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Country sheet: France 283
Country sheet: France
1.1 Summary
Market characteristics
(i) Very high domestic volumes (France has Europe’s second largest postal market, after
Germany);
(ii) An average population density, however, approximately 25% of the population live in rural
areas which are often sparsely populated and include hills and mountainous territory;
(iii) A reserved area covering all services related to items of domestic correspondence, direct mail
and incoming cross-border correspondence up to 50g and 2.5 times the basic tariff;
(iv) A broad universal service, including items of correspondence, newspapers, periodicals,
catalogues, printed matter weighing 2kg or less and parcels;
(v) A well-developed upstream market where various mail houses and mail consolidators are
active.
Regulatory developments
• Although in 1999 France implemented legislation setting out the limits of the
reserved area according to Directive 97/67/EC, a thorough transposition of Directives
97/67/EC and 2002/39/EC was only completed in 2005. Law no. 2005-516 on
regulation of postal activities reduced the reserved area to 50 grams and assigned
responsibility for regulating the postal sector in France to the regulator for
telecommunications (ART), which was renamed ARCEP. Full liberalisation is not
expected to take place before uniform European liberalisation in 2011. The law
defines four types of ‘means necessary to competitors’ (access rights).
Market developments
• In the cross-border mail, parcels and express segments, the degree of competition is
significant and several large (international) operators compete with La Poste. An
interesting trend is the increase in pick-up points for parcels, for example in tobacco
outlets. Within the unaddressed segment the concentration ratio is very high, with
Adrexo (merged with Kicible in 2006) and Mediapost (La Poste) competing with
each other. The upstream market for mail preparation is of considerable importance
in France, and this part of the value chain has been open to competition for many
years. Various mail houses and mail consolidators are active (around 250), although a
number of these consolidators are in the hands of La Poste and the others have
limited market power as they operate under subcontractor status. The markets for
direct mail preparation and administrative mail preparation are not very concentrated.
• In the addressed mail delivery segment, the results of competition are somewhat
limited and less than what was expected some years ago. With the introduction of
Main developments in the postal sector (2006-2008) 284
Adrexo Mail in 2006 a second delivery network seemed to have been generated.
However, Adrexo announced in February 2008 that it will withdraw from the
addressed mail market. One of the main reasons for this was the postponement of the
date of full liberalisation of the European postal market. Other reasons mentioned
were: barriers for alternative postal operators in Europe and the rules that could be
applied to alternative operators (e.g. financing of the universal service). With the
closing down of Adrexo’s addressed mail network the only alternative end-to-end
delivery network for addressed mail (besides La Poste) will disappear. The estimated
market share of La Poste in the delivery of addressed advertising mail and domestic
items of correspondence is close to 98-99%. It is not likely that this (semi-monopoly)
situation will change fundamentally before 2011.
• An interesting aspect is the international dimension of La Poste, especially in the
(international) parcel and express segments. La Poste owns (or participates in) more
than 200 subsidiaries in France, Europe and the non-European world. Strong brands
are GeoPost (Chronopost and DPD) and Sofipost.
Discussion point
• The development of competition in France in the addressed mail segment is lagging
behind. Since the closing down of Adrexo’s addressed mail network the only party
that could challenge La Poste on a national level (at least in theory) disappeared.
According to ECORYS, this withdrawal is a clear example of the effect of regulatory
uncertainty, and related to the implementation of European decision making. Adrexo
expected full market opening in December 2008, but after the postponement of full
market opening to 31 December 2010, Adrexo stopped (or paused) their investments
and cancelled their attempt to create a dedicated network for addressed mail. In
general, the postponement of European liberalisation seems to have caused a pause in
the initiatives and investments by alternative postal operators to become active in the
delivery of addressed letter mail.
Summary information on market developments:
Postal market
segment/aspect
Competition (market shares) Main competitors / remarks
Express Competitive TNT Express, Exapaq, GLS France
Parcel (main
players)
NPO (n.a.) Alveol, Adrexo/Distrihome, Kiala, Mondial-Relay, Sogep
Unaddressed NPO/Mediapost (50%) Adrexo (50%)
Cross-border mail NPO (80-85%) De Post/La Poste, DHL, DPWN, IMX, Royal Mail, Spring,
Swiss Post, Let France Routage
Addressed mail
(market share
CPOs)*
1-2% Adrexo stopped piloting a (local) dedicated addressed
mail network in 2008; in the upstream market La Poste
has a market share of only 10%
Population density
(inhabitants/km2)
111
Total addressed
mail market (items)
16.5 billion items (2006)
Addressed mail 270 (2006)
Country sheet: France 285
Postal market
segment/aspect
Competition (market shares) Main competitors / remarks
volume per capita
Status of NPO La Poste is a state enterprise Since 1991, La Poste’s legal status has been that of an
‘exploitant autonome de droit public’ – an autonomous
business firm which serves the general interest
Main divisions of
NPO
Mail, express, parcels, retail
outlets and financial services
Note: *The market share of CPOs refers to the combined market share of CPOs in domestic addressed mail
delivery, excluding magazines, periodicals and newspaper delivery. All figures refer to 2007, unless stated
otherwise. N.a. is not available.
Summary information on the implementation of the Postal Directive:
Aspect Implementation and remarks
Universal service and
its financing
The USO includes national and cross-border services for mail (including items of
correspondence, newspapers, periodicals, catalogues, printed matter) weighing 2kg or
less, parcels weighing up to 20kg, recorded delivery items and declared value items.
The USO is financed by the reserved area. It is possible to put a compensation fund in
place.
Reserved area From 1 January 2006 the reserved area covers all services related to items of domestic
correspondence and incoming cross-border correspondence up to 50g and 2.5 times
the basic tariff. Books, catalogues, newspapers and periodicals are explicitly excluded
from the reserved area. Direct (addressed) mail is seen as comprising domestic
correspondence and therefore (< 50g) part of the reserved area.
Licensing and network
access
Postal operators that provide non-reserved postal services relating to items of
correspondence (including cross-border items) should hold an authorisation, unless
their activity is limited to domestic correspondence and does not include delivery.
Some general requirements are linked to the authorisation. Authorisation holders have
access rights to (a part of) the La Poste network and to certain information kept by La
Poste. The CPCE (law) distinguishes four types of ‘means necessary to competitors’.
Tariff principles and
transparency of
accounts
The tariffs within the reserved area need approval by ARCEP, while for the services
that fall under the universal service but not under the reserved area, La Poste should
notify ARCEP before the changes will take effect. In June 2006, ARCEP introduced a
price cap system regarding the universal service provided by La Poste. In the period
2006-2008, tariffs in relation to the universal service could not rise more than a
determined yearly average of 2.1%.
Quality of service The QoS objectives are fixed by the Ministry, annually by a ministerial order. Up to
now, the (indicative) QoS levels to be attained have been defined in the contract
signed between La Poste and the state (e.g. ‘Le contrat de plan 2003-2007’). A new
contract will soon be signed between La Poste and the state specifying the ‘mission de
service public’ of La Poste for the period 2008-2012. In 2007, La Poste did not meet all
of the quality criteria; 82.5% of the mail was delivered the next day, whereas the
threshold was 85%, and the delivery of packages within two days was achieved in
85.8% of cases instead of 90%. For cross-border deliveries, performance was above
target (95.5%, with an 85% threshold).
National regulatory Since the end of 2005, ARCEP has been the independent postal regulator. Its activities
Main developments in the postal sector (2006-2008) 286
Aspect Implementation and remarks
authority (NRA) are mainly related to licensing, monitoring the universal service and accounting/price
control of the USP. Nine employees work full-time on postal affairs, and they receive
some support (2 full-time equivalents (FTEs)) from other services. Their regulatory
powers are broad, including for example regarding the collection of statistical
information.
1.2 General information
France is a large country with an average population density (111 inhabitants/km2
compared with the European average of 113 inhabitants/km2). However, around 25% of
the population live in rural areas that are often sparsely inhabited and include hills and
mountainous territory.1 Only 7% of the 61 million inhabitants live in the five largest
cities, of which Paris is the largest with 2.1 million inhabitants (see Table 0.1). If we take
into account Paris and its suburbs (Ile-de-France), the number of inhabitants is 11.4
million (circa 18% of the total population).2
Table 0.1 General country information (2007)
France
Population (in millions) 61.3*
Size of country (1,000 km2) 551.5*
Population density (inhabitants/km2) 111.2*
Degree of urbanisation 76.7**
Number (and %) of inhabitants in 5 largest cities 4.2 million (6.9%)***
Sources: *UPU (2006); **UN (2005); ***World Gazetteer (2008 estimate).
1.3 Regulatory developments
1.3.1 Postal law and regulation
The law of 25 June 1999 on spatial planning and sustainable development transposed the
main obligations of Directive 97/67/EC of 15 December 1997 defining the universal
service with its principles and the guarantees given to users, as well as the reserved area
for the universal service provider, and designating La Poste as the postal universal service
provider in France. A thorough transposition of Directives 97/67/EC and 2002/39/EC was
only completed in 2005.
Law no. 2005-516 on the regulation of postal activities (Postal Act 2005) reduced the
reserved area to 50 grams (in accordance with the Directives) and assigned the
1 ECORYS 2005a.
2 INSEE (Institut National de la Statistique et des Etudes Economiques), facts and figures No 112, January 2006 (figures
based on 2005).
Country sheet: France 287
responsibility for regulating the postal sector in France to the regulator for
telecommunications (ART), which was renamed ARCEP (Autorité de Régulation des
Communications Electroniques et des Postes). ARCEP was granted full authority for
regulating the postal sector, e.g. granting of licences, tariff control, supervision of the
universal service provision and its sustainability, access rules and settlement of disputes
between operators.
The French Post and Electronic Communications Code (CPCE) was amended by the
Postal Act 2005 and also by some secondary legislation. For example, the scope and
nature of the universal service were defined in the Decree of 5 January 2007 on the USP,
and Decree no. 2006-507 of 3 May 2006 detailed the licensing procedures and settlement
of disputes (see Table 0.2).
Table 0.2 Postal law and regulation
Postal law and
regulation
Date of introduction Date of latest
amendment
Remarks
Post and Electronic
Communications Code
27 February 1952 20 May 2005 (Law no.
2005-516 on regulation
of postal activities)
Decree no. 2007-310
on the national postal
fund for geographical
equalisation
5 March 2007
Order enacted in
application of article
R.2-1 of the CPCE and
setting out the terms
and conditions for
posting and delivery of
postal shipments
7 February 2007 Applies to all postal operators
Decree no. 2007-29 on
the universal postal
service and the rights
and obligations of La
Poste and amending
the CPCE
5 January 2007 Defines the universal service and
the rights and obligations of La
Poste regarding its postal public
service missions
Decree no. 2006-1239
on La Poste’s
contribution
to regional planning
11 October 2006 Defines La Poste’s contribution
to regional planning
Decree no. 2006-1020
concerning postal
service operators’
liability
11 August 2006 Applies to all postal service
operators
Order of 3 May 2006
implementing article
R.1-2-6 of the CPCE
3 May 2006 Applies to the licensees
Main developments in the postal sector (2006-2008) 288
Postal law and
regulation
Date of introduction Date of latest
amendment
Remarks
relating to the
obligations of licensed
postal service
providers
Decree no. 2006-507
on regulation of postal
activities, amending
the CPCE
3 May 2006 Applies to the licensees
Law no. 2005-516 on
regulation of postal
activities
20 May 2005 Reduces the reserved area to 50
grams. Introduction of an
independent regulator (ARCEP,
previously ART)
Law no. 90-568
concerning
organisation of the
postal public service in
France and France
Telecom
2 July 1990 20 May 2005 Applies to the operating rules for
La Poste. Amended by Law no.
2005-216 of 20 May 2005
Source: ECORYS desk research, ECORYS questionnaire – ARCEP, La Poste and Ministry of Economics,
Industry and Employment.
