integrated postal reform and development plan2 integrated postal reform and development plan (ipdp)...

UPU

UNIVERSALPOSTALUNION

December 2010

Integrated Postal Reform and Development Plan Guide to the preparation of the universal postal service proposal (For countries with a basic level of postal information) Additional tool for Integrated Postal Reform and Development Plan (IPDP) methodology

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Integrated Postal Reform and Development Plan (IPDP) Guide to the preparation of the universal postal service proposal (For countries with basic levels of postal information) Authors

UPU/PUASP Consultants

– Mr Guillermo Ronderos Tobón (coordinator)

– Mr Francisco Javier Valverde Benito

– Mr Fernando Augusto Garin Camejo

– Mr Jorge Enrique Aldana Margáin Project Management Team (PMT)

– Mr Rudy Cuadra, Latin America and Caribbean Programme Manager and UPU Postal Reform Coordinator

– Ms Serrana Bassini Casco, Secretary General, Postal Union of the Americas, Spain and Portugal (PUASP)

Logistic support and final check Mr Nestor Calderón Goyenaga, UPU Associate Expert Technical support directorate Ms Susan Alexander, Expert with the Economic and Regulatory Affairs Directorate (DER) Typing Ms María Elena Arias, UPU Regional Project Coordinator's Office This guide is a methodology tool for the Integrated Postal Reform and Development Plan (IPDP) formulated within the framework of the UPU/PUASP Regional Development Plan for Latin America. It is intended to support countries' efforts to reform the postal sector. December 2010

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Table of contents Page Introduction

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Stage one – Organization of the work

10

A. Government authorization for formalizing the execution of the work

11

1 Meetings with institutions 11

2 Formal designation of the coordinator and liaison with institutions 11

3 Communications regarding formalization

12

B. Formation of the working party

12

1 Composition of the working party 12

2 Formalization of the group's composition and undertakings to participate 14

3 How the group will work 14

4 Designation of the support groups

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C. Coordination of the team's work

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1 Resources and time available for carrying out the work 181.1 Human resources 181.2 Physical resources 191.3 Financial resources 19

2 Working party and support group meetings 202.1 Working meetings 202.2 Organizing the allocation of the work 21

3 Training the working party and support groups 223.1 Content of the training 223.2 Carrying out the activity 23

4 Verification of available information 24

5 Preparation of timetables and schedules 25

6 Establishment of monitoring and follow-up mechanisms

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Annexes 1.1 Invitation to participate in the work on formulating the UPS proposal 31

1.2 Profile of the coordinator of the work on formulating the UPS proposal 32

1.3 Designation of the coordinator of the work on formulating the UPS proposal 33

1.4 Profile of the working party members from the various participating bodies 34

1.5 Record of the constitutive meeting of the working party responsible for defining the UPS 35

1.6 Designation of the support groups 36

1.7 Checklist of the most important activities to be carried out in stage one 37

1.8 Physical and logistical requirements for the working meetings 39

1.9 Model of minimum budget for carrying out the work 40

1.10 General outline of the training workshop 41

1.11 Detailed timetable for the training workshop 42

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1.12 General schedule of activities in stage one – Organization of the work 45

1.13 Model of general schedule of work 47 Stage two – Preparation of the information and analysis of the current situation

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A. Criteria for preparing the information

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1 Structure and quality of data by subject matter 491.1 General points 491.2 Information required 501.3 Additional or updated information required 51

2 Preparation of schedule (timetable – programme) for obtaining and supplementing information

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B. The current range of basic services

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1 Reviewing the available information and the results of the work on updating and supplementing it

52

2 Preparation of tables of services and conditions of service provision 522.1 Scope and features of basic postal services 522.2 Conditions of basic service provision 532.3 Prices of basic services 60

3 Definition of postal indicators 613.1 Introduction 613.2 Basic indicators 613.3 Comparative analysis of basic indicators 62

4 Conclusions on current offer of services

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C. The market

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1 Review of the available data and the results of the work on updating and supplementing it 64

2 Defining the information needed 65

3 Specifications for each category of information 653.1 Information concerning demand 653.2 Information concerning the offer of services 67

4 Methodology for obtaining information 68

5 Research to supplement the market data 695.1 Planning and organization 695.2 Hiring a market research firm 695.3 Carrying out the research 705.4 Production of data

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D. Costs

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1 The importance of defining costs 72

2 Cost of universal postal service (UPS) 732.1 UPS cost variability 732.2 Use of information on UPS costs 732.3 Types of UPS costs identified in the process of preparing the UPS proposal 74

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3 Handling the question of costs in the preparation of the UPS proposal 743.1 General topics 74

4 Basic information 77

5 Calculating current UPS costs (basic services currently provided) 81

6 Defining the UPS cost calculation model for simulations

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Annexes 2.1 Format for providing information 91

2.2 Schedule for obtaining and supplementing information 102

2.3 Methodology for defining the current situation as regards basic postal service delivery times 103

2.4 Personal survey interview with business customer 106

2.5 Personal/telephone survey interview with parcels business customer 111

2.6 Personal or telephone survey interview with operators 116

2.7 Formal letter model for obtaining the information required from the public sector 120

2.8 Formal letter model for obtaining the information required from financial bodies 121

2.9 Market surveys, interviews and questionnaires 122

2.10 Cost structure model 126

2.11 Model schedule for obtaining information 129

2.12 Calculation of unit costs 130

2.13 Adjustment factor table

133

Stage three – Definition of scenarios and simulations

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A. Scenarios

137

1 Determining factors and elements of scenarios 138

2 Definition of scenarios

139

B. Simulations

141

1 Model used 142

2 Definition of standard unit costs for each scenario 143

3 Expected benefits in each scenario 151

4 Calculations

152

C. Economic evaluation of results and funding needs

152

1 Operator's own income 153

2 Reserved area 154

3 Industry contributions 155

4 State contributions

155

D. Conclusions of the simulation

156

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PageAnnexes 3.1 Selection of fixed and variable factors and elements 161

3.2 Steps for carrying out a simulation study 163

3.3 Projections of designated operator's volume and revenue 164

3.4 Projections of designated operator's volume, revenue and costs 165

3.5 Cost projections 166

3.6 Access to acceptance in offices and home delivery. Scenario

167

Stage four – Drafting the universal postal service proposal and seeking support

168

A. Defining the components of the universal postal service proposal

169

1 Conceptual bases of the universal postal service 169

1.1 The universal postal service as a constitutional obligation and fundamental right 169

1.2 The universal postal service as an obligation undertaken in international postal agreements 169

2 Political basis and social involvement in the country's economic growth and development 170

3 Sectoral situation and need for IPDP-based reform 172

4 Obligations that can be assumed by the State to guarantee basic postal services in the country 173

5 Specifications of conditions of State-guaranteed basic postal services 174

5.1 Scope of services included in the universal postal service 174

5.2 Level of access 174

5.3 Quality of services 176

5.4 Price of services 177

6 Economic support for the proposal. Sustainable financing and costs 178

7 Political support for the proposal

178

B. Preparation of the proposal document

180

1 Definition of the methodology for drafting the proposal 180

2 Distribution to team members of sections of the document as they are completed 180

3 Drafting and execution of the schedule of activities 180

4 Discussion of the document and PowerPoint presentation attended by the operator and regulator

181

5 Printing of the amended document and presentation

181

Annexes 4.1 Table outlining the postal sector's contribution to the Millennium Development Goals 185

4.2 Diagnostic table of the postal situation 187

4.3 Prototype UPS proposal 191

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Introduction In line with the world postal strategy adopted by the Universal Postal Union (UPU), international postal stakeholders have focussed their efforts on taking forward sectoral reform and development processes in order to guarantee universal postal service provision in developing countries. They have based these efforts on the actions provided for in the integrated postal reform and development plans (IPDPs), which have now been formulated in over sixty countries worldwide. The universal postal service is enshrined in the UPU Acts, particularly in terms of the minimum service obli-gation incumbent upon all member countries. Each country, however, is required to define the characteristics and conditions of its universal postal service, which must be based on its particular situation. In doing so, account should be taken, inter alia, of economic, financial and social considerations. The universal postal service is the bedrock on which the organization of a country's postal sector should be based, and defining it accurately could prove decisive to the future of a country's postal services. For this reason, defining the universal postal service is the first thrust of the UPU's IPDP-based postal reform. In the light of the difficulties governments may experience in defining this first area of reform in a scientific and objective manner, this practical guide has been developed as an additional tool aimed at presenting the countries with a validated methodology for defining their universal postal service. This first step is essential and constitutes the basis for the following thrusts of the reform, namely the devel-opment of a sectoral policy and the preparation of an appropriate legal framework, which should allow the designated operator's services to be modernized.

