Market liberalization - Fair competition requires a level playing field
At its annual press conference on March 20, 2007, Deutsche Post World Net reaffirmed that it favors the complete liberalization of the mail delivery market. At the same time the company stressed that market deregulation must be based on equal conditions for all competitors throughout Europe. However, Deutsche Post World Net believes that the necessary equal conditions will not be created in other European countries in the foreseeable future. Furthermore, a clear discrepancy in how employees are being treated is currently emerging in the German market: Whereas Deutsche Post provides its delivery personnel with appropriate wage levels and social insurance, wages paid by competitors partly are so low that even full-time employees are forced to apply for public transfers in addition to their wages.
In view of these two trends Deutsche Post World Net is appealing to German legislators to make sure that liberalization is implemented in a reasonable and responsible way in Germany and throughout Europe. Dr. Klaus Zumwinkel, CEO of Deutsche Post World Net, said at today's annual press conference: "We are supporting free competition and freedom of choice for the customer. But we want to see the same fair conditions for all market participants."
The European Commission has proposed that the European mail delivery market be totally liberalized in 2009. Germany plans to deregulate the sub-segments that are currently still partly regulated in 2008. Deutsche Post began preparing for liberalization early on. It offers high-quality universal service with full regional coverage at affordable prices. Through increased focus on the customer, offering new services to both private and business customers, increasing cost flexibility in conjunction with the employment pact and the leveraging of efficiency reserves, the Group has been able to defend its market position even though competitors in the German mail delivery market are now generating more than half of their revenues in the monopoly segment.
Deutsche Post World Net supports liberalization at the proposed point in time, but this support is subject to certain requirements. If the market is to be deregulated early, that is in 2008, Deutsche Post World Net considers a delay of one to two years in other European markets to be acceptable. But if no agreement is reached on a uniform liberalization date at the European level, legislators should reconsider opening up the German market in 2008.
In conjunction with the liberalization of the German market Deutsche Post considers it imperative that the legal basis for universal service be modernized and adapted to changing customer communication habits. The Group plans to maintain its network of post offices and mailboxes at the current level in the foreseeable future. But the legal framework should be based on the real basic demand, and Deutsche Post, as universal service provider, should be afforded the option of operating economically in this field and be able to shape costs and prices accordingly.
In view of the current competitive trend in Germany, Deutsche Post believes that the clear objective of legislators to prevent precarious working conditions is in danger and will not be achieved. On the topic of wages and working conditions, the company is of the opinion that the Federal Network Agency, as the controlling authority, has an obligation to more closely monitor adherence to social standards. When granting contracts public institutions should also take into account working conditions and social criteria, because money saved on mail delivery costs could well be offset by increased costs for transfer payments passed on to mail delivery employees.