An Post, Ireland’s universal postal service provider, has been subject to a 5-year price cap since 2014 for certain universal postal services. The cap allowed An Post to make price increases to reduce its losses on the universal postal service in the first year, returning to profitability by the end of the period. The Commission for Communications Regulation (ComReg), the Irish postal regulator, asked Frontier Economics to assess the performance of An Post under the price cap up to the end of 2015.
Frontier’s assessment, published today, found that An Post has not met its efficiency targets to date. This has contributed to An Post’s losses in relation to the universal postal services. An Post also chose not to price to the maximum allowed under the price cap in the first and second years, which continues to result in lost revenue.
An Post has now requested ComReg to review its 2014 price cap decision on the basis of material and unforeseen changes in circumstances. Irish legislation provides for such a mid-term review in order to protect the interest of Irish postal users.
Frontier regularly advises on postal pricing and price regulation across Europe.
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