independent consultant, Andersen, to advise on approaches to assessing the costs and benefits of Consignias universal service provision. Postcomm also asked Andersen to provide a high-level critique of Consignias data, to compute results, and to conduct appropriate sensitivity analyses. The results of Andersens analysis are presented in the tables contained in this report. Finally, Postcomm asked Andersen to advise on an appropriate interpretation of the results in the context of Consignias overall business. The approach adopted in this paper, comments on data, and interpretation of the results are consistent with Andersens advice.

Full details available at: http://www.psc.gov.uk/index.htm