1.3.2 Universal service obligation
La Poste was officially designated as the universal service provider in France in 1999;
this was also registered in article L.2 of the CPCE. Regarding the universal postal service,
the CPCE states that La Poste shall provide all users across the whole of the national
territory with permanent postal services that meet established quality standards and that
these services shall be offered at affordable prices for all users.
Scope of the universal service
The universal postal service includes national and cross-border services for mail weighing
2 kilograms or less, parcels weighing up to 20 kilograms, recorded delivery items and
declared value items. The particular features of the universal service are laid down in
Decree 2007-29 of 5 January 2007, which states that the universal postal service shall
cover provision of domestic and cross-border postal services for the following (article
R.1):
• items of correspondence weighing up to 2kg, including:
o ordinary individual and bulk mail, where individual domestic mail shall include
both priority and non-priority items;
o registered items with or without acknowledgement of receipt.
• newspapers and periodicals weighing up to 2kg;
• catalogues and other printed matter weighing up to 2kg;
Country sheet: France 289
• postal packages weighing up to 20kg, sent singly to the public as ordinary or
registered items and excluding postal services provided to businesses under contracts
covering multiple items;
• insured items of a value below the limit determined by a decree of the Minister for
Postal Services;
• redirection of the postal items (under the USO);
• literature for blind people in the form of ordinary or registered items.
Books, catalogues, newspapers and periodicals are not seen as items of correspondence.
Direct mail however forms part of items of correspondence (article R.1).
The postal items covered by the universal service shall, except in special circumstances,
be duly approved by the national regulator and be collected and delivered on every
working day (so six times, Saturday is seen as a working day) throughout metropolitan
France (articles R.1-1 and R.1-1-1).
In accordance with article R.1-1-10 and taking into account the categories above, La
Poste as the universal service provider defined a catalogue of universal service products.
La Poste shall simultaneously forward to the Minister for Postal Services and ARCEP
any proposals for substantive changes (other than tariff changes) to the catalogue
affecting services relating to individual mail covered by the universal service. ARCEP
shall have one month from receipt of the document to issue its opinion and forward it to
the Minister for Postal Services. If no objection has been notified by the Minister for
Postal Services within two months of the document’s receipt, the changes shall be
deemed to be approved. La Poste shall also inform the Minister for Postal Services and
ARCEP of any changes to the catalogue affecting bulk mail services.3
Scope of the network
The universal service shall be provided permanently to all users throughout metropolitan
France. Article R.1-1 determines that the services covered by the universal service shall
be within reach of users. Post-office branches providing public access to services covered
by the universal service, must be so located that at least 99% of the national population
and at least 95% of the population of each département is less than10 kilometres from a
post-office branch and all communes with over 10,000 inhabitants have at least one post-
office branch per 20,000 inhabitants.
Compensation fund
Considering USO financing, article L.2-2 of the CPCE provides for the possibility of
putting a compensation fund in place at the request of the universal service provider.
Regarding the costs of providing the universal service (and related to that, the sources of
financing it), ARCEP reported that the costs of the universal service have not been
appraised (or communicated by La Poste) so far.4
3 ECORYS questionnaire – Ministry.
4 ECORYS questionnaire – ARCEP and La Poste.
Main developments in the postal sector (2006-2008) 290
Provision for blind and partially sighted people
The universal service also contains provisions for blind and partially sighted people.
Article R.1 states that literature for blind people – in the form of ordinary or registered
items – is free of charge when subject to the conditions laid down by an order of the
Minister for Postal Services.
1.3.3 Reserved area
From 1 January 2006 the reserved area comprises all services covering items of domestic
correspondence and incoming cross-border correspondence, including those sent by
priority mail, weighing less than 50 grams and whose price is under 2.5 times the basic
tariff (article L.2 CPCE). Books, catalogues, newspapers and periodicals are explicitly
excluded from the reserved area. Direct (addressed) mail is seen as domestic
correspondence and therefore (partially) within the scope of the reserved area (article L.1
CPCE).
For segments like parcels, express, mail preparation and consolidation no regulatory
framework has ever been implemented.5
Table 0.3 shows the scope of the reserved area.
Table 0.3 Liberalisation of postal services and the reserved area (2008)
Postal product Within reserved area
(yes, no, partially or unclear)
Remarks
Bulk mail and consolidation
B2B non-bulk mail*
Individual item mail
Partially Items of domestic correspondence up
to 50g and 2.5 times the public tariff
are still within the reserved area.
Books, catalogues, newspapers and
periodicals are not items of
correspondence. Direct mail forms
part of items of correspondence.
Consolidation (upstream) is not part
of the reserved area.
Items of correspondence
Cross-border mail Partially Outgoing cross-border mail is
liberalised. Inbound cross-border mail
up to 50g and 2.5 times the public
tariff is still within the reserved area.
Unaddressed mail No
Parcel mail No
Express mail No
Source: ECORYS desk research.
Note: *La Poste refers to this category as ‘individual items sent by firms’ (to businesses or consumers).
5 Gallet-Ryback, Moreno, Nadal and Toledano (2008).
Country sheet: France 291
As far as we know, no plans have been made to liberalise any further before the European
liberalisation date of 31 December 2010.
1.3.4 NRA
Since 2005, ARCEP (Autorité de Régulation des Communications Electroniques et des
Postes) has been the independent postal regulator. As mentioned above, ARCEP was
granted full authority for regulating the postal sector.
The main ARCEP activities are threefold (ARCEP website):
• Issuing licences and implementing the rights and obligations attached to them. In the
CPCE a licensing system is introduced for domestic mail delivery and cross-border
correspondence (article L.5-1);
• Monitoring La Poste’s universal service mission and in particular its performance in
terms of quality of service (articles L.5-2, 4° and R.1-1-8). These quality
requirements will be issued by the minister in charge of the postal sector, after giving
the universal service provider an opportunity to make its submissions and obtaining
the opinions of ARCEP and the Commission for the Public Service of Postal and
Electronic Communications;
• Accounting and price control of the universal service provider (article L.5-2). In order
to implement the principles of separate, transparent accounts, and in particular to
guarantee the universal service’s financing conditions, ARCEP shall define the cost-
accounting principles, establish the accounting system specifications and ensure
compliance by the universal service provider with the cost-accounting obligations
laid down in the decree on universal service (article R.1-1-15). In 2007, ARCEP
published a decision (no. 07-443) on the specification of the format and content of the
regulatory accounts. After a public consultation process, ARCEP adopted a decision
concerning the accounting rules on 12 February 2008.6
Further, ARCEP has the power to impose penalties on the universal service provider or
other operators authorised under article L.3 if they violate the obligations regarding the
universal service (article L.5-3). Table 1.4 summarises the NRA’s regulatory powers.
Regarding ARCEP’s involvement in issues relating to competition, there is the possibility
that ARCEP will inform the national competition authority (Conseil de la concurrence)
about forbidden cartel agreements and abuse of dominant position. ARCEP has already
asked for the opinion of the French competition council on La Poste’s rebate policy
(Conseil de la concurrence, avis no. 07-A-17).7 Furthermore, it is possible that the
national competition authority will ask ARCEP for more information on its view on
competition issues in the postal sector (article L.5-8).
6 ECORYS questionnaire – ARCEP, La Poste.
7 ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 292
Capacity of the NRA
At the end of 2006, ARCEP’s total staff capacity was 163 people.8 Nine employees work
full-time on postal affairs. In addition, the postal regulation department receives legal and
economic support from other services (approximately equivalent to 2 FTEs).9
Complaints and redress procedures
Another of ARCEP’s tasks is the settlement of disputes between postal actors (postal
operators, consolidators or clients) regarding contracts. These range from disputes
concerning the (normal) conditions of the universal service (article L.5-4) to those
relating to (third-party) access to certain facilities of the incumbent (article L.5-5).10
To date, ARCEP has only settled one dispute between La Poste and a consolidator. The
consolidator challenged the regulator’s decision before the Court of Appeal of Paris,
which confirmed the absence of discriminatory practice by La Poste (decision no. 2007-
0635).11
In recent years, ARCEP has taken steps to establish contacts with customers’ associations
and, when applicable, they will be consulted.12
Table 0.4 Regulatory powers of the NRA
Powers Yes/no/unclear Remarks
Require data from USP – can the NRA
require the USP to disclose existing
records?
Yes La Poste shall supply any information requested
by ARCEP for the purpose of carrying out its
duties and supervising the universal postal
service (article R.1-1-16, decree on universal
service)
Require accounting system – can the
NRA require the USP to maintain
regulatory accounts in the manner
determined by the NRA?
Yes The accountancy obligations are set out in
secondary legislation.13
ARCEP shall define the cost-accounting
principles, establish the accounting system
specifications, and ensure compliance with the
cost-accounting obligations (article L.5-2)
Require new data studies – can the NRA
require the USP to collect new data,
possibly at substantial expense to the
USP?
Yes La Poste shall supply any information requested
by ARCEP for the purpose of carrying out its
duties and supervising the universal postal
service (article R.1-1-16, decree on universal
service)
Cancel unlawful rates – authority to
cancel unlawful tariffs
No ARCEP approves tariffs within the reserved
area and may give reasoned public opinion on
tariffs within the universal service open to
competition (article L.5-2). ARCEP may impose
8 ARCEP (2007a).
9 ECORYS questionnaire – ARCEP.
10 ECORYS questionnaire – La Poste.
11 ECORYS questionnaire – La Poste; see also Gallet-Ryback, Moreno, Nadal and Toledano (2008), p. 21.
12 ECORYS questionnaire – ARCEP.
13 ECORYS questionnaire – La Poste.
Country sheet: France 293
Powers Yes/no/unclear Remarks
penalties (article L.5-3)
Levy fines – impose fines in case of
unlawful activity
Yes ARCEP has the power to impose penalties
under certain circumstances (article L.5-3)
Seek judicial order – to seek judicial
enforcement of regulatory orders
Uncertain
Set new rates for USP – authority to set
lawful tariffs even if the USP does not
propose them
No
Require downstream access – authority
to require the USP to provide
downstream access even if it does not
wish to do so
Uncertain/no According to ARCEP – very uncertain.
La Poste – no, in accordance with article L.2-1
La Poste can conclude access to network
contracts based on special tariffs (negotiated
access) with large customers, consolidators and
competitors. These tariffs must not be
discriminatory.
Require data from non-USPs – authority
to require information from postal
operators other than the USP
Yes Licence holders shall provide ARCEP annually
with statistical information on the use, coverage
area and access arrangements of their services
(article R.1-2-7)
Source: ECORYS desk research, questionnaire.
1.3.5 Licences
Postal operators which provide non-reserved postal services relating to items of
correspondence (including cross-border items) should hold an authorisation, unless their
activity is limited to domestic correspondence and does not include delivery (article L.3).
Authorisations are valid for 10 years.
Authorisation holders should meet the following general requirements (Decree no. 2006-
507):
• guaranteeing safety of users, staff and service provider’s equipment;
• guaranteeing confidentiality of items of correspondence and the integrity of their
contents;
• providing users with access to a free, simple and transparent complaints procedure;
• protecting personal data and privacy;
• ensuring that the technical requirements for service provision are environmentally
friendly;
• identifying the postal items they deliver with a distinctive sign.
Further, Decree no. 2006-507 demands that licence holders shall provide ARCEP with
annual statistical information on the use, coverage area and access arrangements of their
services, including data on the nature and volume of the various mail services covered by
their authorised activity.
Main developments in the postal sector (2006-2008) 294
The request for an authorisation needs to be drawn up in French and needs to contain all
manner of information: (i) information about the requestor, (ii) technical data, (iii)
commercial data, (iv) information on technical capacity, and (v) information on financial
capacity.
The CPCE states that ARCEP can refuse an authorisation only through a considered
decision on grounds based on the applicant’s financial, economic or technical inability to
comply on a long-term basis with the obligations attached to its postal activity (article
L.5-1). Getting an authorisation is free of charge.
