Financing the Universal Service Obligations in Belgium Background, Past and Current Situation in a Nutshell Presentation BIPT (not binding) Bern, 9 April CA Session 2014 1
Agenda Belgium 1. Key figures of the Belgian postal market 2. Designated USP – bpost 3. European framework – Postal Directive 4. Universal Service Obligations 5. Calculation and financing of the USO until 31 December 6. 2010 Calculation and financing of the USO from 1 January 2011 7. Reference work of the European Regulators Group for 8. Postal services (ERGP) – reference scenario 2
1. Belgium 3
2. Key figures of the Belgian postal sector (1) Postal incumbent: bpost (designated until 2018) • 5 postal services providers acquired their licences under the system which • was applicable before the adoption of the Act of 2010 May 21, 2013: BIPT granted TBC-POST a postal licence • Express sector: major international integrators such as DHL, FedEx, TNT, UPS • More than 90% of turnover generated on the postal services market is • generated by 9 players. The rest of the market is represented by more than 700 small companies or self-employed Total turnover: ± 3 billion EURO in 2012 • Number of letter-post items per capita per month: 18.4 • Employment: ± 1% of total employment in Belgium, representing close to • 33,000 direct positions Quality: in 2012, almost 94% of priority mail was delivered next day on time • 4
2. Key figures of the Belgian postal sector (2) Principal actors on the Belgian market for the provision of postal services in 2012 (Revenue) Operators Addressed mail Parcels/Express Advertising mail Press Intl mail bpost DHL Intl DPD Belgium Federal Express Europe G3 Worldwide Geodis-Ciblex Belgium GLS Belgium TNT Express Belgium UPS Belgium These actors account for more than 90% of the revenues and market shares of the Belgian postal sector. 5
2. Key figures of the Belgian postal sector (3) Revenues and market shares of the postal service for 2010, 2011 and 2012 Revenues (m€) Market shares 29% 3056 2158 897 71% 2012 31% 3135 2128 1007 2011 69% 2973 30% 2002 971 2010 70% 0 500 1000 1500 2000 2500 3000 3500 bpost others 6
3. Designated USP bpost bpost till 31 December 2018 Year 2007 2008 2009 2010 2011 2012 2013 Operating income 2276 2262 2250 2318 2365 2416 2429 (€ Mio) EBIT 183 222 240 319 359 404 436 (€ Mio) Profit 117 179 163 210 (57) 174 288 (€ Mio) Employees 30 660 29 618 29 311 27 973 26 625 25 683 32 571 (FTE) 7
4. European framework – Postal Directive (1) Green Paper in 1992 If no change, 1. postal services will disappear or at least will not enjoy growth in communication and transport sector 2. postal services will focus on business customers who represent 4/5 of postal operators turnover 3. clear obstacle to internal market (essence of EC) 4. In many cases subsidised by the telecom sector Important Focus on Universal Services 8
4. European framework – Postal Directive (2) Postal Directives 1. Subsidiarity very important 2. Gradual establishment of a level playing field • Via the gradual shrinkage of the reserved area • Via an important focus on USO EU 12 EU 15 EU 25 EU 27 EU 28 2006 2007 2008 2011-2013 1992 1995 1997 1998 2002 2003 2004 (16 MS) – (11 MS) Postal Postal Postal Green Full Directive 1 Directive 2 Directive 3 Paper Opening Market Opening 2: Market Opening 3: Market Opening 1: Domestic > 100 g or 3 Domestic > 50 g or 2.5 Domestic and cross times the standard tariff times the standard tariff border > 350 g or 5 and the whole cross times the standard tariff 9 border
4. European framework – Postal Directive (3) Different Postal Directives Postal Directives Objectives 1. Protect and promote reliable, affordable and efficient universal service 2. Promote a fully operational international market Directive 97/67 Minimum definition of USO 1. 2. Maximum definition of Reserved Area Directive 02/39 1. Modernisation of postal sector explicitly addressed by Lisbon 2. Decrease of Reserved Area Directive 08/06 1. Rules for financing the USO 2. No more reserved area
5. Universal Postal Obligations (1) European directive At the European level, the postal directives of 1997, 2002 and 2008 define the general framework of the Universal Postal Service (UPS) obligations. These directives provide for: the right for every user to enjoy the permanent provision of postal services within the UPS of specified quality at all points in the territory and at affordable prices for all users; a density of the points of contact and of the access points taking account of the needs of users; one collection a day, at least five working days a week; one delivery to the home or premises of every natural or legal person (or to appropriate installations by way of derogation), at least five working days a week; the collection, sorting, transport and delivery: o of postal items up to 2 kg; o of postal parcels up to 10 kg; the services for registered items and insured items. 11
5. Universal Postal Obligations (2) Belgian legal framework Which products? Which obligations? • Uniform and affordability tariff Postal items < 2 kg • Postal items delivery to all the houses • One access point per municipality National postal parcels < 10 kg Incoming postal parcels < 20 kg • Per municipality: at least one Registered items collection, one sending and one Insured items delivery 5 days/week 12
6. Financing of the USO until 31 December 2010 (1) FDC (Fully Distributed Cost) Description Advantages Disadvantages All costs of the financial Easy conciliation with the - Distribution of indirect accounting are allocated to balance costs: causality link hard the products. Costs = direct to establish - Easiest method to costs (variable and fixed), implement - The costs of inefficiency shared costs, overhead are included - Reflects the real costs and "sunk costs" are situation of the company distributed among the products. - Very widely used Distribution criterion: e.g. the volumes 13
6. Financing of the USO until 31 December 2010 (2) Activity base costing principles Cost objects: Resources Activities Drivers products, customers Costs first activity based cost distribution second activity based cost distribution to driver based cost objects 14
6. Financing of the USO until 31 December 2010 (3) The costing model of bpost - some figures Cost objects Resources Activities Drivers: Drivers: FTE’s time weighted standards volumes About 2000 About About Responsibility 500 1000 centres with activities products +/- 20 kinds of cost 15 15
6. Financing of the USO until 31 December 2010 (4) Current method: ABC methodology: basic principles The ABC method is an internal accounting method that starts from the principle that any cost within a company is caused by a specific activity. Direct investment Direct Overhead Overhead Overhead costs labour costs costs costs costs centre 1 centre 2 centre N Production Production Production costs costs costs Centre Centre 1 Centre 2 N Products 16 16
6. Financing of the USO until 31 December 2010 (4) Calculation of the burden to be compensated according to the FDC FDC Cost FDC Cost FDC Cost FDC Cost FDC Cost Product US P 1 Product US P 1 Product US P 2 Universal Service Cost Product US P 2 Product US P N Cost of reserved and non-reserved FDC Cost Product US P N ... ... reserved or not (R and U) universal services (R and U) Profit Revenues Revenues Revenues Profit Product US P N Product US P N Total revenue of US Profit Product Product US P 1 Product US P 2 Product US P 1 US P 2 ... ... Total of US revenues (US = Universal Service) Loss Profit Loss Loss Loss Profit Product Product US P 2 Product US Product US P 1 Product US P 1 Product US P 2 US P N Result of US ... ... Result of US P N Total losses Burden resulting from universal Total losses of the Extra burden (R and U) of the Universal universal service service obligations (R and U) Service + + Profits of Profits from Compensation by profitable reserved profitable Compensation by the reserved sector the reserved sector (R) services reserved (R) services Burden to be compensated (if < 0) Unfair burden Burden to be compensated (if < 0) by Unfair burden remaining to be by the compensation fund remaining to be covered covered the 17 compensation fund? 17
Recommend
More recommend