The processes involved in sectoral reform are complex, and the decisions taken have far-reaching economic and social consequences, involving various public authorities and also the private sector. Consequently, the basis for starting the reform process, i.e. "Defining the UPS", must be sufficiently sound to support subsequent decisions concerning sectoral policy, the legal framework and the development of postal services. Therefore, in order to support countries that have decided to launch the process of postal sector reform, this guide has been prepared to serve as a useful tool in taking the decisions involved in defining obligations to guarantee the UPS.

Universal postal service

Areas of IPDP postal reform

Sectoral policy

Legal framework

Modernization of operator’s services

Practical tool –

Manual for defining UPS

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The manual is a practical and instructive step-by-step guide to the activities that need to be carried out to achieve a viable UPS proposal, according to the specific conditions existing in each country. It is anticipated that this work will be carried out in conjunction with an integrated professional team from the main areas of government dealing with postal activities, as well as the players directly involved, the regulator and the designated operator. Willingness on the part of the countries' high-level authorities to drive forward and support the process of sectoral reform is an essential factor in executing the work, which is carried out in four stages:

– Stage one is the organization of the work. This comprises carrying out the necessary preparation to ensure that resources are available so that the objectives will be achieved.

– Stage two consists in preparing the information required and developing working tools. The guide provides access to information on services currently offered, the market, and cost calculation.

– Stage three is the definition of scenarios and simulations. This is a guide to using the information obtained in the previous stage, in order to create scenarios and carry out simulations of profit and expenditure results, so that financial sustainability and viability can be defined.

– Finally, stage four deals with the formulation of the universal postal service proposal, tailored to the country's real situation and needs. It sets out guidelines for preparing the document presenting and supporting the proposal.

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Stage one – Organization of the work

The organization of the work is a key element in the implementation of any project. During this stage, the aim of the manual is to guide the user in this fundamental aspect by analyzing the first steps to be taken when embarking on the process that will lead to a UPS proposal for the country. These initial steps consist in obtaining formal authorization from governments to begin carrying out the work, appointing the working party, the coordinator and the support groups, defining the elements of their training, appointing persons responsible for each task, and defining the time frames for implementation and the coordination mechanisms.

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A. Government authorization for formalizing the execution of the work

Given the relevance of the sector and the implications of decisions relating to the universal postal service, active government participation is needed, through the regulator or a body carrying out that function. This body is responsible for arranging coordination with sectoral players directly connected with postal reform, coordination meetings, and the formalization of the letters needed to enable the work to begin and proceed. If the sector has no regulator, the designated operator should undertake this role. Formal invitations to participate, and official convocations for the coordination and execution of the work should be issued by the postal sector's supervisory ministry. In these letters, the ministry will invite the various bodies involved in postal matters and national development to participate in the work of defining the universal postal service that the country will adopt. Annex 1.1 contains a model of the letter format, which should be adapted for each country. It is important for the letter to be signed at the highest ministerial level, either by the minister or by the secretary of state, to reflect the formality and importance of this work. The prospective participating ministries should be contacted beforehand, for information purposes and to raise support for the work. 1 Meetings with institutions

The body leading the management and execution of the process, either the regulator or designated operator, should be actively involved in the management and activities connected with organizing the work so that suitable people can be appointed to represent each participating body. It should also undertake to actively support the achievement of the relevant work objectives. As a first step, the regulator and the designated operator should hold the necessary coordination meetings so that preparations for the work can begin. One of the first actions should be to prepare the necessary information material and presentations for the explanatory meetings with the other bodies involved. In order to obtain commitments from these bodies, explanatory meetings will need to be held with each of the institutions invited, to convince them of the importance of their participation. This is a fundamental point, as it will be difficult to achieve the desired results without the involvement of these players. Developing the most suitable universal postal service for the country, and the formal decision of the govern-ment authorities to adopt it and apply it legally, have implications at national level. These extend not only to the jurisdiction of the postal sector's supervisory ministry, but also to the economy and public finances, plan-ning for national development, and other areas of the country's infrastructure, as well as the private sector in the areas of services, industry and commerce. Consequently, to ensure that the group of government officials operates effectively, the participants responsible for executing the work should, as a minimum, include representatives from the ministry responsible for the economy and finance (the Treasury), the ministry for national planning and, if appropriate, state reform. 2 Formal designation of the coordinator and liaison with institutions

A basic requirement for the success of the work is the appointment of the work coordinator, as he has to liaise between the various institutions participating in the process, as well as organizing and coordinating the preparation and progress of the work. When appointing the coordinator, it is important to bear in mind that the person who will fulfil this role must be at a sufficiently high level (in the regulatory body, the designated operator or other state body), and be capable of carrying out the role competently. Appointing a person without the necessary qualifications could cause serious problems with the work. Given the need for flexibility in this role, it would be advisable for the appointee to be familiar with the postal service, preferably working with key players in the sector, the regulator or the designated operator. If there is a director of postal reform or a director of IPDP implementation, these officials can take on this role and either carry it out in person, or delegate assistants to carry out the work coordination tasks under their direct supervision, while retaining responsibility for the results. The person appointed will preferably be familiar with the public and postal sector, and have the necessary personal qualities to maintain good coordination between the supervisory ministry, the regulator, the

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designated operator and the other participating institutions. The person profile for the role of coordinator is given in Annex 1.2. The coordinator should be appointed formally by the supervisory minister responsible for the postal services. As far as is possible, and in accordance with the regulations of each country, the appointment should be public, so that the ministerial and postal sector officials and the other bodies involved are aware of it. This is to ensure that the appointment has the necessary administrative status. Annex 1.3 contains a model for the appointment of the coordinator. 3 Communications regarding formalization As has already been mentioned, the first formal letter should be from the supervisory minister for the postal services, making known the decision to carry out the work of defining the universal postal service (UPS). It should stress the importance of this work, and of the involvement of all the bodies invited to take part, i.e. the ministries responsible for planning, finance and the economy, the postal services regulator, the designated postal operator, and the directorates of postal reform or IPDP implementation, if these bodies exist. Given that the names of the various bodies and ministries can vary from one country to another, care should be taken to include the bodies responsible for these roles, preferably represented by persons who have participated in the IPDP formulation process. Guidelines and official contacts with other areas of government should come from the supervisory ministry with responsibility for the postal services, and be initiated and led by the regulator and the directorate of postal reform, if one has been set up, in conjunction with the designated operator. The work should be carried out on a formal basis and be accompanied by administrative procedures that support and formalize the decisions taken by the authorities. This will ensure that the obligations and responsibilities of all those involved in fulfilling the undertakings and objectives entrusted to them are clearly defined. Written communications from the authorities are part of these essential administrative procedures for formalizing the decisions taken. B. Formation of the working party 1 Composition of the working party When creating the working party, it is very important to consider a number of points. These include the criteria to be taken into account when selecting the members, the need for interdisciplinarity, and the deadlines for executing the work, which will determine the time and commitment required on the part of members to carry out the various tasks. This information will then be submitted to the prospective government participants for their consideration and action. Criteria for the group's composition As with the IPDP preparation process, the government should form a working party. This team will be responsible for the technical task of preparing, supporting and presenting the UPS proposal to the sectoral and governmental authorities, and should provide sufficient data to enable them to take the relevant deci-sions. The composition of the national team is therefore an essential and key part of the process of executing the work. The government should therefore be aware of the need to appoint the best specialists available, bear-ing in mind that they will have to devote themselves exclusively to this demanding work for a period of two to three months. As in the case of the IPDP, the preparation of the universal postal service proposal will be carried out by the working party. If during the execution of the work it is considered necessary to call on the cooperation of international postal organizations, external experts such as facilitators, guides and trainers may be brought in to assist during the implementation period.