Table 0.5 Entry regulations
Instrument Services allowed under
the licence
Conditions for obtaining
the licence
Number of licences
approved (2007)
Authorisation Services relating to items
of correspondence
(including cross-border
items) that are not part of
the reserved area
Requirements regarding
(i) safety, (ii)
confidentiality, (iii)
transparent access, (iv)
privacy, and (v) the
environment
20
Source: ECORYS desk research, ARCEP website.
ARCEP has granted 20 licenses. 12 licenses (including La Poste) are granted to postal
operators for domestic mail delivery (letters > 50g) and nine (including La Poste) to
operators for outgoing cross-border mail.14
These domestic operators focus on local
markets (e.g. a city) and only Adrexo focused on the whole country.
1.3.6 Access
Upstream activities have been liberalised in France for a long time.15
Large customers,
mailing houses and mail consolidators can deliver their mail at different levels of La
Poste sorting centres (at national level, department level (ca. 100), and postal code level
(ca. 40,000)) at discounted prices. The terms of delivery are negotiated and non-
discriminatory (article L.2-1).16
Authorisation holders have access rights to (a part of) the La Poste network and to certain
information kept by La Poste (based on article L.3-1). The CPCE distinguishes four types
of ‘means necessary to competitors’:
• Delivery service to PO boxes installed in post offices for customers opting for this
particular type of delivery;
• The postcode directory, supplemented by the link between these codes and the
geographical information about streets and addresses. It is important for a reference
14
Gallet-Ryback, Moreno, Nadal and Toledano (2008). 15
Gallet-Ryback, Moreno, Nadal and Toledano (2008) have described the historical background of mail preparation in
France. 16
ECORYS (2005a).
Country sheet: France 295
work like the postcode directory, or any other geographical reference work used for
addressing mail, to be transparent;
• Information collected by La Poste about addressees’ changes of address. In the past,
this information was of course notified to the operator holding the postal monopoly.
Its retransmission to new postal market entrants, in accordance with economic
procedures yet to be specified, is an obvious prerequisite for balanced competition;
• A redirection service in the event of change of address. This type of service cannot be
taken on by an authorised operator when the addressee’s new address is outside the
geographical area covered by that operator. In such cases, La Poste will perform this
service on behalf of the authorised operator.
Access to the delivery network and PO boxes is mandatory. Terms and conditions should
be negotiated between access seeker and La Poste. If a dispute arises, ARCEP has to
settle the dispute and may set the terms and conditions.17
ARCEP mentions that access to letterboxes has raised several legal and technical issues
(building security, law on private property). However, the CPCE stipulates that the USP
and authorisation holders are entitled to access letterboxes in order to deliver postal items.
Article L.5-10 demands that the USP and authorisation holders have access on the same
terms.
ARCEP has conducted a public consultation, resulting in a compromise solution by
which all licensees will be given access to the access codes (managed by La Poste) in
order to reach letterboxes.18
Table 0.6 Network access
Upstream/downstream Form of access Regulated?
(yes, no, unclear)
Upstream Access to street letter boxes No
Access to outward sorting centres
Downstream Access to inward sorting centres
Access to delivery offices
No. Large customers, consolidators
and competitors have access to La
Poste network based on special
tariffs (negotiated access). These
tariffs must not be discriminatory.19
Access to PO boxes Yes
Source: ECORYS (2005a), ECORYS questionnaire – La Poste.
1.3.7 Price regulation
ARCEP determines (based on La Poste’s proposal or own research) ‘the particular
features of the multi-annual tariff framework for universal service provision’, and can
17
ECORYS – private contact with ARCEP. 18
ECORYS questionnaire – La Poste. 19
ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 296
distinguish between individual and bulk mail (article L.5-2 CPCE). Relating to this,
ARCEP introduced in June 2006 a price cap system regarding the universal service
provided by La Poste. In the period 2006-2008 tariffs in relation to the universal service
could not rise more than the yearly average of 2.1% (ARCEP, decision no. 06-0576, La
Poste press release 13 June 2006).
The tariffs within the reserved area need approval by ARCEP. For the services that fall
under the universal service but not under the reserved area, La Poste should notify
ARCEP before the changes will take effect. In such cases, ARCEP may give a reasoned
public opinion (article L.5-2 CPCE).
The Postal Act 2005 allows La Poste to negotiate with bulk mailers, consolidators of mail
from different customers and licence holders about specific contracts that deviate from
the standard terms and conditions of universal service provision, including special tariffs
for business services. However, these tariffs and conditions have to be objective and non-
discriminatory and should take into account the avoided costs (article L.2-1 CPCE).
1.3.8 Quality of service
As mentioned above, one of ARCEP’s tasks is to monitor La Poste’s quality performance
relating to the universal service obligation. The objectives of service quality are fixed by
the Ministry, annually by a ministerial order. The contract signed between La Poste and
the state (e.g. ‘Le contrat de plan 2003-2007’) also defines the level of quality of services
to be reached (see Table 0.7).20
According to article L.5-2 of the CPCE, ARCEP
commissions an independent body to carry out a study on quality of service on an annual
basis and publishes the results.21
A new contract will soon be signed between La Poste and the state specifying the
‘mission de service public’ of La Poste for the period 2008-2012.22
ARCEP has undertaken some steps to increase the transparency of the universal service
by involving various stakeholders.23
In particular, postal service users were consulted
about their needs and expectations regarding information on the quality of the universal
postal service. On the basis of this consultation, ARCEP and La Poste have examined the
possibility of carrying out reliable measurement when it appears to be useful and
publishing the information needed most by postal service users. La Poste carries out the
measurements and publishes the results. ARCEP makes sure that the measurements are
reliable and that the information made public fits the needs of postal users.
In 2005 and 2006, information concerning the transit time of the main universal service
postal products was published (domestic single piece priority mail, parcels, cross-border
mail). On the basis of the consultation results, the (categories of) information measured
20
ECORYS questionnaire – Ministry of Economy, Industry and Employment. 21
ECORYS questionnaire – La Poste. 22
ECORYS questionaire – Ministry of Economy, Industry and Employment. 23
ECORYS questionnaire – ARCEP.
Country sheet: France 297
and made public will increase year on year. For instance, the number of collection points
regarding latest collection time and the satisfaction rate for the handling of complaints
were published for the first time this year. In 2009 (based on 2008 data), this should result
in the publication of information on: (i) parcels – substantial delays, (ii) transit time of
registered mail, and (iii) registered mail – substantial delays. ARCEP and La Poste are
also working on the possibility of publishing information on the transit time of delivery
advices.
Table 1.7 shows that La Poste has not met all of the quality criteria. In 2007, 82.5% of the
mail was delivered the next day, while the threshold was 85%. The delivery of packages
within two days was met in 85.8% of cases instead of 90%. For cross-border deliveries,
performance was above target. La Poste indicated that these results must be analysed
taking into account the specificities of French territory (low density and many districts to
deliver to across the whole territory: 36,000).24
Table 0.7 Quality of service by USP (2006 and 2007)
Standard Threshold Performance of USP Remarks
Delivery D+1 (prior)
Delivery D+2 (prior)
85%
95%
2006: 81.2%
2007: 82.5%
2006: 96.2%
2007: 96.3%
In 2002, only 67% of the
priority mail was delivered
the next day
% of lost mail n.a. 0.09%* Rough estimation of
ARCEP/TNS Sofres
(2006). The % of lost mail
for received items (by
households) is 0.03%,
and 0.09% for sent items.
Delivery of cross-border
mail D+3 (inbound)
Delivery of cross-border
mail D+3 (outbound)
Delivery of cross-border
mail D+5 (inbound)
Delivery of cross-border
mail D+5 (outbound)
85%
85%
97%
2006: 95.9%
2007: 95.5%
2006: 94%
2007: 94.8%
2006: 99.3%
2007: 99.1%
98.7%
98.8%
Delivery D+2 of packages
Delivery D+3 of packages
Delivery D+4 of packages
90%
95%
-
2006: 84.1%
2007: 85.8%
2006: 95.5%
2007: 96%
2006: 98.5%
24
ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 298
Standard Threshold Performance of USP Remarks
2007: 98.7%
Source: La Poste (2008b).
*La Poste (ECORYS questionnaire) indicated that the percentage of lost mail and the total ‘loss rate’ are based
on the perceptions of users (panel of 1,022 clients). This estimation cannot be compared with the results of the
statistical analysis of the quality performance of the USP.
Note: n.a. is not available.
Random check on quality
Regarding the percentage of lost mail, 78% of French households (and 69% of
companies) declared that during the 12 months before the random check they received all
the letters or parcels they expected, or received them without any damage.25
Some 9% of
households (and 18% of companies) declared that they had not received an expected letter
(for parcels the figure was 4% for both households and companies). ARCEP estimates the
total ‘loss rate’ for letters not received as three in 10,000 (0.03%) for households and one
in 10,000 for companies (0.01%).
The ‘loss rate’ for items sent by households was higher: probably nine in 10,000 (0.09%)
(and one in 10,000 for companies). Some 6% of households (and 17% of companies)
declared that a sent letter was never received. For parcels this figure was 2% for
households and 5% for companies. Overall, 89% of households (and 775 of the
companies) did not experience the loss of any sent items.26
Monitoring compliance with CEN standards
Measuring the quality of the universal service, the number of complaints and how they
have been handled calls for reliable methods and supervision of their correct application.
The transit time of single piece priority mail and the number of complaints are measured
according to the specifications of EN 13850 and EN 14012 respectively. The other
quality of service indicators will have to be made more and more auditable. The standard
EN 13850 provides for an end-to-end measurement system encompassing all postal
operator responsibilities, starting from the point where the item is collected or accepted
up to its final delivery. Quality of service is evaluated using the findings of a survey
based on test letters exchanged between panellists.27
In 2006, ARCEP commissioned an audit of the service quality for ordinary letters from
the consultancy firm of Ernst and Young. The purpose of this audit was to check whether
La Poste’s measurement complies with the standard EN 13850, which was made
mandatory under European and national regulations. The auditor identified the need for a
number of improvements to ensure better compliance with EN 13850. ARCEP and La
Poste are working on implementing these recommendations.28
25
ARCEP (2006d). 26
ARCEP (2006d). 27
ECORYS questionnaire – ARCEP. 28
ECORYS questionnaire – ARCEP.
Country sheet: France 299
1.4 The mail market
ARCEP has reported that in 2006 the volume of the French postal market was circa 39.3
billion items (2005 figure: 39.6 billion items), with a turnover of circa € 15.2 billion
(2005 figure: € 15 billion). Thus total volume decreased in 2006 while revenues
increased. Most market segments lost volume of turnover, except for registered letters
and parcels and domestic and cross-border parcel delivery. The market for unaddressed
items did not change in volume, but generated 4.5% more revenue.29
Mail volumes are expected to decline further, for example because of rationalisation
(such as less frequent mailings, putting two bills in one envelope, ensuring that close to
35 grams of mail is put in an envelope for that weight category) and substitution
(electronic billing in the B2B area, internet for consumer mail).30
1.4.1 Mail market overall
In 2006, the overall volume of the postal market was approximately 39.3 billion items,
representing a value of € 15.2 billion (see unnumbered table below). Unaddressed (direct)
mail was the largest submarket in volume (47%), but the value was only 4.3% of the total
turnover, which confirms that these are low value-added activities. Turnover in 2006
increased by 4.4% compared with 2005. ARCEP (2007a) noted that this rise in volume
was related to increased prices because of the introduction of an environmental tax
(January 2005) and the application of a new (minimum salary) agreement (June 2005).
Table 0.8 Overview of the postal market in 2005 and 2006 (in million items and million €)
Volume (2005) Volume (2006) Turnover (2005) Turnover (2006)
Items of
correspondence
16,806 16,540 8,470 8,435
Registered letters and
parcels
276 279 1,302 1,382
Parcels
o/w ordinary parcels
o/w express light
parcels
638
o/w 358
o/w 280
665
o/w 365
o/w 300
3,464
o/w 1,464
o/w 2,000
3,698
o/w 1,598
o/w 2,100
Paid press delivery 2,789 2,710 492 484
Total addressed items
delivered in France
20,509 20,194 13,728 13,999
Items of
correspondence
(export)
523 480 500 422
Ordinary parcels
(export)
7 8 74 85
Press (export) 28 27 31 29
29
ARCEP (2007b). 30
ECORYS (2005a).
