ComReg “concerned” about An Post price increases
Ireland’s Commission for Communications Regulation (ComReg) has indicated that it is “concerned” about An Post’s 2017 price increases. Speaking at the Irish Parliament’s Communications Committee hearing on the matter, Kevin O’Brien, the ComReg Commissioner, said: “According to An Post’s media release dated 6 December 2016, we understand that An Post, following the proposed repeal of the price cap, is planning price increases in 2017 of the order of 14%-35%.
“ComReg is concerned that price increases of such magnitude could appreciably hasten the ongoing decline in letter mail volumes, thereby further jeopardising the future of the universal postal service.”
Given that our core function is to ensure the provision of a universal postal service for all, we make a number of key points.
O’Brien told the Committee that ComReg had concerns because: “large mailers are very price sensitive and will move to electronic substitutes”; and “there is limited scope to gain significant additional revenue from SMEs”.
The Commissioner concluded: “Significant restraints to price increases exist in relation to the majority of mail as bulk mailers can choose cheaper options, including electronic substitution, and such options if adopted would lead to a permanent decline in mail volume.
“With a view to the medium-term sustainability of the universal postal service, any price increases must be combined with the development of new business models, the achievement of cost structure changes and efficiencies, and ultimately a fundamental consideration of what type of universal service is required and desired by the State.”