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Participating bodies The working party must be an interinstitutional body, made up of technical officials from various government bodies (the supervisory ministry for the postal sector, and the ministries responsible for the economy, finance and national planning), and officials of the designated operator and the regulator. It is also important to ensure the participation of technical officials working in areas responsible for fulfilling the Millennium Development Goals. If they do not belong to the government departments mentioned above, efforts should be made to seek their participation. The importance of the interinstitutional character of the working team lies in the fact that the application of the UPS proposal will undoubtedly have repercussions far beyond the postal sector. It will only be possible to apply the decisions in practice if the bodies involved participate actively, giving their judgement and points of view both on the proposal's content, and on the approach to be taken and the arguments in its favour. In expressing points of view that are based on their areas of expertise, and in some cases differ from those of the postal sector, the officials from the ministries responsible for the economy, finance and national plan-ning, given their status, enhance the quality of the final proposal and strengthen the arguments in its favour. Profile of the members of the working party The role of the members of the working party is to bring their technical expertise to the UPS proposal, act as a means of liaison in the execution of the work, and be a driving force and mainstay of the approaches to the proposal. It is therefore essential to secure the participation of specialists in the economy, finance, planning, marketing and postal operations (including administration, finance and service costs). Ideally, team members will have experience of the postal reform process, preferably in the field of IPDP formulation, and should have easy access to their country's specialized data, and be in a sufficiently senior position within their organization to be able to consult the authorities in the course of their research. The coordinator should work with the authorities of the participating bodies responsible for applying the selection criteria and draw up a list of each entity's eligible members in accordance with the relevant profile. The appointment of technical officials will be personal, exclusive and non-transferable, to ensure continuity and avoid having different staff from the same government body participating in the work. Annex 1.4 contains a guide to the profiles of the working party members for each participating body. Number of working party members The number of participants is important, as a very large working party would impede the progress of the work. When deciding on the number of members, the characteristics, criteria and customary practice of each country should be taken into account. However, the group should contain a minimum of seven members, and a maximum of ten, including the coordinator. In exceptional cases, the group can consist of six members, provided it has sufficient skills and technical ability in the relevant areas (services, marketing, costs). The following table sets out the suggested number of working party members:

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Participating body Minimum number of members

Ministry responsible for the economy, finance and the treasury 1

Ministry for planning 1

Supervisory ministry for the postal services 1

Regulator 1 or 2

Designated operator 3 or 4 Availability Members of the group must be available while the work is being carried out for a period of no less than two months (eight weeks) and no more than three months (12 weeks). In addition, they must devote the nec-essary time to compiling the information needed in advance. During this time, the team members must devote themselves exclusively to the work full time, from 8.30 to 18.00, Monday to Friday, throughout the period indicated in the general timetable for the execution of the work. 2 Formalization of the group's composition and undertakings to participate The designation of the working party members must be carried out formally by means of the relevant administrative document or, if possible according to the administrative practices of the country, by the supervisory ministry for postal services. This administrative decision is the means by which the government authorities initiate the work, and should therefore be accorded the due official status. The supervisory ministry responsible for the postal services should inform the coordinator of the work and the participating bodies in writing of the composition of the working party, indicating the names of the group members representing each body, and the name of the coordinator, who will have been designated in advance. This letter will be organized by the body leading the work (the regulator or the operator) or by the coordinator, who should already have been designated by that time. The ministry's letter will also reiterate the objectives and the way in which the work will proceed in terms of time, place and the commitment required from the participants. Particular attention will be drawn to the group members' obligations in terms of results. To highlight the importance of the work and the part it plays in postal reform, the inaugural session (the first session of the second stage of the execution of the work), should be attended by an official from the supervisory ministry for the postal services and directors from the regulatory body and the designated operator. The record of the constitutive session (Annex 1.5) should record the undertaking given by all the team members, and should stress the need for the exclusive services of the representatives from the various bodies, to avoid delaying the work. 3 How the group will work The working party will have the necessary autonomy to carry out its work. However, the working methods must be clearly defined and set out in highly detailed schedules, day by day and hour by hour, providing full details of meetings (with support groups, for example), activities, exercises, investigations and other tasks comprising the methodology of the work or the implementation of the relevant stage. In addition to the discussions held on topics relating to the work, the existing data will need to be gathered, checked and distributed. This task will be possible only if group members are designated to carry it out, preferably according to area of expertise. If it is considered necessary, the group should keep a record of key decisions and agreements reached in the course of their work, clearly specifying the relevant undertakings given by the members. Aspects relating to the form of work and the way it will be organized are dealt with in detail in section C, and are therefore covered here in general terms only.

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Place of work To carry out its duties satisfactorily, the team will need suitable premises, in terms of both space and working conditions. The place where meetings are held should be for the exclusive use of the group for the duration of its work, as changes of location could result in setbacks to the programme. Although this aspect may seem unimportant, it is essential if the desired objectives are to be achieved. Working premises that are unsuitable, either because of their location, or because the lighting, ventilation or general standard is poor, could impede the smooth progress of the work. Facilities The working party and support staff should have at their disposal the necessary facilities to ensure that the work proceeds smoothly. Among other things, they will need computer equipment, a projector and screen, a photocopier, and a whiteboard or flipchart. The provision of refreshments (at least coffee or water) is recommended, so that members can take breaks without interrupting their work and disrupting meetings by going out. The importance of easy access to washroom facilities (at a reasonable distance) should also be borne in mind. The support team should be sufficiently well staffed to support the group in its work. Working hours The coordinator will set the hours of work, taking into account the customs and practice of the country, and submit them to the group for discussion at the meetings held prior to the start of stage two of the work. In stage one, those participating in the work (working party and support groups) will attend a one-week training session, five days a week, from 8.30 to 18.00. The team will begin its work on stage 2, after first drawing up the relevant timetable. However, the amount of work involved in this and subsequent stages will require a programme of full-time working, with hours as indicated above. Team members should be aware of these conditions from the outset, so that they can participate fully and avoid other commitments which could disrupt the progress of the work. Time frame The team members will be familiar from the outset with the general timetable estimating the time needed to carry out the various stages of the work, and the expected start and end dates for each stage. At the coordi-nation meetings held prior to the start of each stage, the coordinator will submit to the team for approval the programme of activities, tasks, special meetings, exercises and investigations set out in the detailed sched-ule of work. Stage Activity Duration (weeks)

One Organization –

Two Preparation of information and working tools 3 to 5

Three Preparation of scenarios and simulations 2 to 3

Four Formulation of the UPS Proposal 3 to 4

Total duration of the group's work 8 to 12

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Diagram: Consideration should be given to the way in which the work is to be carried out:

– Stage 1, "Organization", consists in preparation work carried out in advance, before the group starts implementing the work. It can take from three to six weeks, including one week's training for the work-ing party and the support teams. This time frame does not include the execution of the work, as this can take longer than anticipated. Once the team members have been appointed, the coordinator holds the necessary meetings to enable the work to begin.

– Stage 2, "Preparation of information and work tools", can take three to five weeks, depending on how easy it is to obtain the information required. In this stage, the timetable should allow for two or three meetings a week with the support groups, varying in length according to need. This stage marks the beginning of the period for executing the work.

– In stage 3, "Definition of scenarios and simulations", the tasks involved in each of the two activities can take between two and three weeks. The assistance of the support groups may be required in this stage.

– Finally, stage 4, "Formulation of the UPS proposal", consists in preparing the proposal document according to a detailed work schedule. This stage will take between three and four weeks if an inten-sive pace of work is maintained.