Main developments in the postal sector (2006-2008) 300
Volume (2005) Volume (2006) Turnover (2005) Turnover (2006)
Total addressed items
exported
558 516 605 536
Unaddressed
advertising
18,570 18,568 630 658
Total 39,637 39,278 14,963 15,193
Source: ARCEP (2007b).
Note: imports are included in the overall figure for items of correspondence, registered items, parcels, press
items and unaddressed advertising; paid press delivery does not include revenue from non-postal delivery of
press.
The second largest submarket – items of correspondence (individual item mail, bulk mail
and B2B non-bulk mail) – generated € 8.4 million in 2006 (55% of the total) and
represented 16.5 billion items (42%). In 2006, the reserved area (up to 50g) encompassed
only 35% of the volume of the total market, but nearly 84% (in volume, 73% in terms of
revenue) of the market for items of correspondence. In 2005, the corresponding figures
were 39% of the total market and 92% of the market for items of correspondence (in 2005
the reserve area was still up to 100g).31
The (domestic) market for delivery of parcels is growing (up 2% in 2006 compared with
2005), while the export of parcels (8 million items) increased by 18% compared with
2005. Turnover increased by 9.1% for domestic parcel delivery and 14.6% for cross-
border delivery. The volumes and turnover of the express market stayed nearly the same.
Regarding cross-border mail (items of correspondence), the volume decreased to 480
million items (-8.1%) and turnover fell by € 422 million (-15.5%).
Table 0.9 Size of the mail market in turnover (million €)
Postal product 2005 2006
Bulk mail and consolidation n.a. n.a.
B2B non-bulk mail n.a. n.a.
Individual item mail n.a. n.a.
Items of correspondence 8,470 8,435
Cross-border mail 500 422
Unaddressed mail 630 658
Parcel mail < 30 kg 1,464 1,598
Express mail 2,000* 2,100*
Total 14,963 15,193
Source: ARCEP (2007b); *estimated by the Ministry of Transport.
Note: Not shown in the table: registered letters and parcels (2005: 1,302; 2006: 1,382), domestic press items
(2005: 492; 2006: 484) and exported press (2005: 31; 2006: 29). Parcel mail: excluding export (2005: 74; 2006:
85). Cross-border mail: only export. Import traffic could not be isolated: € 251 million in 2006, including items of
correspondence, registered mail, press items and ordinary parcels. Express mail: this estimation by the Ministry
of Transport does not include the activities of all operators. It includes domestic and outgoing transborder items.
Note: n.a. is not available.
31
ARCEP (2007b).
Country sheet: France 301
Table 0.10 Size of the mail market in physical terms (million items)
Postal product 2005 2006
Bulk mail and consolidation 9,873 9,571
B2B non-bulk mail* 3,673 3,824
Individual item mail 3,260 3,144
Items of correspondence 16,806 16,540
Cross-border mail** 523 480
Unaddressed mail 18,570 18,568
Parcel mail 358 365
Express mail*** 280 300
Total 39,637 39,278
Source: ARCEP (2007b); *items of correspondence sent by firms; **items of correspondence (export);
***estimated by the Ministry of Transport.
Note: Not shown in the table: registered letters and parcels (2005: 276; 2006: 279), domestic press items (2005:
2,789; 2006: 2,710) and exported press (2005: 28; 2006: 27). Parcel mail: export excluded (2005: 7; 2006: 8).
Cross-border mail: only export. Import traffic could not be isolated: 390 million items in 2006, including items of
correspondence, registered mail, press items and ordinary parcels. Express mail: this estimation by the Ministry
of Transport does not include the activities of all operators. It includes domestic and outgoing transborder items.
Table 0.10 shows that in 2006, 58% (2005: 59%) of all ‘items of correspondence’
(individual item mail, bulk mail and B2B non-bulk mail) could be categorised as bulk
mail (> 400 items). Although the total volume decreased by 3.1% compared with 2005,
the segment increased by 3.2% between 2004 and 2005.32
An important trend is the
decreasing share of unprepared bulk mail. While 50% of the volume was prepared bulk
mail in 2004 (2005: 53%), this figure rose to 60% in 2006.
The volume of addressed direct mail (or addressed advertising) increased by 0.3% in
2006 compared with 2005, encompassing 4.9 billion items and contributing € 1.6 billion
(2005: € 1.7 billion). In 2006, 51% of the bulk mail was direct mail.
In 2006, the postal market amounted to circa 1% of total GDP (at current market
prices).33
Customer survey
The random check by ARCEP and TNS-Sofres (2006) showed that 43% of households
received fewer than five letters per week. Only 15% received 10 or more letters per week.
In terms of frequency, 57% of households received letters every day, while 26% received
letters one or two times a week.
Some 57% of households sent fewer than five letters a month, while only 19% sent more
than 10 letters a month. Frequency of sending was rather low: only 6% sent items every
day, 36% sent one or two items a week, and the majority sent letters fewer than two or
three times a month.34
32
ARCEP (2007b). 33
French GDP (at current market prices) in 2006 was circa €1,659 billion (Eurostat yearbook), while the total turnover of the
postal market was € 15,193 million. 34
Two or three times a month: 32%; once a month: 11%; once every two or three months: 6%; less often: 8%.
Main developments in the postal sector (2006-2008) 302
Ordinary letters were received by 94% of companies every day, while 68% sent ordinary
letters every day. In terms of volumes, ARCEP reported that 37% of companies received
fewer than 20 letters every day, while 315 received more than 50 letters; 24% of
companies sent more than 50 ordinary letters per week, while the majority (52%) sent
fewer than 20 letters per week.
1.4.2 B vs C
ARCEP has reported on the physical postal streams in the market for ‘items of
correspondence’ (individual item mail and bulk mail).35
The largest stream (64%) is the
B2C stream, with more than 10 billion items, while the volume of the B2B and B2C
streams are more or less the same size (17%). Correspondence between individual
consumers constituted only 3%.
Table 0.11 Postal streams in the market for addressed mail in turnover (million €)
Postal stream 2006
B2B n.a.
B2C n.a.
C2B n.a.
C2C n.a.
8,435
Source: ARCEP (2007b), p.15.
Note: n.a. is not available.
Table 0.12 Postal streams in the market for addressed mail in physical terms (million items)
Postal stream 2006
B2B 2,866 (17%)
B2C 10,530 (64%)
C2B 2,646 (16%)
C2C 496 (3%)
16,540
Source: ARCEP (2007b), p.15, based on ‘items of correspondence’
Note: La Poste indicated that: (i) the objective of the percentages given by ARCEP is to present a rough
overview of the market, and (ii) furthermore, these percentages relate to La Poste’s activity and not to the whole
market. The results are not in line with market structure, according to La Poste.36
1.4.3 Market opening
Most postal services are de jure liberalised – for example, export, domestic parcels,
domestic express items, press items for subscribers and unaddressed mail. Only items of
35
ARCEP (2007b). La Poste indicated that: (i) the objective of the percentages given by ARCEP is to present a rough
overview of the market, and (ii) furthermore, these data relate to La Poste’s activity and not to the whole market. The results
of the table are not in line with market structure. 36
ECORYS questionnaire – La Poste.
Country sheet: France 303
correspondence (including inward cross-border mail) up to 50 gram (until 2005, 100g) are
part of the reserved area. La Poste faces competition in most of the de jure liberalised
markets, especially those for outgoing cross-border mail, parcel mail and express mail.
In 2006, revenue from the reserved area was € 6.2 billion (13.8 billion items), while in
2005 (reserved area still up to 100g) it was € 7.0 billion (15.4 billion items). In terms of
total volume of the postal market, the reserved area comprised 41% in 2006 (2005: 47%),
and 35% of total turnover (2005: 39%). Focusing on ‘items of correspondence’
(individual item mail, bulk mail and B2B non-bulk mail), the reserved area comprised
83.5% of market volumes and 73% of market revenues. In 2005 (reserved area up to
100g), the volume was 92%.37
ARCEP estimated that in the liberalised domestic market (correspondence above 50g),
the market share of La Poste is de facto above 98%.38
La Poste reported that in 2006, 70% of the La Poste Group’s activities were open to
competition. In 2005, this figure was 64.5% according to La Poste.39
Gallet-Ryback, Moreno, Nadal and Toledano state that in practise market opening only
affects advertising mail and (in less extent) business transaction mail. They observe that
in the segment for addressed (advertising) mail only delivery in urban areas is a serious
option. They estimate the (theoretically) contestable market at 25% of the total market for
letter mail delivery (€ 500-700 million per year).40
1.4.4 Cross-border mail
Inbound cross-border mail up to 50 gram and 2.5 times the public tariff is still within the
reserved area. In 2006, the volume of the total cross-border postal market (inbound and
outbound items of correspondence, registered mail, parcel and press) was circa 906
million items, representing € 787 million. That was – according to ARCEP – circa 8% of
the world market.41
The export traffic comprised 516 million items in 2006 (2005: 558 million), generating €
536 million (2005: 605 million), a decrease of 7.5% in volume and 11.4% in turnover.
This decrease was mainly caused by lower letter volumes (-8.2% and -15.6% in
turnover), while the volume of outgoing press declined by 3.6%. The volume and
turnover of outgoing parcels increased by more than 14% compared with 2005.
ARCEP has reported that in 2006, ABC-postal streams (with France as country B)
comprised 16% of the volume of the outbound cross-border postal market and 11% of the
turnover. In 2005, the volume share was only 6%.42
37
ARCEP (2007b). 38
ECORYS questionnaire – ARCEP. 39
La Poste, press release 12 April 2007. 40
Gallet-Ryback, Moreno, Nadal and Toledano (2008). 41
ARCEP (2007b). 42
ARCEP (2007b).
Main developments in the postal sector (2006-2008) 304
The outgoing cross-border market is liberalised since the end of the 1990s43
and rather
competitive, with the main players all (related to) large international players: Deutsche
Post, Swiss Post, G3/Spring (joint venture between TNT, Royal Mail and Singapore
Post), Belgian Post and Royal Mail. IMX France is the only operator not related to a
foreign incumbent. Gallet-Ryback, Moreno, Nadal and Toledano estimate the market
share of La Poste at 80-85%.44
1.4.5 Impact of innovation
Facing the rationalisation of large clients’ purchasing behaviour and the development of
e-communications, La Poste is investing € 3.4 billion in a vast industrial programme
(CQC). Modernisation of the production tools will be completed by new services, a real
social project for all the mail postal workers (new jobs, training) and new organisations
for deliverers. La Poste’s mail activity and its subsidiaries have built innovative offers
such as electronic registered mail and mail solutions that mix sending electronic mail with
‘re-materialisation’ before delivery.45
Substitution
The precise impact on each mail sub-segment is not known (see Table 0.13). The
development of e-communications is significant for bills, transactional information and
advertising. For example, the ‘carte vitale’ (medical reimbursement electronic forms)
represented a loss of 945 million mail items in 2006. In 2007, 7.4 million people used e-
declarations for their revenue declaration to the tax authorities. This figure was 30%
higher than the preceding year.46
Table 0.13 Impact of electronic substitution
Postal product % change in total market volume (avg/year)
Bulk mail and consolidation n.a.
B2B non-bulk mail n.a.
Individual item mail n.a.
Items of correspondence n.a.
Cross-border mail n.a.
Unaddressed mail n.a.
Parcel mail n.a.
Express mail n.a.
Total n.a.
Source: n.a.
Note: n.a. is not available.
43
Gallet-Ryback, Moreno, Nadal and Toledano (2008). 44
Gallet-Ryback, Moreno, Nadal and Toledano (2008). 45
ECORYS questionnaire – La Poste. 46
ECORYS questionnaire – La Poste.
