McKinsey recommends opening Israeli mail market to competition in 2006-10

McKinsey and Co. has recommended to the Ministry of Communications to open Israel’s mail market to competition beginning in 2006 and finishing in 2010.

McKinsey predicts that the Israel Postal Authority will lose over NIS 500 million in revenue from opening the market to competition.

McKinsey recommends opening the business mail market to competition on January 1, 2006, and gradually opening other sectors over a four-year period ending on January 1, 2010. A half-way station would be on January 1, 2008, and the private sector would be opened to competition on January 1, 2010.

The market for ordinary letters up to 500 grams would be opened to competition. McKinsey recommends opening other sectors, based on type of activity and customers, in stages. McKinsey’s report is a only a draft for the purpose of soliciting comments from the relevant entities, including the Ministry of Communications, Postal Authority, and companies in the sector.

McKinsey notes that opening the market to competition would involve a 5-10% price hike, because post office rates are very low and have not been revised in real terms in years.

Published by Globes [online] – www.globes.co.il – on July 31, 2003

Copyright 2003 Globes. Source : Financial Times Information Limited.