In the course of the various activities, the team's work can be shared out among subgroups, given the num-ber of members and their fields of expertise. This will enable work to be carried out simultaneously on various aspects, thus reducing the time required. 4 Designation of the support groups Most of the team's tasks require the cooperation of various sections of the participating bodies, in particular the regulator and the designated operator. This means that the form which this cooperation is to take needs to be defined. Specialized groups made up of staff of the regulator and the designated operator need to be created. Their objective is to obtain and organize the information required, carry out any research work that may be necessary, make calculations, supplement or update information, etc. The team will therefore need the cooperation of at least three support groups in the following areas:

– Operation of services;

– Marketing;

– Finance and administration. If necessary, the team can also call in legal specialists to help with research. The importance of interaction between the team and these support groups should not be overlooked. The groups will provide the team with the information it needs to carry out its analysis, and thus to take decisions enabling the work to progress.

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The team should designate one of its members to liaise with each of the support groups. The person desig-nated will be responsible for liaison with the group, and will coordinate the group's work. As a member of the team, the liaison officer will know what is needed and will be able to plan the work of the support group, in order to meet its objectives in a timely manner. The members of the support group should be technical experts skilled in their particular fields, and have sufficient time to carry out their work. This means that they must devote themselves to it exclusively, at least during the implementation of stage two, and also stage three if necessary. They also have to attend one week of training in stage one. Through the coordinator, the group will establish its working commitments and agreements with the relevant body. However, while remaining under the coordinator's supervision, for certain questions, and if the situation warrants it, mechanisms can be set up for more direct collaboration with the bodies' authorities and the line managers of the staff members concerned. As in the case of the working party, it is very important for the support groups' participation to remain on a formal basis, so that each member's obligations will be clearly defined. This should ensure that each member makes a real and effective contribution. (See Annex 1.6). C. Coordination of the team's work Preparations for carrying out the work, and therefore the team's activities, require a committed effort on the part of the coordinator, to ensure the timely availability of all the elements needed for the work to proceed properly. The coordinator is responsible for organizing the execution of the work in order to achieve the desired results. The achievement of the objectives depends to a large extent on the coordinator's diligence in identifying and obtaining in good time all the resources needed to carry out the various activities and tasks involved in the work. Given the nature of the work, and the involvement of various bodies and a significant number of specialists in different disciplines, which will in turn need help from other specialist groups, it is particularly important to take sufficient care over planning the organization of the activities, thus minimizing unexpected situations, which could prove a hindrance. In order to organize, coordinate and monitor the execution of the work, human, physical and economic resources should be put in place in advance, and be available at the start of the work and during its imple-mentation. This is the responsibility of the coordinator, who has to make the necessary arrangements as soon as he is appointed. It is well known that resources are not always easy to obtain, particularly if they are of various kinds, and if financial resources, which are always scarce, are involved. The coordinator is therefore responsible for carrying out the activities for the different stages using the guidelines and advice contained in this manual. The activities involved in going through the various stages are expected to correspond to the main stages shown below.

– Stage 1: Organization of the work. A list should be drawn up of all the elements needed to carry out the work, in accordance with the decisions taken in advance by the authorities.

– Stage 2: Preparation of information and working tools. With the assistance of staff familiar with postal activities from within the regulatory body and designated operator (support groups), the working party gathers together all the available information concerning the range of services, the market and service costs.

– Stage 3: Definition of scenarios and simulations. Hypothetical situations relating to service provision are defined according to the main geographical, demographic, operational and service cost variables, in order to obtain different possible results, and thus find the most appropriate solution.

– Stage 4: Formulation of the UPS proposal. Based on the analysis and findings of the previous stage, the most suitable service model for the country is defined. This forms the foundation of the UPS proposal, which is set out in a document explaining and supporting it.

When organizing and coordinating the work, it is very important to bear in mind that before the activities making up the four-stage implementation process can begin, the authorities of the regulator and the designated operator have to hold a series of discussions or meetings, in which it is decided that this work should go ahead.

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Furthermore, given the repercussions of the results of this work and the technical and financial efforts involved, the interest and support of senior officials in the ministry responsible for the sector are needed. Their backing must be obtained for this first step in the sectoral reform contained in the IPDP, for which government backing is essential. If, while this task is being carried out, the participation of international bodies is sought, it should be borne in mind that these preliminary talks and meetings will take longer, and that arrangements to formalize agree-ments will have to be made before the activities set out in stage one can begin. To help the coordinator and his team, Annex 1.7 contains as a guide a task list of the most important activi-ties to be carried out in stage one. This list can be used as a basis for planning activities, and also as a checklist for monitoring the development of the organizational and coordination work. This is not an exhaustive list, which means that every event and circumstance likely to arise may not be covered. Activities can therefore be added or excluded, according to circumstances and needs. The next section sets out in greater detail the main duties the coordinator has to carry out to ensure that proper preparations are made for the start and due progress of the work. These responsibilities include resources, time management, induction and training, preparing data, physical and logistical arrangements for meetings, timetable planning, etc. 1 Resources and time available for carrying out the work 1.1 Human resources. The coordinator should provide the members of the working party and the support groups with:

– information on the nature and specifications of the work;

– an explanation of individual and collective obligations;

– an explanation of the objectives, planned deadlines and work involved in the different stages of the process of developing the UPS proposal;

– research and consultation documents (prior to the start of the work);

– information about the training to be given; and

– details of the physical and logistical arrangements for the meetings to be held at the various stages of the work.

The coordinator should make the necessary arrangements to provide all those involved in the work with the information, research and consultation documents, details of training and other necessary items at the meetings scheduled for the first and subsequent stages. Documents available in digital format should be distributed electronically. The coordinator should ensure from the outset that there is a good working atmosphere within the team and in the support groups. This is essential to promote effective group work and mutual understanding, so that each individual can make a full contribution. It is also very important for all participants to be motivated to fulfil their commitments, both before the work begins and during its execution. The attendance of postal authorities at scheduled meetings plays an important part in ensuring this motivation. It is also advisable to maintain group cohesion and discipline by keeping strictly to the timetables and schedules set for the different stages. As can be seen in the annexes, particular attention should be paid to the detailed timetables to ensure that schedules are strictly adhered to. Otherwise, it will be very difficult to complete the work and cover all the planned topics within the time allocated. Monitoring timings and the progress of the work is a difficult task for the coordinator, so it is important to bear in mind at all times the objective of obtaining results within the allocated time. Team members should also be aware that missing a meeting will have a detrimental effect on the progress of the work.

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1.2 Physical resources

This refers to all aspects of the installations, equipment, materials and supplies required for the smooth progress of the tasks involved in the operational process. Installations A room is required in a well-located building which is easily accessible to the participants. The room and the building must offer adequate accommodation for a large group of people working for long periods every day. The size of the meeting room, the lighting, temperature, privacy and security must all be taken into account when selecting the location. Given that a group of between 10 and 15 people will be meeting in the room every day, adequate space, lighting and ventilation are essential to ensure the necessary level of comfort. The importance of having suitable washroom facilities situated close to the meeting room should also be borne in mind. The furniture in the room should enable workstations to be set up during meetings, and be arranged in a horseshoe or circle, suitable for screen presentations and round-table discussions and exchanges. As the team will be carrying out activities using laptops and working materials, there needs to be sufficient space at the individual workstations. Equipment and materials For the work of the secretariat, the meeting room should be permanently equipped with at least one computer (PC or laptop) and printer, a projector (video or beam) for connection to a computer, a projector screen or a wall that can be used for the purpose, photocopying facilities (preferably a photocopier), a whiteboard with markers and an eraser, a flipchart and pens, and side tables for stationery and reference documents. Annex 1.8 contains a table for guidance showing the layout of the meeting facilities and the equipment and materials required. Additional points In accordance with the economic situation and customs of the country, the provision of refreshments, for example coffee, etc., is recommended during meeting breaks. Timetables should include daily breaks, in the morning at 10.30 and in the afternoon at 16.00. If the budget allows it, the provision of lunch is recommended, in order to keep the group together as much as possible. 1.3 Financial resources

In order to keep the financial resources needed for carrying out the work to a minimum, it has been established that a budget of between 8,000 and 10,000 USD should be sufficient to meets all needs. Most of this sum (6,000 to 8,000 USD) will be earmarked for market research and other field work. These costs are considered unavoidable if the country has not carried out a market study or if there are large gaps in the information available. The market information available is generally the data contained in the postal market evaluation exercise carried out as part of the IPDP. However, as the plan document points out, this does not replace the need for more complete information, preferably in the form of a market study, as it provides only basic quantitative data on basic correspondence. There is no detailed information on the parcels and Express services, and there are few reliable sources of data on which to base estimates. In the case of the methodology used for preparing the UPS proposal, working with an "acceptable minimum of information", attempts are made to obtain at least some basic qualitative data on services in the market, and more reliable quantitative data on the parcels and Express services. This is done by means of simple, small-sample surveys, which take little time to complete. It is estimated that with the amount set, the minimum necessary can be obtained. The other costs envisaged will be low, assuming that the physical and logistical arrangements will not involve any expenditure on furniture, equipment and materials in general. It is assumed that all these items can be provided by the main bodies involved, i.e. the regulator and the designated operator.