Country sheet: France 305
1.5 Market structure and competition
1.5.1 National postal operator/universal service provider
Since 1991, La Poste’s legal status has been that of an ‘exploitant autonome de droit
public’. This means that it operates as an autonomous business firm, while remaining
within the public sector and serving the general interest (Act no. 598-568). La Poste is a
100% state-owned enterprise in charge of services of general interest such as the
universal postal service, the transportation of press, the rural network presence and the
banking basic service.47
‘Le contrat de plan 2003-2007’ (the contract between La Poste and the French
government defining the main objectives of the public enterprise during that period)
stated that La Poste’s activity was divided into four business lines: mail, parcels and
express, financial services and network services.48
A new contract will soon be signed
between La Poste and the state specifying the ‘mission de service public’ of La Poste for
the period 2008-2012.49
Since 2003, the handling of mail has been in an ongoing process of reorganisation (‘cap
qualité courrier’), the aim of which is to rationalise the production process and reduce
average costs per mail item processed.50
In recent years, La Poste has expanded its activities in other (EU) countries. It has a large
number of business alliances and majority as well as minority positions in various
subsidiaries, among others in the USA and UK. La Poste has established a European
network for parcel and express delivery, particularly via GeoPost.
Most of the markets where La Poste is active are opened to competition. In 2006, roughly
70% of La Poste’s income was generated in competitive markets.51
After losses in 2001 and 2002, La Poste is back on track and reported profits for the
period 2003-2006. In 2006, its net profit was € 789 million – a 41.7% increase over the
2005 profit. For 2007, the net profit target was € 850 million.
La Poste’s postal network
In 2006, La Poste expanded its national network to more than 17,000 outlets. Its customer
relations project resulted in the renovation of 1,100 post offices and the opening of 1,499
public and private partner outlets. Another 1,000 post offices were to be renovated in
2007.
47
ECORYS questionnaire – La Poste. 48
ECORYS questionnaire – La Poste. 49
ECORYS questionnaire – Ministry. 50
ECORYS questionnaire – La Poste. 51
ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 306
Table 0.14 Postal network of the national postal operator
La Poste 2007
Number of post offices 12,522 (1 January 2007)
Number of postal agencies 4,523
Number of street post boxes 140,500 (2005)
Robin and Zarifian (Eurofound, 2007) reported that reduction of the number of post
offices is being discussed intensively: ‘Currently, La Poste has officially committed itself
to keeping the 17,000 contact points, mainly as a result of political pressure and at the
request of the state. However, in fact, the number of ‘real’ post offices with staff paid for
by La Poste is gradually decreasing. The aim is to drop to about 9,500 post offices and
annexes. Other contact points are gradually being created, either by “postal relays” in
cafés or supermarkets, or by postal agencies, which sell La Poste’s products and services,
but whose staff is paid for by local authorities’.52
La Poste stresses firmly that these assumptions made by Robin and Zarifian are not based
on any economic or legal analysis. La Poste points out that the number of post offices
(17, 000) is not the result of political pressure, but is defined by law and secondary
legislation. Further, La Poste stresses that concerning the number of post offices, it has no
such objective of reducing (to 9,500) the number of ‘real’ post offices.53
Breakdown per segment
Postal activities (mail, express, parcels) in 2006 generated nearly € 15.5 billion (Table
1.15), which was more than 75% of the total turnover of the La Poste Group. Postal bank
activities yielded another € 5 billion.
Table 0.15 Division of the national postal operator’s turnover per market segment
Postal product 2006
(in million €)
%
Bulk mail and consolidation n.a.
B2B non-bulk mail n.a.
Individual item mail 2,113 14%
Items of correspondence 9,540 62%
Cross-border activities 705 5%
Unaddressed mail 339 (Mediapost) 2%
Parcel mail 1,238 8%
Express mail 2,932 19%
Total postal activities 15,486
Source: La Poste (2007).
Note: The percentages are taken from the turnover of postal activities. The total turnover of the La Poste Group
was € 20,069. N.a. is not available. Items of correspondence includes direct mail.
52
Eurofound (2007). 53
ECORYS questionnaire – La Poste.
Country sheet: France 307
Within its postal activities, La Poste distinguishes between mail (bulk, individual, cross-
border, unaddressed), parcels and express. Parcels and express yielded respectively € 1.2
and € 2.9 billion (mainly GeoPost) in 2006, together making up 27% of total postal
revenues.
Regarding revenues and profit from letter mail and more specifically from the reserved
area, ARCEP reported that in volume terms, 83% of the market for items of
correspondence in 2006 was part of the reserved area (2005: 92%). In 2006, the turnover
of services within the reserved area was € 6.2 billion, while the turnover of La Poste’s
mail activities (excluding press and services) was € 10.2 billion, resulting in a 61% share
of services within the reserved area. In 2005, this share was 68% (€ 7.0 billion out of €
10.3 billion).54
Vertical and horizontal integration
The La Poste Group is active in four main areas: mail, parcel/express, La Poste retail
outlets and financial services (La Banque Postale). La Banque Postale (Postal Bank) is a
100% subsidiary of the La Poste Group and together with La Poste uses the network of
more than 17,000 outlets (post offices and post agencies).
In France, Europe and the non-European world, La Poste owns (or participates in) more
than 200 subsidiaries, mainly in the express delivery sector and (to a lesser extent) the
mail sector (USA, Great Britain) (see overview in Table 1.16).55
Table 0.16 Overview of alliances and partnerships of the national postal operator
La Poste Mail Express Logistics
Austria DPD Austria
Nahte Quehenberger
Belgium Chronopost International
Belgium
DPD
GeoPost Benelux
Jet Worldwide Belgique
DPD
Bulgaria GeoPost Bulgaria
Czech Republic DPD CZ DPD
Denmark Chronopost International Denmark
Jet Worldwide
Germany GeoPost
Chronopost International Germany
DPD (various subsidiaries)
Jet Worldwide
Tat Express
Armadillo
GeoPost
DPD (various
subsidiaries)
Denkhaus Versand
Logistik
Tat Express
Greece Interattica Grèce
Hungary DPD Hungary
54
ARCEP (2007b). 55
ECORYS questionnaire – La Poste; annual reports 2005-2007.
Main developments in the postal sector (2006-2008) 308
La Poste Mail Express Logistics
Ireland GeoPost
Interlink
GeoPost
Interlink
Italy Chronopost International
Tat Express
Latvia Baltic Logistic System
Lithuania Baltic Logistic System
Luxembourg DPD SARL DPD SARL
Netherlands Insa BV
(upstream)
Sofipost BV
Chronopost International Nederland
GeoPost
DPD Nederland
DPD Nederland
Poland Masterlink ACP Air Cargo Poland
Masterlink
Portugal Chronopost International Portugal
Jet Worldwide Portugal
Slovakia DPD DPD
Slovenia DPD Slovenia
Spain GeoPost
Seur (several subsidiaries)
Menexpres
ILSA
STU
Zium Mensajeros
Tat Express
Chronopost Expresse Espana
Sweden GeoPost Nordic and Eastern Europe
UK IBC UK
GeoPost (various subsidiaries)
UK Letter
DPD UK
Interlink Express
Parceline
Mail Plus
Interlink Express Parcels
GeoPost
Parceline
DPD
Source: ECORYS (2005b); La Poste (2007).
The La Poste Group is present in the all-value chain of mail in France. In the field of
document management (paper and electronic), it offers a complete set of services from
consulting to outsourcing of the whole document process. La Poste owns (or participates
in) several actors, such as: Orsid, Maileva, Aspheria (mailing houses), Certinomis and
Seres (electronic services).56
All the mail subsidiaries are grouped together in the holding company Sofipost.57
56
ECORYS questionnaire – La Poste. 57
ECORYS questionnaire – La Poste.
Country sheet: France 309
1.5.2 Competitor postal operators
The main competitor of La Poste (and its subsidiary Mediapost58
) is Adrexo, which was
originally mainly active in unaddressed mail delivery and direct mail. Adrexo competes
with La Poste in the B2C parcel market, the unaddressed mail market and until February
2008 in the addressed mail market (bulk direct mail).59
Adrexo is part of the SPIR
Communication Group and delivers its own products, but also collects volume from other
sources. In February 2008, Adrexo announced the shutdown of its addressed mail
network. As well as La Poste and Adrexo, several local companies are active in this
market segment. Regarding outgoing international mail, several foreign companies
(mainly incumbents) are active in the French market.
Parties like Stamper’s (Fox), Athus/Solgeco and Let France Services are all small local
niche players. Their business plan focuses on business mailers, professionals, SMEs and
banks. Gallet-Ryback, Moreno, Nadal and Toledano observe that the delivery of letter
mail above 50g in fact is a complement to their other local activities and can not be seen
as separate autonomous services. These operators claim that it is currently not
profitable.60
Table 1.17 provides an overview of the main competitors.
Table 0.17 Overview of main competitors in the postal market (2007)
Postal
operator
Market Volume and
turnover of
No. of
employees
Service level
(no. of
deliveries per
week)
Coverage
Adrexo Letters > 50g
(direct mail),
unaddressed
mail, parcels
Unaddressed/
addressed:
8.2 billion/39
million items
€ 245 million/€
59 million
1,450
employees and
23,500
deliverers
At least three
times per
week in urban
areas, one to
two times per
week in rural
areas
National coverage,
delivery to around
25.1 million
letterboxes
Mediapost (La
Poste)
Unaddressed
10 billion items 13,500
employees,
12,000
deliverers
n.a. 98%
Althus/Solgeco Letters > 50g
(direct mail)
n.a. n.a. n.a. Regional
Stamper’s (Fox) Letters > 50g
(direct mail)
n.a. n.a. n.a. Regional
IMX France Outbound cross- n.a. 19 employees n.a. Not applicable
58
Mediapost, the largest operator of unaddressed mail in France, is 76% owned by La Poste. Mediapost delivers 10 billion
items a year, which was 54% of the total volume of 18.6 billion items in 2005 and 2006. The Mediapost network covers
nearly the whole of France (98%), with 13,500 employees and 12,000 deliverers. 59
ECORYS questionnaire – Adrexo. 60
See for more information: Gallet-Ryback, Moreno, Nadal and Toledano (2008), p. 14-16.
Main developments in the postal sector (2006-2008) 310
Postal
operator
Market Volume and
turnover of
No. of
employees
Service level
(no. of
deliveries per
week)
Coverage
border mail
Deutsche Post
AG
Outbound cross-
border mail
n.a. n.a. n.a. Not applicable
Swiss Post
International
France
Outbound cross-
border mail
n.a. n.a. n.a. Not applicable
La Poste Belge Outbound cross-
border mail
n.a. n.a. n.a. Not applicable
G3 Worldwide
(Spring)
Outbound cross-
border mail
n.a. n.a. n.a. Not applicable
DHL Global Mail Outbound cross-
border mail
n.a. n.a. n.a. Not applicable
Royal Mail
Group
Outbound cross-
border mail
n.a. n.a. n.a. Not applicable
Let France
Routage
Letters > 50g,
outbound cross-
border mail
n.a. n.a. n.a. Regional, cross-
border: not
applicable
Distrihome
(Adrexo)
Parcels > 500,000 items
a year
160 deliverers n.a. National coverage
Mondial Relay Parcels n.a. n.a. n.a. National coverage
Alvéol Parcels n.a. n.a. n.a. National coverage
Kiala Parcels n.a. n.a. n.a. National coverage
Sogep Parcels n.a. n.a. n.a. National coverage
Coliposte Parcels n.a. n.a. n.a. National coverage
TNT Express Express n.a. n.a. n.a. National coverage
Exapaq Express n.a. n.a. n.a. National coverage
GLS France Express n.a. n.a. n.a. National coverage
Chronopost
International
Express n.a. n.a. n.a. National coverage
Note: n.a. is not available.
In June 2006, ARCEP granted a (non-reserved) domestic mail delivery authorisation to
Adrexo, the only operator in addition to La Poste with a nationwide licence. In September
2006, Adrexo started its new postal service Adrexo Mail, using its new delivery network
for addressed correspondence. However, Adrexo announced in February 2008 that it will
shut down its addressed mail network.
