The Impact of the USO on the Profitability of Postal Service Provision
Heli Koski
No 19, ETLA Reports from The Research Institute of the Finnish Economy
Abstract:
Abstract This study aims at investigating the order of magnitude of financial burden of the universal service obligation for the universal service provider, Itella, in the Finnish postal sector. It evaluates the difference between universal service provider’s profitability with the universal service obligation and without it. The data suggest that the provision of universal letter services in compliance with the law causes a notable financial burden for Itella. The profitability of the universal service provider is clearly lower than that of other firms active in the Finnish postal and courier activities sector. During the years 2005–2012, the annual loss due to the universal letter service obligation was about 76 million euros, or 5–8 percent of the turnover of the universal service provider.
Keywords: Universal service obligation; Profitability; Net cost; Postal services (search for similar items in EconPapers)
JEL-codes: D22 L50 L87 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2013-11-18
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