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However, to allow for the possibility of having to acquire some elements and to cover the cost of items such as refreshments, it is estimated that a budget of 1,000 USD would be sufficient in each case. Annex 1.9 shows in table form a minimum budget model to cover the execution of the work. 2 Working party and support group meetings While the work is being carried out, the working party will need to hold numerous meetings with the support group, mainly during stage two. Some meetings will be scheduled in the timetables and activity plans, while others will be called at the team's request to meet unforeseen needs requiring the groups' attention and cooperation. The coordinator is responsible for planning these activities by including them in the timetables and work schedules for the various stages, and providing the necessary coordination. The date, time and expected duration of these meetings must be established, as well as the objectives and any tasks to be carried out. The coordinator has to define mechanisms for liaison and communication between the working party and the support groups. It is also important for the liaison and communication mechanisms for the scheduled activities, the method of calling unscheduled meetings, and the time for responding to requests to be established in advance with the relevant authorities and the support group members' hierarchical superiors. This will avoid a great many setbacks, misunderstandings and administrative problems which could impede the normal progress of the work. 2.1 Working meetings According to needs arising in the course of the work, different kinds of meetings will be organized. Occasional meetings can be held for information sharing, guidance and coordination. Other meetings will be held more frequently. These will deal with the compilation, classification, structuring and consolidation of specialized data from the support groups, and the more specialized research and consultation tasks, carried out internally or with other bodies. A stage-by-stage record can be kept of meetings between the working party and the support groups. Stage 1 At least three meetings: – Before the training workshop: A meeting to explain the conditions for attending the workshop, and

distribute the detailed timetable and study materials. Instructions will also be given concerning the need to compile the available information needed at the workshop in an organized form.

– During the training workshop: The working party and support groups will meet during the week-long training session to carry out the workshop activities. They will have the opportunity for full discussions on the information needed for the work, and the way in which the required level can be attained.

– After the training workshop: Immediately after the workshop, a meeting will be held to formally define the support groups' obligations, in accordance with the meetings set out in the detailed programme for the second stage.

Stage 2

In the first week, the working team will need to hold two or three meetings with the support groups to follow up on commitments and to check that the gathering of information is progressing well.

These meetings can last between one and two hours each, and will be included in the detailed schedule of activities. If necessary, the team members can also call unscheduled meetings with the support group responsible for the topic in question.

As the activities during this stage are carried out in subgroups, each of which is responsible for a given area (provision of services, market and costs), meetings with the support group will be held separately, according to the specialized area concerned.

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Stage 3 The working team will still need to work with the support groups at this stage, although to a lesser degree, and may need to supplement information in certain areas. The procedure for these meetings will be the same as in Stage 2. Stage 4 By this time there will be less need for assistance from the support groups, and meetings will be called, through the coordinator, only at the team's request. 2.2 Organizing the allocation of the work In order for the work of the second and third stages to progress as quickly as possible, the working team and the support groups should divide the tasks into three main areas: provision of services; postal market; and service costs. Organization of the working party Given that the team has at least seven members taken from ministries, the regulatory body and the operator, the coordinator should organize three subgroups, each having a minimum of two members. Care should be taken to ensure that the members of these subgroups are those with the best knowledge and skills in the assigned area (provision of services, postal market, service costs). One person from the ministries and one from the regulator or operator can be assigned to each subgroup. In addition, each subgroup will include a person responsible for liaising with the coordinator and the relevant support group. The composition of the subgroups will present fewer problems if the team is made up of more than seven people. By splitting the team into three subgroups, the tasks and activities in the second stage can conveniently be carried out at the same time, making it easier to deal with the three areas (provision of services, postal market and service costs). The working party can adopt the same procedure for defining the scenarios and simulations in stage three, assigning one subgroup to carry out the analysis and calculations for each of the three scenarios. In this third stage, all members of the working party should participate in the initial work of preparing the scenarios, and that of the final conclusions and the choice of the most appropriate scenario at the end. Organization of the support groups Each of the three support groups has particular responsibility for one of the areas of the team's work in the second and third stage.

– The support group specializing in operations will deal with the provision of services, i.e. data concerning all aspects of the operations process, as reflected in the conditions of service provision.

• Categories of services.

• Access network for sending or posting mail.

• Access network for receiving mail.

• Sorting centres.

• Operational structure of the postal network.

• National and international transport network.

• Other operational aspects.

– The support group responsible for marketing deals with the marketing and sales of services and information on the country's postal market relating to services provided by the designated operator and services offered by other operators in the postal market.

The information in question should be quantitative and qualitative data relating to supply and demand in the country's postal market. The group needs to collect data on the market and the designated

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operator's share of the various categories of service: domestic, international, business and personal. It is particularly important to collect data on both domestic and international basic letter and parcels services.

Information is also needed on service tariffs applied by the designated operator and other market operators, marketing practices, services for businesses and big customers, and self-service features.

– The support group responsible for financial and administrative aspects focuses on service costs and all data connected with this area, and on postal management.

Depending on the operating structure of the services provided, information is required on total and disaggregated costs broken down by service category, category of operation (acceptance, sorting, transport and delivery), and geographical area (local or urban, national and international mail). Separate data should be provided on basic service costs (letters and parcels) and the other, non-basic, services (registered, Express mail, etc.).

The coordinator should agree formally with the regulator and the operator on the method of working with the support groups. Once commitments have been agreed on with the body's authorities, a decision is taken with the support group members' line managers as to the form the collaboration will take, and the activities for which the group will be responsible. The designation of the person responsible for liaison within the group can also be agreed with the line managers of the support group members. The person designated as support group liaison will be responsible for coordinating internally in the specialized area concerned, obtaining and delivering data, and conducting research and data analysis, both for work carried out within the group, and for work in other areas and by other bodies that might be asked to participate. 3 Training the working party and support groups 3.1 Content of the training Participants will be trained to carry out the work by attending an interactive workshop. They should study in advance the documents relating to the topics to be addressed during the sessions, and participate in practical exercises dealing with the key areas involved in preparing an appropriate UPS for the country. The training workshop conducted at the end of the first stage of the work is designed to give participants the best possible preparation for contributing effectively to the successful development of the most appropriate UPS for the country. Participants should discuss the following topics:

– Key concepts and principles of the postal services, the UPS, and sectoral reform in developing countries.

– The situation of the postal sector at regional level and worldwide, and trends in sectoral development in relation to society at present and in the future.

– The postal sector's situation in the country, its level of development and the contribution it makes to national growth and development; the sector's contribution to the achievement of the country's eight millennium objectives.

– The conditions existing in the country's basic postal services; services and access to facilities for sending postal items and facilities for home delivery of items; quality of service and pricing.

– Background to the work on preparing the UPS proposal for the country; reasons for defining the UPS as the initial and principal action considered in the reform plan.

– The methodology contained in each section of the "Guide to preparing a UPS proposal": Organization of the work; Preparation of the information and tools; Definition of scenarios and simulations; and Preparing the UPS proposal and support.