Adrexo Mail delivered 39.1 million items in 2007 and realised a turnover of € 59.1, an
increase of nearly 260% compared with 2006 (€ 16.5 million). However, its operational
results for 2006 and 2007 were negative: € -1.4 million and € -16.4 million respectively.
Three reasons were noted for the decision to shut down the addressed mail network: (i)
the date of full liberalisation of the French postal market set at 1 January 2011, while the
Country sheet: France 311
European Commission called for completion of this liberalisation in January 2009; (ii)
barriers for alternative postal operators in Europe, especially in the German and Dutch
markets; and (iii) the rules that could be applied to alternative operators (financing of the
universal service, social costs inherent in the future collective bargaining agreement).
Some other postal operators have been granted a licence for (non-reserved) domestic mail
delivery at a local scale: Stamper’s (around Pau), Solgeco 26 (around Romans, Valence),
Alternative Post (around Lyon), JS Activ’ (around Perpignan), Press’Tissimo (around
Paris), ProCourrier (around Montpellier), Courier Service 03 (around Vichy), Courrier
Plus (around Lille, Roubaix, Tourcoing, Villeneuve d’Ascq), Let France Routage (around
Alsace and Lorraine) and Althus (Aix les Bains, Anneçy et Chambery).
Unaddressed mail
Two competitors are active in the unaddressed mail segment: Mediapost (a subsidiary of
La Poste) and Adrexo. In addition, 100 local operators are active in this market.
Traditionally, Adrexo delivered mainly unaddressed mail, catalogues, magazines, etc. and
is the main competitor of Mediapost, the La Poste subsidiary, with a market share of
approximately 45%.61
Adrexo focuses on last-mile delivery and has almost complete
territorial coverage, with delivery to around 25.1 million letterboxes in France in 2007. It
has around 1,450 employees and 23,500 deliverers, and delivers an annual volume of 8.2
billion items. In 2007, Adrexo realised a turnover of € 244.5 million (2006: € 229.5
million), with an operating profit of € 25 million (2006: € 23.8 million). Delivery takes
place at least three times per week in urban areas and one to two times per week in rural
areas. Customers bring their mail to one of Adrexo’s distribution centres, of which there
are currently 244.
In February 2006, Adrexo merged with Kicible, previously one of the largest competitors.
Kicible was mainly active in delivering unaddressed items published by publisher S3G,
but also delivered unaddressed mail for other publishers. Kicible was mainly active in the
south-east of France.
Cross-border mail
Regarding the transportation of (outgoing) cross-border mail, ARCEP has granted eight
licences. Besides La Poste, these licences were assigned to IMX France, Deutsche Post,
Swiss Post, Spring, De Post/La Poste, DHL, Royal Mail and Let France Routage. This
market is competitive.
Parcels and express
Coliposte, the parcel delivery line of La Poste, is one of the main players in the parcel
segment and carries out the universal service obligations for parcels up to 20kg. In the
B2C parcel market, La Poste, several mail order companies with their own delivery
network (such as Mondial Relay) and Adrexo (Distrihome) are active.
In addition, some operators (such as Alvéol, Kiala and Sogep) provide pick-up points.
Sogep is a subsidiary of mail order company La Redoute, and Kiala uses the network of
61
ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 312
Mondial Relay, the subsidiary of another mail order company, Les 3 Suisses. Together,
Sogep and Mondial Relay have more than 7,500 pick-up points throughout France.
The express mail market (letters and parcels up to 30kg) is judged to be competitive. In
addition to Chronopost International, a subsidiary of La Poste, the main competitors are
Exapaq, GLS, Fedex, UPS and TNT Express. Other, more international players like DHL
Express, UPS, Fedex and Ciblex are also part of this market. In 2005, Chronopost had
around a 25% market share.62
Since 2006, Chronopost, DHL Express and Ciblex have used the 3,000 tobacco outlets of
the Altadis Group as pick-up points (ARCEP, 2007b).
Press items
In France, La Poste is obliged to deliver newspapers to every home on a daily base, and
the state compensates La Poste for press distribution. The press delivery market is
specific to France, since La Poste tariffs are regulated (by the Ministry) and do not cover
the costs incurred by the operator. The consequences are financial prejudice for La Poste
(as the state compensation for this obligation does not cover the deficit linked to tariff
levels) and few competitors in this field.63
Apart from La Poste, ARCEP has estimated
that there are more than 250 local press delivery services.64
Upstream market
In the upstream market – and this is somewhat specific to France – various mail houses
and mail consolidators are active (around 250). The main activities are to collect, pre-sort
and consolidate various mail streams and hand over this mail to La Poste for final
delivery. This part of the value chain has been open to competition for many years. La
Poste assesses that this type of activity will continue to be important for the mail market
and for La Poste itself. A number of consolidators are in the hands of La Poste, and a
(larger) number are independent of the USP.
In 2006, the mail preparation market amounted to circa 5.7 billion items, in addition to
1.2 billion press items. Around 80% of the addressed direct mail was prepared (3.8 billion
items), and prepared business mail amounted to 1.9 billion items. In 2005, the total
volume was circa 5.2 billion items.65
ARCEP reported that the market for direct mail preparation is not very concentrated: the
five largest companies have a combined market share of 20% (in turnover). The market
for administrative mail preparation has about 15 main players.66
Recently, Deutsche Post
and Pitney Bowes took over the pre-sorting companies Koba and Asterion (the market
leader) respectively. La Poste is active in this market through three companies (Aspheria,
Orsid and Maileva).67
62
ECORYS (2005a). 63
ECORYS questionnaire – La Poste. 64
ARCEP (2007b). 65
ARCEP (2007b). 66
ARCEP (2007b). 67
ECORYS questionnaire – La Poste.
Country sheet: France 313
Gallet-Ryback, Moreno, Nadal and Toledano refer to a study by Basic (commissioned by
ARCEP) which distinguished five profiles of upstream market players:68
• Affiliates of incumbents: six parties have a market share of circa 17% of the total
revenue. These affiliates can be used by these incumbents as an entry into the French
market;
• Independents: this group represents 32% of the mail preparation market. These are
rather healthy companies with a good profitability and productivity, and therefore
interesting acquisition targets, according to Basic;
• SME mail preparation providers: these providers represent 23% of the total
preparation market and a substantial group (42%) of these providers experience
declining revenues. The growth rate of this profile is only 2% per year, mainly
realised by growth in their standard products;
• Subdivisions of integrated communication providers: these operators have developed
mail preparation activities as part of their overall portfolio and they represent 15% of
the total preparation market. Seven leading parties gain 90% of the revenues for this
profile group;
• Affiliates of large mailers: represent 7% of the total preparation market, but they
realise a growth rate of 7% per year (which is higher than the realised growth rate of
all the upstream market players). According Basic their activities were developed to
respond to the needs of the direct mail sector and the financial services.
1.5.3 Competition
Table 0.18 and Table 0.19 show the number of competitors and degree of competition
during 2005-2006. In this period the number of main competitors stayed more or less the
same, although Kicible merged with Adrexo (unaddressed mail segment) and Adrexo
started its addressed delivery service. La Poste was mainly facing competition within the
express/parcel sector, in the distribution of outbound international mail and in the
upstream (mail consolidation) market.
Table 0.18 Number of competitors and degree of competition (2005)
Postal product Market share USP Number of competitors Concentration
ratio C3
Bulk mail and consolidation n.a. 2 (La Poste; > 100g, Adrexo) +
many local delivery services
C5: 20% upstream
C3: 100%
downstream
B2B non-bulk mail n.a. 2 (La Poste; > 100g, Adrexo) + local
delivery services
C3: 100%
downstream
Individual item mail n.a. 1 (La Poste) + many local delivery
services
C3: 100%
downstream
Items of correspondence 99-100% C1: 99-100%
Cross-border mail n.a. 9 (La Poste, Belgian Post, DHL,
Deutsche Post, IMX, Royal Mail,
Spring, Swiss Post, Let France
n.a.
68
Gallet-Ryback, Moreno, Nadal and Toledano (2008) referring to Basic (2007).
Main developments in the postal sector (2006-2008) 314
Postal product Market share USP Number of competitors Concentration
ratio C3
Routage)
Unaddressed mail 50%* 3 (La Poste/Mediapost, Adrexo,
Kicible) + many local delivery
services
C3 close to 100%
Parcel mail n.a. > 6 (La Poste/Coliposte, Alveol,
Distrihome, Kiala, Mondial-Relay,
Sogep, etc.)
n.a.
Express mail n.a. > 4 (La Poste, Exapaq, GLS France,
TNT Express)
n.a.
Total
Source: ARCEP (2006c); ECORYS questionnaire – ARCEP, La Poste; *estimate by La Poste (ECORYS
questionnaire). N.a. is not available. Items of correspondence includes direct mail.
Table 0.19 Number of competitors and degree of competition (2006)
Postal product Market share USP Number of competitors Concentration
ratio C3
Bulk mail and consolidation n.a. 2 (La Poste; > 50g, Adrexo) C5: 20%
upstream
C3: 100%
downstream
B2B non-bulk mail n.a. 2 (La Poste; > 50g, Adrexo) + local
delivery services
C3: 100%
downstream
Individual item mail n.a. 2 (La Poste; > 50g, Adrexo) + 250
press delivery services
C3: 100%
downstream
Items of correspondence 98-99% C1: 98-99%
Cross-border mail n.a. 9 (La Poste, Belgian Post, DHL,
Deutsche Post, IMX, Royal Mail,
Spring, Swiss Post, Let France
Routage)
n.a.
Unaddressed mail 50%* 2 (La Poste/Mediapost, Adrexo) +
many locals
C2: close to
100%
Parcel mail n.a. > 6 (La Poste, Alveol, Distrihome,
Kiala, Mondial-Relay, Sogep, etc.)
n.a.
Express mail n.a. 4 (La Poste, Exapaq, GLS France,
TNT Express)
n.a.
Total
Source: ARCEP (2007b); ECORYS questionnaire – ARCEP, La Poste; *estimate by La Poste (ECORYS
questionnaire). N.a. is not available. Items of correspondence includes direct mail.
In the upstream mail consolidation market, estimated at € 1 billion, La Poste holds a
market share of around 10%. The market share of the ten largest consolidators is about
50%. The development of this market can notably be explained by the increase of
Country sheet: France 315
prepared bulk mail (from 50% to 60% of total bulk mail between 2004 and 2006).69
In the
(non-reserved) area of correspondence-item delivery only Adrexo (and some local
operators) competes with La Poste. Probably, La Poste’s market share in the delivery of
addressed advertising mail and domestic items of correspondence is close to 98%.
Considering press transportation, ARCEP estimates that in 2006 La Poste held
approximately 65% of the home delivery of press and magazines. 70
Adrexo stops piloting a dedicated addressed mail network
In February 2008 Adrexo, the main competitor of La Poste and its subsidiary Mediapost, announced to
stop piloting addressed mail delivery with a (local) dedicated addressed mail distribution network
(Adrexo Mail) and to focus again on unaddressed delivery.
Adrexo was established in the early 1970s as a distribution company specialised in free weekly press
and magazines around Aix-en-Provence. At first, only the magazines of SPIR were distributed. Later on,
the distribution of magazines of other publishers and unaddressed mail, catalogues and small parcels
were added to the product portfolio.71
In June 2006 ARCEP granted to Adrexo the first (and still only)
national authorisation for the postal distribution of items of correspondence outside the reserved area.
Adrexo had utilized its national delivery network for unaddressed mail to distribute addressed mail
(‘Combimail’) and has set up in the principal metropolitan areas a dedicated delivery network (‘Adrexo
Mail’). Their objective as to realise a coverage of 50% at the moment of full liberalisation in 2009. 72
In 2006 Adrexo Mail realised a turnover of € 16.5 million, while in 2007 this increased to a turnover of €
59.1 million and a volume of 39.1 million items. Their operational results for 2006 and 2007 were
negative, respectively € - 1.4 million and € - 16.4 million. Compared to a national volume for addressed
mail (items of correspondence) of circa 16.5 billion items (figure 2006) Adrexo had a market share of
0.2% in 2007.
