ANACOM approves set of measures on the provision of the universal postal service

Within the scope of its assigned powers and responsibilities, ANACOM has approved final decisions on a range of matters preparing for provision of the universal postal service following expiry of the current contract between the Portuguese State and CTT.

The approved decisions refer to:

  • criteria to apply to universal postal service pricing;
  • quality of service parameters and performance targets associated with provision of the universal postal service;
  • distribution of postal items to premises other than the addressee’s home;
  • concept of unfair financial burden for the purpose of compensating the net cost of providing the universal postal service;
  • methodology for calculating the net cost of the universal postal service;
  • information to be provided by the universal postal service provider(s) to users.

These decisions were all previously submitted to public consultation. In general, ANACOM has maintained the obligations provided for in the draft decisions.

In terms of pricing, ANACOM has amended the rule currently in force (based on a maximum price variation), moving to an assessment of pricing based on the principles of affordability for all users and of cost orientation. In this context, a price proposal will initially be considered by ANACOM as being in accordance with the principle of cost orientation of prices where, as a result of the proposed variation, the margin earned on the basket of services covered by the universal postal service is reduced or, at the limit, unchanged. ANACOM will, however, continue to pay special attention to proposals resulting in significant average annual price variations. In particular, ANACOM will examine proposals resulting in price increases exceeding 10% over one year or exceeding 15% over two consecutive years, taking into account the likely impact on affordability.

To ensure that the service remains affordable for residential users and for small and medium-sized enterprises, the maximum annual variation in the price of national non-priority correspondence weighing up to 20 grams is maintained - this category of postage is the most important in terms of traffic sent by the occasional user segment (mostly residential users and small and medium-sized enterprises). In general, a variation in the prices of this provision may not exceed the rate of inflation estimated for each year, plus 1 percentage point.

In terms of quality of service, ANACOM maintains the set of quality of service indicators (QSI) which have been in use since 2019, as well as the associated performance targets. As such, the stringency of quality of service requirements remains in line with the QSI applicable to the current universal service provider. On the other hand, the amount of compensation due to users as a result of any non-compliance with the QSI performance targets will increase. Failure to meet performance targets will trigger application of a deduction from the average annual price of the basket of services (correspondence, parcels and newspapers and periodicals) provided by the universal service provider in question, up to a maximum value of 3% (currently up to 1%).

Increasing the deduction for non-compliance with performance targets (from 1% to 3%) makes this compensation mechanism more effective as a deterrent against non-compliance with the performance targets, notwithstanding the application of other sanctions under the prevailing legal framework.

ANACOM also imposes the obligation to provide a set of items for blind and partially sighted people free of charge.

Furthermore, ANACOM has considered that it is justified in defining the cases and conditions under which providers may distribute items covered by the universal postal service to premises other than the addressee's home. This is only permitted when: the recipient requests delivery of postal items to another location; households do not provide an individual letter box for the delivery of postal items or the letter box is not in good condition; dwellings are located in areas without toponymy, or are located in areas which already have toponymy but where the competent authorities have not yet completed placement/identification; postal items cannot be placed in the addressee’s letter box due to the item’s dimensions; delivery conditions cause a risk to the health and safety of distributing personnel or to the security of the postal items being carried; there is difficulty in accessing the addressee's home. According to the draft decision, the universal service providers should start to distribute to addressee homes, or re-establish home distribution when this is no longer occurring. Among the changes implemented in relation to the draft decision, universal service providers are now obliged to inform local authorities (municipal/parish council) where there are areas without toponymy, or where, even if toponymy already exists, the competent authorities have not yet proceeded with its placement/identification on the respective streets and buildings.

ANACOM has also defined the concept of unfair financial burden for the purpose of compensating the net cost of providing the universal postal service and has likewise defined the methodology for calculating the net cost of the universal postal service. In this context, ANACOM considers that there is no unfair financial burden for the universal service provider where the provider has undertaken to remunerate the State for provision of the service. There is an unfair financial burden for the respective universal service provider(s) in other situations when at least one of the following conditions is met:

a) the value of the universal service provider's market share, calculated in terms of revenue derived from the contracted universal service(s) is less than 80%; or

b) the net costs of universal service provision calculated for the universal service contracted is equal to or greater than 3% of the revenues which the universal service provider derives from the contracted universal service.

As regards the information to be provided by the universal postal service provider(s) to users, ANACOM intends to make this information more easily accessible to users, especially as regards general conditions of access and postal establishments. The information that the provider(s) will be required to disclose includes, for example, the location of postal establishments and other access points to the retail network, such as post boxes, and other information of relevance for their use, such as opening/operating hours and the times of last collection; information on prices and discounts; on the quality of service provided; and on complaints and requests for information received, with information on complaints detailed by subject and cited service.

Contributions were received from about four dozen entities and citizens, including from local authorities and local authority associations, postal service providers, civil society organisations and entities of the public administration.

Finally, it is recalled that ANACOM launched a joint public consultation on 26 November 2019 with the Government on provision of the universal postal service subsequent to expiry of the current concession. The report on this public consultation was approved on 9 March 2020 and published on 13 March 2020, setting out ANACOM's positions and recommendations on issues within the powers of the Government, as well as information on the matters that would be pursued by ANACOM. The decisions now approved are forwarded to the Government for consideration in the procedure to designate a future universal service provider.