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3.2 Carrying out the activity The training workshop activity will be conducted within the established parameters for training methodologies used in the UPU (TRAINPOST). It can therefore be carried out directly by the person responsible for leading, organizing and coordinating the work on preparing the UPS proposal. If the country wishes, it may also obtain the cooperation of the international postal bodies in order to include this activity in the country's actions within the framework of a regional project. In this case, the country needs to show that it has sufficient participation and include the workshop in its programme of sectoral reform. Requirements The requirements for implementing this activity are as follows:

– Facilitator – The facilitator must have expert knowledge of postal reform matters and plans, and will be responsible for presenting the questions to be addressed, and leading discussions and practical exercises.

– Coordinator – The coordinator will be a member of the working party responsible for organizing the activities and the attendance of the participants (working party and support group) according to a detailed timetable of activities that has been approved in advance.

– Physical and logistical arrangements – These comprise the location, equipment, materials, secretariat and other arrangements necessary to implement the activities in the other stages of the work, as indicated in Annex 1.8.

Duration and organization of the workshop The minimum period required for this event is five working days, from 8.30 to 18.00, with half-hour breaks in the morning and afternoon, and a lunch break of one and a half hours, making the total length of the working sessions thirty-one hours. Annex 1.10 contains a general outline of the training workshop, showing the topics for discussion and exercises and the time allotted to each session. Given the scale of the subject matter and the short time available, it is essential to exercise strict discipline, and to have a skilled and conscientious facilitator able to lead the sessions in the time allocated, covering all the topics adequately, and ensuring that the participants assimilate the training programme. As regards methodology, the topics addressed during the training workshop are arranged in three modules, with a final session for evaluating the learning process. The first module, entitled "Bases for sectoral development" is based on the UPU Guide to postal reform, which contains all the principles and concepts applying to sectoral development and reform. The second module, "The country's IPDP", contains a general outline of worldwide services, before discussing in detail the current state of the country's services. Module three is entitled "Guide to the UPS proposal". This is the central theme of the workshop, and deals with the methodology for developing a UPS proposal. On completion of the modules, the training event will conclude with an assessment exercise in the form of a question and answer session between groups of participants. It is hoped that by the end of the workshop, participants will be able to contribute effectively to the objective of preparing the proposal with the aid of this guide. To ensure the success of the workshop, the coordinator, in conjunction with the person acting as facilitator, should draw up a detailed timetable of activities so that the work can be closely monitored and supervised on an hour-by-hour basis. Annex 1.1 contains a model of the detailed timetable, which the coordinator can use as a guide, adapting it to local needs.

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In carrying out this activity it is essential for the coordinator to provide the participants with the study materials and exercises well in advance, and to give clear instructions on the importance of reading the documents before attending the sessions. The study documents and practical exercises to be distributed by the coordinator are listed below:

– Guide to postal reform, UPU publication;

– The country's IPDP, UPU publication;

– Guide to the preparation of the UPS proposal, UPU publication;

– Exercise on the current UPS provision, IPDP material;

– Exercise on evaluating the market, IPDP material.

This material should preferably be distributed in digital form. During the workshop, hard copies of these documents should be available for reference in the training room. Before the workshop begins, the coordinator and support group members responsible for liaison should take stock of the up-to-date information available on the services provided by the operator, postal market assessments and the operator's share of the market for each type of service, and service costs. 4 Verification of available information The availability of complete, up-to-date, reliable information is of paramount importance in achieving the objective of drawing up a UPS proposal for the country. The approach adopted must be based first and fore-most on accurate, complete and adequate information which reflects the real situation in terms of the basic postal services offered to the country's population. Consequently, the guide stresses this critical factor repeatedly when dealing with the three main areas of the work and the four stages of the implementation process. Despite the best efforts to obtain the information available, they will undoubtedly be insufficient to collect the amount of data required. It is very costly and difficult to obtain the optimum amount of information and data. It may be possible to do so by means of specialized studies, but for the purposes covered by this guide, it will not be feasible, because of the series of limitations existing in most of the countries of the region. As it may not be possible to obtain even half the amount of information and data required, the best course is to aim for the minimum level needed to provide an accurate and verifiable picture, supported by valid data that has been sufficiently analyzed. Because of this, every effort should be made to obtain, verify, validate and complete the data relating to the provision of services, the market and the current pricing, as indicated in this guide's methodology. The regu-lator's and designated operator's staff and the coordinator should be aware of this shortcoming and make a special effort to improve the situation as soon as work begins. This is also the reason why the support groups are participating in the implementation of the work. The information obtained for the work will be put to practical use in the third stage, when the scenarios are developed and simulated cost calculations are carried out. However, the guide's methodology allocates a complete stage to this process in stage two, "Preparing the information". Information gathering begins right from stage one, and is carried out on three specific occasions: before the training workshop begins; while it is in progress; and immediately afterwards. Occasions when the information is checked in stage one a At the meeting between the coordinator and the working party and support groups During this meeting, the study materials for the training workshop and the detailed schedule of activities are distributed. At, or if possible before this meeting, the coordinator should formally request the operator's relevant authorities (management) and the support group to provide full details of the information required concerning service provision, the market and costs.

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b During the workshop sessions On the first and second day of activities, the members of the support group should update and complete the information while discussing, on the basis of the IPDP document, the market and the national situation with regard to services provided by the operator. In the practical exercises relating to the UPS offer and market assessment, participants are expected to make the best possible contributions based on the information available. c Meeting between the coordinator and the working party and support groups, immediately after the

workshop has ended Once the workshop has finished, a meeting should be held to present the timetable and schedule for stage two, and to thoroughly check the information already available or in the process of being obtained. Based on the workshop discussions on the national situation of the sector, as indicated in the IPDP, and the instructions given in the guide to preparing a UPS proposal, this meeting should establish the conditions and specifications of the data requiring completion, and the way in which this task is to be carried out. Undertakings to deliver the missing information, specifying exact dates and persons responsible for delivery and receipt, should also be established at this meeting. 5 Preparation of timetables and schedules Each stage of the work should be accompanied by a timetable of the main activities, drawn up by the coordinator and following a logical sequence of actions, in order to plan the direction the work is to take. Some activities may require more intensive planning and coordination because of their complexity. Given the number of meetings to be held over several days, and the need to adhere to a fixed sequence of activities and methodology, a detailed schedule of activities should be drawn up, day by day and hour by hour, and a person designated to be responsible for each element of the programme. The training workshop, for example, requires a great deal of organization. This is the activity scheduled for day 22 of the general timetable for stage one. Stage one Given the diversity of actions and activities, the organization of this stage requires:

– A general timetable of activities:

A model is provided in Annex 1.12. The timetable shows the date or number of the day, the activity concerned, the specific tasks to be carried out for each activity and the person responsible for the action.

The timetable for this stage should be based on a list of the most important activities to be carried out.

Annex 1.7 provides as an example a list that can be used as a guide to the most important activities in stage one, and can be adapted to the country's needs.

– A detailed schedule for the training workshop. As this activity is a five-day event with numerous meet-ing sessions, during which a great many topics will be addressed, a very detailed schedule needs to be drawn up in order to achieve the desired results. Annex 1.10, mentioned above, provides a model detailed workshop schedule to be used for each country.

Stage two In this stage, only the detailed schedule of activities is required. The team is divided into three subgroups, each one specializing in one of the following areas: service provi-sion; postal market; and costs. The subgroups work simultaneously on the different topics during the period set for completion of this stage (two to four weeks).

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The team's subgroup meets with the support groups to plan a schedule of joint meetings between all the members of the working party and one or more of the support groups. The schedule should also include details of the meetings for the entire working party to study the data obtained and review the working meet-ings of the various subgroups. Stage three The process is the same as in the previous stage. A detailed schedule of activities is drawn up. In this stage, the team also works in three subgroups, with the assistance of the support groups, and meetings are arranged as in stage two. In the third stage, the schedule should include at least two meetings with the staff of the regulator and the operator to discuss the results of the simulations and the conclusions reached as to the most suitable situa-tion model to present for the proposal. The purpose of the first meeting is to present the results and conclusions and for observations and com-ments concerning adjustments to be made. The second is to discuss the way in which these changes or adjustments will be carried out. Stage four The requirements for this stage, in which the work is finalized, are as follows:

– A timetable of activities: Once the team has completed its work and prepared the proposal document, a final version of the document is printed. It is then presented and delivered to the senior ministerial authorities, and the ministry prepares an administrative document adopting the UPS on behalf of the government on the basis of the validated results of the work. The document can be presented in one or more instalments, as appropriate.