Despite the increase in volume, Adrexo announced in February 2008 (a couple of weeks after the
decision to postpone the date of full liberalisation to 2011) that they will close down their addressed mail
network. Three reasons were mentioned for the decision to close down their addressed delivery
network, namely (i) the date of full liberalisation of the French postal market set at 1 January 2011, while
the European Commission called for completion of this liberalisation in January 2009, (ii) barriers for
alternative postal operators in Europe, especially on the German and Dutch markets, and (iii) the rules
that could be applied to alternative operators (financing of the universal service, social costs inherent in
the future collective bargaining agreement).
Gallet-Ryback, Moreno, Nadal and Toledano observe that in 2007 the ‘revenue resulting from its
dedicated network for addressed mail was essentially fuelled by trial runs by customers’.According to
them Adrexo has not been able to develop a profitable dedicated network for addressed mail delivery
with sufficient coverage an volumes to allow it to grow revenues and achieve economies of scale. 73
69
ECORYS questionnaire – La Poste, referring to ARCEP. 70
ECORYS questionnaire – La Poste, referring to ARCEP. 71
ECORYS (2005a). 72
Gallet-Ryback, Moreno, Nadal and Toledano (2008), literally. 73
Gallet-Ryback, Moreno, Nadal and Toledano (2008), literally.
Main developments in the postal sector (2006-2008) 316
In the field of unaddressed mail Adrexo is the main competitor of La Poste (Mediapost)
with a market share, in volume, of around 45% (2006).74
In 2006, 70% of La Poste income is generated in the field of opened market. In other
words, most of the markets where La Poste is active are competitive.75
1.5.4 Competition issues
Alleged abuse of dominant position
Since 1990, a case has been pending to determine if access conditions to La Poste’s
counter network for its subsidiary Chronopost (courier services) represent state aid.76
In
2007, the Court of First Instance rejected complaints from some international courier
companies (such as Deutsche Post, Fedex, DHL International) that La Poste (Chronopost)
unfairly subsidises its courier express operations. The court ruled that the original
decision of the Commission (‘this is a national competition dispute’) was correct.77
More recently, the French competition council (Conseil de la concurrence) analysed La
Poste’s commercial rebates to its large customers, and concluded that its rebate policy
cannot be considered as a predatory, discriminatory or exclusionary practice.78
Up to now, no strategic entry barriers to the French postal market have been identified by
any competition authority or judge.79
Access to mail boxes
Many buildings in France have electronic systems to control entry, and these often have
to be negotiated before reaching the inhabitants’ letterboxes. This means that postal
operators have to go through the control system before being able to distribute the mail.
La Poste has been working on these electronic systems for years, and even has a patent
for one of them (the VIGIK system).80
About 100,000 buildings, covering around 1
million households out of about 25 million households in France, are equipped with this
particular system. La Poste, as the universal service provider, has automatic access to the
system.81
For years, this was an unsolved barrier for domestic operators, because La Poste mail
deliverers can get in, while private operators cannot (see also ECORYS 2005a). However,
the Postal Act 2005 (article L.5-10) provides for entitlement for the USP and
authorisation holders to access letterboxes in order to deliver postal items. ARCEP noted
that this right of access to letterboxes has raised several legal and technical issues
74
ECORYS questionnaire – La Poste. 75
ECORYS questionnaire – La Poste. 76
ECORYS questionnaire – La Poste. The Weekly Mail and Express News (12 September 2007) reported that La Poste was
accused of granting its subsidiaries discounts on prices and differential service conditions which were not available to third
parties. 77
Weekly Mail and Express News (12 September 2007). 78
ECORYS questionnaire – La Poste; details: Conseil de la concurrence, opinion no. 07-A-17, 20 December 2007. 79
ECORYS questionnaire – La Poste. 80
ECORYS questionnaire – ARCEP. 81
ECORYS questionnaire – La Poste.
Country sheet: France 317
(building security, law on private property). If operators have the right of access to the
VIGIK system, the technical implementation door to door may be costly.82
ARCEP (2008a) has conducted a public consultation, resulting in a compromise solution
(published in February 2008) by which all licensees now have access to La Poste’s native
access code in order to reach letterboxes, in a simplified process. The long-term
governance of the system will be defined in such a way that La Poste and all other
operators will have access to secured buildings under the same conditions.83
VAT exemption
La Poste has VAT exemption for services provided under the universal service obligation.
For these services, La Poste has an advantage over competitor postal operators in
servicing VAT exempted customers. The advantage of the VAT exemption of La Poste
(unlike other European operators) is, however, lessened by the alternative tax based on
salaries (wages) that all VAT exempt businesses have to pay in France.84
La Poste
indicated that this, added to the fact that La Poste is partially unable to recover VAT on
its purchases and investments, creates a competitive disadvantage regarding its
competitors. La Poste’s cost structure is clearly handicapped by the VAT exemption,
according to La Poste.85
Gallet-Ryback, Moreno, Nadal and Toledano confirm this more or less and observe that
the VAT problem exists in France but is less critical then in other European countries. La
Poste is subject to a wage tax and most mailers can recover they VAT expenses they
incur with other licensed operators then La Poste. However, mailers of transaction mail
(e.g. banks and insurers) van not recover their VAT expenses.86
State aid
In February 2006, the European Commission started an investigation into the French
government’s unlimited guarantee for La Poste, which supposedly allows the state-run
postal service to borrow money on better terms than privately owned rivals.87
The
corporate legal form of La Poste, which is a state enterprise, would qualify the state as a
lender of last resort. This qualification is contested by the French state, on the basis that
no legal provision or case law indicates that the state could play the role of lender of last
resort for a public firm going bankrupt. On the contrary, La Poste does not benefit from
any guarantee or any better notation on the financial market that would be a consequence
of this hypothetic guarantee. In October 2006, the Commission invited the French state to
take necessary measures to suppress this supposedly unlimited guarantee, before 31
December 2008. The dispute is still pending, as the French government and La Poste are
contesting the decision.88
82
ECORYS questionnaire – La Poste. 83
ECORYS questionnaire – La Poste; ARCEP website. 84
ECORYS (2005a). 85
ECORYS questionnaire – La Poste. 86
Gallet-Ryback, Moreno, Nadal and Toledano (2008). 87
Postinsight.com, 23 October 2007. 88
ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 318
In October 2007, the Commission authorised the aid planned by France for reform of the
arrangements for financing the retirement pensions of civil servants working for La Poste.
In light of important commitments given by the French authorities, the Commission has
concluded that the social security contributions and tax paid by La Poste would now be
equivalent to what is borne by the postal operator’s competitors. Under a 1990 law, La
Poste was to finance in full the pensions paid by the state to its civil servants, by way of a
repayment to the state of the amounts paid out. This method of financing was a departure
from the ordinary arrangement. Unlike an ordinary employer in a pay-as-you-go system,
La Poste did not pay the levy that releases employers from any additional commitment
for retirement pensions, but it had to ensure that the pension scheme for its civil servants
was in balance.89
1.5.5 Results of competition
In the cross-border mail, parcels and express segments, the degree of competition is
significant and several large (international) operators compete with La Poste. An
interesting trend is the increase in pick-up points for parcels, for example in tobacco
outlets. Within the unaddressed segment the concentration ratio is very high, with Adrexo
(merged with Kicible in 2006) and Mediapost (La Poste) competing with each other.
The upstream market for mail preparation is of considerable importance in France, and
this part of the value chain has been open to competition for many years. Various mail
houses and mail consolidators are active (around 250), although a number of these
consolidators are in the hands of La Poste. Nevertheless, ARCEP reported that the market
for direct mail preparation is not very concentrated: the five largest companies have a
combined market share of 20% (in turnover). The market for administrative mail
preparation has about 15 main players.90
In the addressed mail delivery segment, the results of competition are rather limited and
even a little disappointing. With the introduction of Adrexo Mail in 2006, a second
delivery network seemed to have arisen in addition to La Poste. But with the closing
down of Adrexo Mail’s addressed mail network in 2008, the only alternative end-to-end
delivery network for addressed mail disappeared. La Poste’s market share in the delivery
of addressed advertising mail and domestic items of correspondence is probably close to
98 to 99%.
Related to this, ARCEP has concluded that competition is very limited, and is sceptical
whether competition will increase before full liberalisation of the market in 2011.91
Paul Champsaur, chairman of ARCEP, considered that in Europe ‘the move towards competition is
generally slow and painful’, but at the same time observed that ‘the gap is widening between the
situation in several other European countries and in the French market, which remains particularly
static’. Champsaur concluded that ‘in the delivery market, there are neither competitors nor competition’,
89
Postinsight.com, 10 October 2007. 90
ARCEP (2007b). 91
ARCEP (2008b).
Country sheet: France 319
and he was very sceptical about the near future: ‘under current market conditions, the French market
will reach 2011 without a gradual evolution from a quasi-monopoly situation to full market opening’.
Concerning the opportunities for alternative operators, he considered that ‘most probably, alternative
operators cannot find sufficient volumes to achieve economies of scale necessary to compete with the
USO provider’. He related this problem to the characteristics of the French market, more specifically the
lack of opportunity for competitors to gain access to a more substantial market (e.g. fully liberalised
advertising mail) during the transition to full market opening.
Also Gallet-Ryback, Moreno, Nadal and Toledano observe that competition in the
delivery of addressed mail is still marginal (market share of La Poste estimated at 99%)
and that (given the present market opening) delivery of addressed mail remains a
complementary activity for alternative operators and not a primary activity. Apart from
that they observe that the postponement of European liberalisation seems to have caused a
sudden pause in new licensing activity due to the fact that postal operators, now active in
parcels and express but interested to start delivery of addressed letter mail, have
postponed their plans and investments. 92
Taking into consideration the arguments that Adrexo Mail used to clarify its decision, it
must be concluded that a combination of European and national politics have shut the
door for competition in the addressed mail segment, at least in the medium term. After
all, (i) the postponement of European liberalisation until 2011 would have forced Adrexo
to wait for two more years before they could deliver the important 50g stream.
Apparently, Adrexo did not want to invest any further, considering (ii) that even in
(more) liberalised markets like Germany and the Netherlands, alternative competitors
face many barriers. Finally, (iii) Adrexo mentioned national regulation that could be
applied to alternative operators, for example the financing of the universal service. With
the closing down of Adrexo Mail’s addressed delivery network, it is unlikely that some
substantial level of competition in the addressed delivery segment can be expected to
develop before 2011. Further, the access problems to mail boxes may have limited the
development of competition.
1.6 Customer needs
La Poste has reported that a TNS Sofres study shows that 90% of the population, 87% of
mayors and 95% of shopkeepers are satisfied with the services La Poste offers.93
ARCEP commissioned TNS-Sofres to conduct a study into the expectations of postal
service customers. The study was completed in 2006. The aim was to target ARCEP
actions as part of ARCEP’s universal service mission, focusing on the expectations of
single piece mail users (households and small and medium-sized firms without any
bargaining power). The following table shows the summarised results of this study.
92
Gallet-Ryback, Moreno, Nadal and Toledano (2008), p.35 and 14. 93
La Poste (2008a), p.7.
Main developments in the postal sector (2006-2008) 320
Table 0.20 Expectations of postal service customers
Sending Receiving
Criterion Mail Parcels Registered Mail Parcels Registered
H ++ ++ - Convenience of deposit location
C + +
H Last collection time
C ++ - --
H ++ + Convenience of delivery in case of
absence C
H Convenience of delivery
C + +
H +++ - - Number of deliveries per week
C ++ + -
H Time of delivery
C ++
H +++ +++ ++ +++ ++ + Transit time
C +++ ++ ++ ++ ++ +
H ++ Guaranteed 100% reliability
C + -
H - - -- - -- -- Track and trace information
C + -- + -- -- --
Source: ECORYS questionnaire – ARCEP.
Note: Plus and minus signs are used to show the scale of expectation among service users for each criterion. H
stands for households and C for small and medium-sized firms.
