Scroll Text

........ CITIZENS DUTY & SLOGAN ::: It shall be the duty of every Citizen of India to defend the Country and render National service when called upon to do so ... SLOGAN ::: "That loyalty to the Country becomes ahead of all other loyalties. And this is an absolute loyalty since one can not weight it in terms of what one receives" (Lal Bahadur Shastri) ..... face book page link for 4th AIC of AIPEU GDS ... ......... .......

scroll text 2

......... .............. CONGRATULATIONS TO THE SELECTED CANDIDATES FOR THE POSTS OF GDS ..................... 4th All India Conference of AIPEU GDS - 8th & 9th October 2022 -- Kasaragod - Kerala ......


... ... Dear Comrade newly elected Divisional / Branch Secretaries of AIPEU-GDS -- PLEASE SEND YOUR POSTAL ADDRESS WITH PIN CODE, MOBILE NUMBER, E-MAIL ID THROUGH SMS TO .. 6294343737 / 9748659815.. OR BY E-MAIL TO >< IMMEDIATELY................... CRUSADER TO GRAMIN DAK SEVAKS (2nd Edition -2016) is ready and can place indent to AIPEU GrC (CHQ), NEW DELHI-8....... One copy Rs.225/- (560 pages) ..... Send e-MO for Rs.250/- to receive one copy of the Book by Regd. Book Paket..........

Thursday, November 14, 2013

On Privatization of Postal services ......... about Royal Mail ......!!!!!!

Royal Mail has been privatised. Even after Margaret Thatcher’s frenzy in the 1980s, it was one of the last UK public enterprises left; now, the coalition government has sold 52% of Royal Mail. Whereas Thatcher’s push for privatisation was mainly driven by ideology, this latest one was principally fueled by fiscal opportunism.
The sell-off was a success, with the initial public offering eight times oversubscribed. But postal services are not generally great business propositions these days and the privatization of state-owned operators is the exception, not the rule.
So what exactly is it that makes Royal Mail such an attractive investment? Here’s a hint – it’s not delivering letters or parcels.
 Privatisation elsewhere
The first privatized national postal operator in the world – and the only fully privatized one – is the Dutch postal service, whose transition to a private entity is a complicated story. The then-joint Dutch Post and Telecom Service (called KPN) was floated on the stock market in 1994; in 1996, it bought the private Australian integrator TNT in a friendly takeover. The service was then separated into Post and Telecom in 1998. Post was still majority-owned by the Dutch government; it was renamed TPG in 1998, then re-branded as TNT in 2005 and fully privatized in 2006.

But despite its early mover advantage, the postal business was not a success for TNT. Its shareholders first decided to sell the parcels unit, then split the remaining company into TNT (international express) and NLPost (national mail service) in 2011.

This extended privatizing process has been a disaster. The Dutch have been forced to accept numerous concessions in the provision of postal outlets, frequency of delivery and more besides in order to have a national postal service at all.

By comparison, the privatization of the German service has been far more successful. In 1989, the old Deutsche Bundes Post was split into three separate companies: Postal service, Telecoms and the Postal Bank. While Deutsche Telekom and Postbank were privatized  Deutsche Post remained in government ownership. Substantially helped by the German government, it used hidden subsidies to go on a global shopping spree, especially in Eastern Europe. In 1998 it began acquiring the parcels operator DHL, gaining majority ownership in 2001.

The government gradually sold off its shares in Deutsche Post, and by 2005 the majority were in private hands. Today, the German government holds approximately 30% of the company. Thanks to continued government support and its global acquisitions, the partially privatized Deutsche Post DHL has become the world’s biggest and most successful logistics operator.

Yet the successful partial privatization of Deutsche Post / DHL can not be replicated, neither by Royal Mail nor by anyone else – and few countries have even tried in earnest. Japan Post, despite numerous announcements, has yet to sell a single share after years of political squabbling; Singapore Post, the “fully privatized  postal operator, remains owned by the government’s sovereign fund.

In fact, beyond Germany, there are only two real examples of partial privatization  Austria Post and Belgian Post (called bPost). However, both are still majority owned by their respective governments, which remain wary of letting fully privatized operators run their services.

Decline and fall?

Privatization pays off: Deutsche Post DHL is the world’s largest parcels courier.  The future for postal operators worldwide does not look good. Traditional letter mail is being replaced by electronic mail at annual rates ranging from 2%-3% (on average in Europe) to up to 10% (Scandinavia); in 2012, the US Postal Service (USPS) ran a record deficit of $15.9 billion (£10 billion).

And even though the parcel market is still growing thanks to electronic commerce, few national postal operators are actually capable of taking advantage of this opportunity. The parcel business is truly global, but it primarily benefits big multinationals - among them DHL (Germany), Fedex (USA), UPS (USA) and DPD (France) - and not national operators.

So at a time like this, and given postal privatization's very chequered history, why was the privatization of Royal Mail such a success for investors? The answer may actually be quite simple: like any long-established postal operator, Royal Mail owns a great deal of real estate in prime city centre locations. Assets like these can easily be sold off now that the mail business is declining and local customers rarely visit a post office.

So the success of the Royal Mail sell-off might simply be another indicator - albeit a rather paradoxical one - of traditional mail’s apparently terminal decline.