– Detailed schedule of activities: During this stage, the team holds daily working meetings over three to four weeks. The working day is from 8.30 to 18.00.

Because of the lengthy period of activities and working meetings, the schedule plays a crucial part in preparing the proposal document. It should include all the steps to be taken in the short time available, and ensure that the objective of completing the document is achievable. Defining the document's contents and drafting it in a relatively short time, including all the arguments in favour of the proposal, is a difficult task for a group. It calls for a great deal of discipline and organization, and good team leadership on the part of the coordinator is vital during this final effort. 6 Establishment of monitoring and follow-up mechanisms The execution of the work will take between two and three months (eight to 12 weeks). Progress therefore needs to be monitored and partial results followed up on an ongoing basis. The staff of the regulator and operator should be informed about the way in which the work is to be carried out, and the method by which they will be kept up to date with progress and results. Two mechanisms are recommended for simplifying the monitoring process: a general four-stage timetable showing the main activities and implementation times in weeks (a simple Gantt chart can be used for this purpose); and a meeting between the coordinator and the authorities at the end of each stage. At these meetings, the coordinator should submit a document showing the progress in the timetable, a document explaining the implementation of the activities and the results obtained and finally, if necessary, a document requesting changes or adjustments to the organization originally planned.

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The staff of the regulator and the operator will have four opportunities to meet with the team:

– At the opening and closing of the training workshop.

– At the beginning of stage two, when the team officially begins its work.

– At the end of stage three, to review and approve the situation model chosen as the most appropriate for the UPS proposal.

– At the end of stage four, to review and approve the proposal document to be presented to senior gov-ernment authorities.

Annex 1.13 contains a simple model of a Gantt table or chart which the countries can use to produce a gen-eral timetable of work.

Annexes

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Annex 1.1 Invitation to participate in the work on formulating the UPS proposal Issued by: The supervisory ministry for the postal services Addressed to:

– The ministry responsible for planning and the treasury1

– The ministry for the economy

– The postal services regulator

– The designated operator

– The department for postal reform Dear Sir/Madam, As you are aware, a few months ago an interinstitutional working party set up under the auspices of the Universal Postal Union (UPU) formulated an integrated postal reform and development plan (IPDP) for your country. Officials from your ministry participated actively in the group's work on formulating the plan, thus enabling the timely achievement of the objectives. Before any government decisions are taken concerning the implementation of the actions approved in this plan, a universal service proposal (USP) tailored to the country's situation needs to be prepared. We are therefore calling on your invaluable cooperation once again, and asking you to participate in this work by designating a technical expert with the necessary seniority to represent your ministry to join the working group responsible for formulating the proposals. The results of this work will be of major importance, since it involves developing a framework for a viable, state-guaranteed basic postal service that is operationally and financially sustainable, and accessible to all citizens. The services offered must be affordable to all and of satisfactory quality. The government decisions concerning the proposal should be adopted jointly by the ministries concerned. Needless to say, your representative's presence within the interinstitutional working team is essential, as the points of view and approaches of the various participating bodies will ensure that the objective is achieved. The implementation of the work is expected to take a minimum of eight weeks. During this time, the team members will need to devote themselves exclusively to this work, on a full-time basis. The attached sheet provides more detailed information on the way the work will proceed. (Attach a brief outline of the work including the title, objective and expected outcome; the organization of the working party and support groups; time frame for implementation and dates; stages of the work and team's activities; profile of the representative). You are therefore requested to provide me with the name and title of the technical official who will be representing your ministry in the working group. Yours sincerely, (Supervisory ministry for the postal services)

1 As the names of government ministries and secretariats vary from one country to another, these are provided for illustrative purposes only.

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Annex 1.2 Profile of the coordinator of the work on formulating the UPS proposal

Role Coordinator of the work on the UPS proposal

Line manager Supervisory minister responsible for the postal services, or person designated to carry out this role.

This role can be undertaken by an official of the regulatory authority or designated operator (chairman, director or manager) or another state body.

Incumbent's mission To coordinate an interinstitutional, multidisciplinary working party set up to define a universal postal service proposal for the country.

Activities Directing activities that will result in the production of a UPS proposal for the country. To this end:

a carry out all the activities and steps indicated in the methodology contained in the guide to preparing the proposal;

b ensure the availability of all the resources and elements necessary for carrying out the work;

c hold meetings with the various bodies involved, to ensure their full participation;

d hold the necessary coordination meetings with the regulator and the designated operator;

e arrange for the provision of the facilities, equipment and staff needed to carry out the work;

f ensure the cohesion of the members of the working party.

Internal relations With all working party members.

External relations With the authorities of the bodies involved.

Qualifications Professional training.

Requirements Presentation of the official documentation required by the institution.

Skills Strong sense of responsibility, necessary aptitude to carry out the role and ability to maintain good personal relations.

Experience Senior position within the regulatory body or designated operator, or other state body. Postal sector experience preferred.

Working conditions Ability to work well under pressure.

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Annex 1.3 Designation of the coordinator of the work on formulating the UPS proposal Issued by: The supervisory ministry for the postal services Addressed to:

– The ministry responsible for planning and the treasury2


– The regulatory body for the postal services

– The designated operator

– The directorate responsible for postal reform

– Departments of the supervisory ministry for the postal services Dear Sir/Madam With regard to the formation of the interinstitutional working team responsible for preparing a universal postal service proposal, I have pleasure in informing you that Mr (Ms) XXXXXX, (function), has been designated as team coordinator. You are therefore requested to kindly provide him/her with your support in this role. Yours faithfully, (Supervisory ministry for the postal services)

2 As the names of government ministries and secretariats vary from one country to another, these are provided for illustrative purposes only.

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Annex 1.4 Profile of the working party members from the various participating bodies Supervisory ministry – Level of academic training: Professional

– Employment experience: Two to five years' experience in the ministry or with a public body; knowledge of postal sector standards (communications)

Ministry responsible for the economy, finance and the treasury – Level of academic training: Professional, preferably in economic, administrative or industrial

disciplines.

– Employment experience: Two to five years' experience in the ministry or with a public body; knowledge of standards and procedures relating to the infrastructure and public investment, national budget resources and public credit.

Ministry of planning – Level of academic training: Professional, preferably in the areas of economics, infrastructure

development and investment.

– Employment experience: Two to five years' experience in the ministry or with a public body; knowledge of short, medium and long-term national plans, and approaches to infrastructure development and investment.

Regulator – Level of academic training: Professional; preferably in the fields of law and public administration.

– Employment experience: Two to five years' experience in the postal sector; familiarity with sectoral standards (communications and postal services), the level of service development, the market and the competition.

Designated operator – Level of academic training: Professional, in the following disciplines: engineering, economics,

logistics, information sciences, administration, and commerce and marketing.

– Employment experience: Two to three years' experience in postal business disciplines and the designated operator's service operations; knowledge of the postal business, in the areas of service operations, marketing and sales, postal technology and IT; marketing and sales; finance and administration.