ARCEP concluded that in general expectations were highly homogeneous among
households and businesses across the various services and between sending and
receiving. Transit time was one key criterion, while track and trace information was not
an important customer criterion, except among businesses sending registered mail. The
number of delivery days per week was an important criterion for receiving. Both
customer groups were fully in favour of delivery six days per week.94
1.7 Price performance
1.7.1 Tariffs
Table 0.21 shows the public tariffs for several postal products. All tariffs have increased
since 2005.
94
ECORYS questionnaire – ARCEP. La Poste (ECORYS questionnaire) mentioned that when analysing the study, it should
be taken into consideration that the price criterion was not included, to balance the results. In other words, asking for better
services always returns a positive response: the real issue is to balance the costs and advantages of high quality mail
delivery.
Country sheet: France 321
Table 0.21 Public tariffs (in €)
Postal product 2005 2006 2007
Letter post 1st class USP tariffs for domestic 20g letter of fastest
standard category
0.53 0.54 0.54
Letter post 2nd
class USP tariffs for domestic 20g letter of second
fastest standard category (if applicable)
0.48 0.49 0.49
Letter post cross-border USP tariffs for cross-border 20g letter of
fastest standard category
0.55 0.60 0.60
Parcels USP tariffs for a 5 kg domestic parcel
(lowest available public tariff)
8.10 10.00 10.00
Parcels cross-border USP public tariffs for a 5 kg cross-border
parcel (lowest available public tariff)
26.70 27.30 27.30
Registered item USP public tariffs for a registered item
(lowest available public tariff)
3.03 3.04 3.04
Insured item USP public tariffs for an insured item (lowest
available public tariff)
9.00 10.00 10.00
Bulk mail, 20g USP public tariffs for a mailing of 500 items 0.30* 0.30* 0.31*
Bulk mail, 100g USP public tariffs for a mailing of 500 items 0.62 0.62* 0.64
Bulk mail, 300g USP public tariffs for a mailing of 500 items 1.19 1.19* 1.23
Total
Source: ECORYS questionnaire – La Poste.
*According to ARCEP, the 20g bulk mail tariff during the three years 2005-2007 was € 0.35, € 0.35 and € 0.36
respectively; the100g bulk mail tariff € 0.62, € 0.62 and € 0.64 respectively; and the 300g bulk mail tariff € 1.19,
€ 1.19 and € 1.23 respectively.
Table 0.22 Public tariffs (in PPP)
Postal product 2005 2006 2007
Letter post 1st class 0.49 0.50 0.51
Letter post 2nd
class 0.44 0.45 0.46
Letter post cross-border 0.50 0.55 0.57
Parcels 7.43 9.21 9.43
Parcels cross-border 24.48 25.13 25.74
Registered item 2.78 2.80 2.87
Insured item 8.25 9.21 9.43
Bulk mail, 20g 0.28 0.28 0.29
Bulk mail, 100g 0.57 0.57 0.60
Bulk mail, 300g 1.09 1.10 1.16
Total
Source: conversion rate based on Eurostat data.
Evolution of public and special prices for main services
No information is available on the evolution of public and special prices for main
services.
Affordability
No information is available on affordability.
Main developments in the postal sector (2006-2008) 322
1.8 Employment aspects
1.8.1 Employment
Total employment
According to La Poste, ARCEP estimated that employment (number of people employed)
in the postal activity of the licensees was around 270,000 in 2006. Compared with 2005,
this was a substantial decrease (-4%). This estimate does not include employment in non-
authorised postal companies such as parcel, unaddressed mail and express delivery firms
or consolidators.95
Employment – alternative operators
In 2006, Mediapost employed 15,500 employees and 12,000 deliverers; 1,451 people
worked for Adrexo, as well as nearly 23,000 deliverers (see Table 0.23).
Employment – La Poste
La Poste, as a multi-activities player (mail, parcel, etc.), is the largest postal employer in
France. In 2006, around 290,000 people worked for La Poste, of whom 178,330 were in
the mail division and 7,710 in the parcel division (see Table 0.24). Between 2004 and
2006, total employment in La Poste decreased by 5.5%.96
The bulk of La Poste employees are civil servants (see Table 0.23). In 2006, 60% of La
Poste employees were civil servants (in 2004, the proportion of civil servants among the
total number of employees was around 63%). In terms of flexible jobs, La Poste is in the
process of reducing the role of temporary staff (in 2006, the proportion of flexible jobs
decreased by 15%). In 2006, only 6% of the total employment was flexible (temporary)
staff.97
Table 0.23 Employment in the sector, in number of employees and (FTEs)
Operator 2005 2006
La Poste total
La Poste civil servant
La Poste flexible
303,041
184,289
n.a.
289,632
174,164
17,380
Mediapost n.a. 15,500 employees
12,000 deliverers
Adrexo 1,541 employees
25,000 deliverers
1,451 employees
22,671 deliverers
Total
Source: La Poste (2007), websites of Mediapost and Adrexo.
Note: La Poste Group, including postal bank activities; number of FTEs is not available
Note: n.a. is not available.
95
ECORYS questionnaire – La Poste. 96
ECORYS questionnaire – La Poste. 97
ECORYS questionnaire – La Poste.
Country sheet: France 323
Table 0.24 Employment by universal service provider per segment, total and (% flexible)
Postal product 2005 2006
Mail division n.a. 178,330
Parcel division n.a. 7,710
Financial division n.a. 20,174
Network division n.a. 75,909
Total n.a. 282,123 (6%)
Source: ECORYS questionnaire – La Poste.
Note: n.a. is not available.
1.8.2 Employment conditions
Wages as proportion of total costs
In 2006, 62% of the total costs of the La Poste Group were related to wages (including
social benefits, etc.), a small increase compared with 2005 (see Table 0.25). These figures
are not available for other operators.
Table 0.25 Wages as a proportion of total costs (%)
Operator 2005 2006
La Poste 61% 62%
Source: La Poste, annual reports 2005 and 2006.
Note: La Poste Group results.
Minimum wage
There is a national regulation on minimum wage. The SMIC (salaire minimum
interprofessionnel de croissance) is the minimum wage, set by the government at national
level.98
1.8.3 Productivity
No information is available on the productivity of the various postal operators. A rough
estimation for La Poste (volume of addressed mail/number of employees in mail division)
gives a productivity rate of circa 91,000 items per employee.99
98
ECORYS mini-questionnaire on employment – ARCEP. 99
16.3 billion addressed items (98% of the total market for addressed items) divided by 178,330 employees in the mail
division.
Main developments in the postal sector (2006-2008) 324
1.9 Technological developments and the environment
1.9.1 External
Letter mail in the communications market
According to UFMD (French direct marketing association), advertising investments in
France represent € 32.5 billion. This is the global cost of advertising. Direct marketing is
one part of those investments and includes addressed/unaddressed mail, phone marketing,
internet marketing, and direct marketing on TV/radio/press. In 2006, the French direct
marketing market was estimated at € 12.3 billion. Mailings and catalogues represented
35% of this (36.5% in 2005) and included around € 1.6 billion in postal delivery services,
with an increase of 0.95% between 2005 and 2006. The figure for the exact percentage of
letter mail in the communications market is not available (see Table 0.26).100
Table 0.26 Percentage of letter mail in the communications market (turnover)
2005 2006
Market share letter mail n.a. n.a.
Source: n.a.
Note: n.a. is not available.
E-commerce and postal services
The development of e-commerce activities is very important (5% turnover per year on
average) and has become a strategic challenge for the express and parcel activity of the
La Poste Group. Coliposte has grown by 7.2% in a year, notably via internet mail order.
In France, Coliposte and Chronopost have established partnerships with other players in
order to propose several delivery solutions (home delivery, automated delivery box for
parcels) or services (track and trace, information on prices and on delivery).101
1.9.2 Internal
La Poste indicated that its sorting process is based on three types of platform for
networking the whole territory: (i) mail industrial platforms (several dozen), (ii) mail
preparation and distribution platforms (several hundred) and (iii) mail distribution
platforms (several thousand). La Poste has invested in more than 100 preparatory sorting
machines, more than150 industrial sorting machines with small boxes integrated on both
sides of the machine, and more than 500 post delivery-round sorting machines, to sort the
mail in the order in which it will be delivered. A new reading system will permit reading
of the whole surface of the letter, to obtain information about stamping, the sender,
monitoring and to transform all the envelope information into value-added services for
customers, check postage and improve the track and trace system.102
100
ECORYS questionnaire – La Poste. 101
ECORYS questionnaire – La Poste. 102
ECORYS questionnaire – La Poste.
Country sheet: France 325
Figures for the percentage of automatically processed letter mail is not available.
1.9.3 The environment
The ambition of La Poste Group is to reduce CO2 emissions by 15% by 2012, through
several measures such as training in eco-driving (6,500 postal staff trained in 2007) and
double-trailer lorries (30% reduction in CO2 emissions because of optimised loading).
Postal TGVs will offer high-speed services from 2009 onwards. This form of transport
(by Fret GV, a subsidiary belonging to La Poste/SNCF) produces less pollution than road
or air deliveries. Further, La Poste is building sustainable development considerations
(such as integration of environmental parameters) into specifications for new buildings
and programmes for waste sorting on all mail sites. Electric vehicles are being tested and
a European call for tenders has been launched for 500 electric vehicles for 2008 onwards
– 10,000 by 2011 if the trial is successful.103
1.10 Sources
• ARCEP (2006a). Annual report 2005, report by ARCEP, 2006.
• ARCEP (2006b). Postal observatory: 2004, study for ARCEP, April 2006.
• ARCEP (2006c). Postal activities statistical observatory year 2005, study for
ARCEP, December 2006.
• ARCEP (2006d). Behaviour and expectations of single piece mail users: a French
study, by TNS Sofres for the French regulator ARCEP, July 2006.
• ARCEP (2007a). Annual report 2006, report by ARCEP, July 2007.
• ARCEP (2007b). Statistical observatory on postal activities in France – 2006, study
for ARCEP, October 2007.
• ARCEP (2008a). ARCEP publishes the results of its public consultation on access to
mailboxes installed inside apartment buildings with controlled access, press release
by ARCEP, 15 February 2008.
• ARCEP (2008b). Regulation, competition and universal service in the postal sector,
speech by Paul Champsaur (chairman of ARCEP) at the IDEI conference, Toulouse,
14 March 2008.
• Basic (2007). Etude relative à láctivé de routage en France (Study concerning mail
preparation activity in France), study for ARCEP, 2007.
• ECORYS (2005a). Development of competition in the European postal sector, study
for DG Internal Market, European Commission, July 2005.
• ECORYS (2005b). Liberalisation of the Belgian and French postal market, study for
the Dutch Ministry of Economic Affairs, December 2005.
• Eurofound (2007). Industrial relations in the postal sector – France, study by Benoît
Robin and Philippe Zarifian for the European Foundation for the Improvement of
Living and Working Conditions, November 2007.
103
ECORYS questionnaire – La Poste.
Main developments in the postal sector (2006-2008) 326
• Gallet-Ryback, Moreno, Nadal and Toledano (2008). The French postal market in the
wake of the postal law of 2005, paper prepared for 16th Conference on Postal and
Delivery Economics, Algarve, Portugal, 28-31May, 2008.
• La Poste (2006). ARCEP introduces a price cap on La Poste and give postal
authorisation to a La Poste competitor, press release by La Poste, 13 June 2006.
• La Poste (2007). 2006 financial report, report by the La Poste Group, 2007.
• La Poste (2008a). Annual report 2007, report by the La Poste Group, 2008.
• La Poste (2008b), Les résultats de la qualité du service universal postal, report by La
Poste, March 2008.
• http://postinsight.com/ (website on global postal information).
• SPIR (2008). Annual results 2007 (Résultats annuels 2007), report by SPIR, February
2008.
• Weekly Mail and Express News, 12 September 2007.
• WIK-Consult (2006). Main developments in the postal sector (2004-2006), study for
DG Internal Market and Services, European Commission, May 2006.