Singapore’s Postal Sector To Fully Liberalise
Posted on Monday, February 05, 2007 - 07:00 PM
Singapore will open up its postal sector to new players from 1 April 2007, ending SingPost's monopoly of the basic mail services market after some 15 years.
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Press Release:
Come 1 April 2007, Singapore’s postal sector will be fully liberalized. The Government has decided to open the Basic Mail Services market, which includes the collection and delivery of letters and postcards, within, into and out of Singapore, after a 15-year monopoly by Singapore Post Ltd (SingPost).
With this, new players will be allowed in both domestic and international mail services. This adds greater competition to Singapore’s postal sector, which has seen the liberalisation of other segments such as Express Letter Services as early as 19952. The decision will further the Government’s commitment towards building an open economy and strengthening Singapore’s position as a regional business hub. Liberalisation is expected to generate cost savings of S$8 million to S$25 million per year over the next two to three years, to largely benefit businesses. Today, businesses account for almost 95 per cent of Singapore’s total domestic mail.
In 2004, Singapore’s postal services sector generated an annual revenue of more than S$1 billion3. Total mail volume4 has also been growing since the 1990s, and most recently, at about two per cent per year. Liberalisation of the Basic Mail Services market will be the catalyst for greater sector growth. The newly liberalised segment presents a plethora of fresh business possibilities, including value-added services and tailored postal solutions such as letter mail tracking and staggered delivery of letters.
The Government’s decision to open the Basic Mail Services market follows a public consultation in August 2006 by the Infocomm Development Authority of Singapore (IDA). Agreeing that liberalisation will be a catalyst for the postal sector’s growth, the industry had expressed their support and provided inputs on the proposed liberalisation framework. Taking into account the feedback, IDA will effect key changes to promote competition, while ensuring continued provision of Basic Mail Services, public confidence in Singapore’s postal system, and the protection of consumers’ interests:
Key changes to the Basic Mail Services regime
The key changes to the Basic Mail Services regime are given below:
a) SingPost’s 15-year monopoly licence will end. Thereafter, two types of licences will be available:
i. Postal Services Operators (PSOs) designated as Public Postal Licensees (PPLs), with universal service obligations such as providing island-wide letter collection and delivery services, maintaining a minimum number of post boxes and post offices for consumers’ easy access, and offering service quality according to standards set by IDA.
ii. All other PSOs regardless of their service scope
b) IDA will continue to designate SingPost as the PPL. To protect consumers’ interests and taking into account feasibility and security constraints, IDA will also grant SingPost the following:
i. Letterbox masterdoor keys
To ensure that our security concerns of mail integrity and accountability are met, SingPost will continue to hold the full set of letterbox masterdoor keys. IDA will facilitate other PSOs to access SingPost’s delivery network at regulated prices, terms and conditions. The PSOs may also deliver mail directly to letterboxes with no locked apertures. Going forward, if there are PPLs who would like to have direct access to letterboxes, and can propose arrangements that address the security concerns cited, IDA will be open to consider granting such PPLs with letterbox access.
ii. Right to issue national stamps
As national stamps carry the country’s name and to prevent consumer confusion over which PPL the national stamp belongs to, SingPost will continue to be the only one to issue these stamps.
iii. Right to maintain Singapore’s postal code system
For greater operational efficiency, Singapore will keep a centralised postal code management system. SingPost will continue to manage this centralised system, while providing access to the postal codes database to all interested PSOs.
c) The Basic Mail Services market will be opened to competition, including inbound and outbound international mail.
IDA will continue to maintain a robust competition framework to protect consumers’ interests, and ensure fair play and certainty for all in the business. Following today’s decision, public consultations will be conducted within the first quarter of 2007 by the Government to solicit more feedback on details of the regulatory, licensing, and competition frameworks and code.
More details on IDA’s decision on the liberalisation of the Basic Mail Services market can be found at www.ida.gov.sg, under the sections “Policies & Regulations”, “Consultation Papers & Decisions”.
ISSUED BY INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
Singapore, 5 February 2007
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Speech By Dr Lee Boon Yang, Minister For Information, Communications And The Arts, At Press Conference On 5 February 2007 , 5 February 2007, 5.15 Pm At Esplanade Room, Mica Building
Liberalisation of the Basic Mail Services Market from 1 April 2007
Good evening Members of the media
Thank you for attending this press conference. I know that it is not the best time in the day to hold a press conference but the announcement had to be done after the stock market closed as it concerns the further liberalisation of postal service in Singapore.
2. In 1992 SingPost was granted a Public Postal Licence with a 15-year exclusive right to collect and deliver ordinary letters and postcards within, into and out of Singapore. This exclusive right covers what is known as "Basic Mail Services". Three years later in 1995, the provision of express letter services was liberalised and open for competition, along with the delivery of printed paper, such as marketing brochures, and parcels. In fact, today the delivery of parcels does not even require a licence from IDA.
3. I am pleased to announce that the Government has decided to liberalise the market for basic mail services wef from 1 April 2007, following the expiry of SingPost’s exclusive rights for basic mail service on 31 March 2007.
4. This means that the basic mail services market will be open to competition after 1 April 2007 and new players will be able to apply to provide conveyance services for letters, including postcards, within, into and out of Singapore.
5. I would like to assure the public that there will be no disruption to Basic Mail Services and consumers’ interests had been taken into account in the proposed changes.
6. The Singapore Department of Statistics’s record shows that the postal services generated about S$1 billion in revenue from about 596 establishmentsin 2004. Total mail volume has been growing since the 1990s and in recent years, the average growth rate is about 2% per year. We expect this growth trend to continue into the near future.
7. The decision to further liberalise the postal services sector in Singapore was arrived at after careful assessment and taking into consideration the feedback received during a public consultation conducted by IDA between 18 August and 29 September 2006. The industry has expressed their support for this move as they believe that liberalization will be a catalyst for the postal sector’s growth.
8. Greater competition in the basic mail services market will benefit users through more service innovation and price competition. Business users, who account for more than 90% of total domestic mail sent, will benefit from the competitive environment for bulk mail, better service quality, and greater choices of service provider. International mail service users are also likely to benefit from greater competition.
9. Overall, competition will also promote further innovations in Singapore’s postal industry and will incentivise the incumbent to further improve its service quality and efficiencies. Liberalisation of the Basic Mail Services market will also see spill-over benefits into the growing printed paper segment, and other segments of the economy such as enhancing Singapore’s position as a regional printing hub. The liberalisation of the basic mail services market is expected to result in estimated cost savings of $8 million to $25 million per year for the next 2 to 3 years.
10. The Government is mindful of concerns on mail integrity and security and the need to preserve high user confidence in the public postal system. As the postal authority, IDA will be putting in place appropriate regulatory frameworks to ensure that consumers continue to enjoy high service quality for basic mail service as well as maintain the public confidence in the reliability and availability of basic mail services.
11. IDA will be releasing more details on the liberalization and regulatory frameworks. MICA and IDA will also be launching a public consultation on the proposed changes to the Postal Services Act and the Regulations shortly. We encourage views from individuals and businesses on the proposed changes.
May 17, 2008 - 02:58 PM
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