La Poste has no competition in letters market, says ARCEP

A weak economic situation and declining mail volumes have meant that no significant rivals have emerged for La Poste since the French letters market opened fully to competition at the beginning of 2011. That is the view from the French communications regulator ARCEP, as it published its annual report for the 2011 year.

The French monopoly on letters 50g and below ended in January 2011, but by the end of 2011 no authorized service provider was able to capture a significant share of the market for itself, said ARCEP.

La Poste continues to hold a “virtual monopoly” on delivering mail items across the country, the regulators said.

Jean-Ludovic Silicani, the ARCEP chairman, commented: “2011 was the year that the postal services market was fully opened up to competition. However, the weakened economic situation in which the postal sector is developing explains why this market liberalisation did not translate into a signficant increase in competition.”

The biggest rival to La Poste in the mail market, Adrexo, abandoned its dedicated correspondence network in 2007 because of the postponing of market liberalization. Since then the decline in mail volumes and the resources needed to set up a delivery network have kept out major providers.

Although the decline in mail volumes in 2011 slowed compared to 2009 and 2010, the average for the past four years has been a 3.6% annual volume decline.

France does have a EUR 1.1bn mail preparation market, companies helping sort and finish mail for entry into La Poste’s network.

But in the French domestic delivery market, other than Adrexo, only 17 companies are authorized to provide deliveries, and these are only small firms operating in local areas.

ARCEP said it will continue to work to try to encourage modernization and quality of postal services.

It said if competition does capture significant share, France’s postal laws allow for rivals to pay into a general fund to help support the universal service.

Volumes

Within the 2011 annual report, ARCEP said the market for letters under 2kg in weight in France accounted for EUR 7.5m in 2011, 1.3% down on 2010. Volumes were 14.3bn, 3.2% down on 2010.

Addressed admail was 20% of the market in revenue, 30% in volume, contracted only 0.5% during the year by value, 1.5% by volume. Other addressed mail fell 1.5% in revenue, 3.9% in volume.

Outward international mail saw revenues stable (up 0.1%), but volumes down 6.9%, around 30m fewer letters.

During 2011, tariffs went up by 2.2% (close to the 2.1% inflation), including a 3.2% rise for single-piece stamped letters, 3.4% rise for advertising mail and 2.3% rise for parcels.

Priority mail delivery times, which improved steadily from 2005 to 2009 before a disappointing 2010, were better again in 2011, with 87.3% of letters delivered next day, up 3.9% on 2010, 97.5% delivered in two days, up 1.5%.