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Annex 1.5 Record of the constitutive meeting of the working party responsible for defining the universal postal service Issued by: The coordinator of the work on defining the universal postal service Addressed to:

– The members of the working party

– The regulator

– The designated operator Record of the constitutive meeting of the working party responsible for defining the universal postal service, At xxxx on the xx of xxxxx, xxx, at (meeting venue), located in xxx, representatives of the following institutions met to formulate a universal postal service proposal:

– The ministry responsible for planning and the treasury

• Mr/Ms NN, (role) and

• Mr/Ms NN, (role)




– Regulatory body for the postal services



– Designated postal operator



– Directorate of postal reform,


• Mr/Ms NN, (role) Mr /Ms NN has been designated as working party coordinator. All the members are aware of the duration of the work, which will not exceed three weeks, and agree to participate in it on a full-time basis. They also agree that each member of the team will be assigned objectives and obligations, which it is vital to meet in order to achieve the goals set. (Signed by each team member)

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Annex 1.6 Designation of the support groups At the request of the coordinator of the working party responsible for preparing the country's UPS proposal, the Chairman/Director General/General Manager of (name of body), has decided to form three support groups for the work carried out by the national government. The groups are made up as follows:

Support group for service operations A; B; C;...….Z. Marketing support group A; B; C;...….Z. Financial and administrative support group A; B; C;.......Z. The following persons are designated to act as intermediaries between the support groups and (name of body):

– Mr/Ms XX – support group for services and operations

– Mr/Ms XX – marketing support group

– Mr/Ms XX – finance and administration support group On behalf of the working party, the following persons will be responsible for working relations in the corresponding areas:

– Mr/Ms XX – operations and services area

– Mr/Ms XX – marketing

– Mr/Ms XX – finance and administration The working team coordinator will agree with the liaison officers in (name of body), and those responsible for the relevant area in the working team, on the tasks to be carried out and the commitments in terms of deadlines for delivering results. Chairman, Director General, General Manager Body……

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Annex 1.7 Checklist of the most important activities to be carried out in stage one Organization of the work

1 Letter from the minister inviting other government bodies to participate

1.1 Prepare a draft letter to each of the invited bodies, to be signed by the minister.

1.2 Prepare an annex containing details of the work (objective, organization, deadlines), personal profiles, undertakings and time needed to carry out the work.

1.3 Send out letters to the bodies concerned.

2 Follow-up of the invitations sent to the various bodies.

2.1 Visits and calls to bodies to obtain prompt replies.

3 Obtaining acceptances 3.1 Obtain information or a copy of the reply.

4 Letter from the minister designating the working party members

4.1 Prepare a draft letter to the various bodies, informing them of the composition of the working party, and the objectives and undertakings (with a copy to the designated team members).

4.2 Prepare an annex to the letter containing a general timetable of activities and any other information.

5 Letter informing the regulator and designated operator of the composition of the support groups

5.1 Prepare a draft letter from the regulator to the managers concerned.

5.2 Prepare an annex setting out the responsibilities and obligations. Work objectives. Organization. Time needed to carry out the work. General timetable of activities.

6 Preparation of the general timetable of activities

6.1 Discuss approval with the regulator and designated operator.

7 Preparation of stage one timetable. Organization

7.1 Discuss approval with the regulator and designated operator.

8 Preparation of detailed schedule for the training workshop

8.1 Discuss with regulator two weeks before workshop begins; consult with designated operator.

9 Preparation of timetable of activities and detailed schedule of tasks for stages two and three

9.1 Discuss with the team and support groups before finalizing the workshop.

10 Preparation of timetable of activities and detailed schedule of tasks for stage four

10.1 Discuss with team before finalizing stage two.

11 Preparation of schedule of meetings with minister and authorities (regulator/designated operator)

11.1 Discuss with authorities and obtain approval.

12 Prepare a timetable of working group meetings in stages two and three

12.1 At the end of the workshop, discuss the timetable and detailed schedule with the team and the support groups.

13 Preparation of the budget for the work

13.1 Define the items of expenditure and establish the costs.

13.2 Obtain information on budget availability.

13.3 Prepare the draft budget for approval.

38

14 Raising of resources for carrying out the work

14.1 Obtain approval.

14.2 Prepare the administrative documents and carry out the necessary formalities.

15 Organize the training workshop 15.1 Obtain approval for the location, room, equipment, materials, secretariat and other facilities, two weeks in advance.

15.2 Ensure that the room and facilities are ready, two days in advance.

15.3 Confirm the invitation to the workshop to all participants (12 to 20 people), one week in advance.

16 Organize the implementation of stages two and three

16.1 Confirm the timetable of activities and detailed schedule, one week in advance.

16.2 Obtain approval for the meeting room, equipment, materials, secretariat and other facilities, two weeks in advance.

16.3 Check that the room is ready one or two days in advance. The meetings in stages two and three are not regular.

17 Organize the implementation of stage four

17.1 Obtain approval for the location, room, equipment, materials, secretariat and other facilities, two weeks in advance. There are regular meetings in this stage over three or four weeks.

39

Annex 1.8 Physical and logistical requirements for the working meetings Location The venue chosen should be in a convenient, easily accessible location, with facilities

that are inexpensive (preferably free of charge). Rooms should be comfortable and adequate in terms of space and furniture.

Meeting room The meeting room should be private and in a quiet location. It should be big enough to accommodate 10 to 15 people or more. A minimum area of sixty square metres is recommended, enabling work stations to be arranged in a "U" or "O" formation, suitable for viewing projections onto a screen or wall. Air conditioning should be provided if temperatures are either very high or very low.

Equipment The following equipment should be available:

– One PC with printer and Internet connection

– One video/beam projector for connection to the computer

– One photocopier (if possible)

– Two or three extension leads

– One whiteboard with markers and eraser

– One flipchart with markers

– Two large side tables for reference materials

– One set of furniture for the secretariat

Materials Minimum requirements:

– Six reams of white paper and 100 sheets for the flipchart

– Pencils; six whiteboard markers; six standard markers

– Postal reference documents:

• Guide to postal reform

• Three or four copies of the country's IPDP

• Four or five copies of the Guide to the preparation of the UPS proposal

Secretariat This should comprise:

– One secretary

– One telephone

– furniture for the secretary

Other facilities For meetings held during the training workshop (one five-day week, from 8.30 to 18.00, Monday to Friday) and during stages 2 to 4 (between 8 and 12 weeks, from 8.30 to 18.00, Monday to Friday), coffee and refreshments should be provided at 10.30 and 16.00.

If the budget is sufficient, it is recommended to provide lunch, so that the group does not have to disperse at midday.

40

Annex 1.9 Model of minimum budget for carrying out the work Model for estimating the budget

Heading Estimated cost (USD)

1 Special services contracted out 8,000

– Postal market research 8,000

2 Purchase of materials

– White paper (6 reams) 90

– Flipchart paper (100 sheets A1) 50

– Printer ink (2 cartridges) 100

– Markers (6 for the whiteboard and 6 standard markers) 60

Total 300

3 Payment for services

– Photocopies (approx. 1,000 copies) 100

– Printing and binding the final proposal document (20 copies) 400

Total 500

4 Coffee and refreshments (100 days for 10 people) 1,000 1,000

5 Sundries 200 200

Total 10,000

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Annex 1.10 General outline of the training workshop

Reference document Topics for discussion Time

1 Guide to postal reform 3 hours (½ day)

– The Guide as a reference tool

– Initial discussion of the UPS concept

– Scope of postal reform

– Stakeholders in the sector

– Financing the UPS and the reform process

½ h

1 h

½ h

½ h

½ h

a The country's IPDP 9 hours (1½ days)

– The postal sector

– The situation of the national postal sector

• Services (offer)

• Market

• Operator

• Regulation

– Action plan for reform

• Areas of reform

• Defining the UPS – actions

• Other areas – actions

– Service offer exercise

– Postal market exercise

½ h

2 h

2½ h

1 h

3 h

b Guide to the UPS proposal

16 hours (2½ days)

– The reference document and guide

– Organization of the work

– Preparation of information and tools

• Service offer

• Postal market

• Service costs

– Definition of scenarios

• Analysis of information

• Discussion of possible scenarios

• Definition of scenarios

– Simulations

• Determination of values

• Calculations

• Analysis and conclusions

• Discussion of results and decisions

– Formulation of the UPS proposal

• Definition of the contents of the document

• Formulation of the document

• Presenting and supporting the document

½ h

½ h

7½ h

2 h

2½ h

3 h

c Training assessment 2½ hours (½ day)

– Guide to reform and the IPDP

– Guide to the UPS proposal

1 h

1½ h

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Annex 1.11

Detailed timetable for the training workshop Day/date/month Time Activities Responsibility

Monday 08.30 Opening of the training workshop Authorities

09.00 Break

Module one: Bases for sectoral development

09.30 Explanation of the Guide to postal reform – structure and contents. Reference document

Facilitator

10.00 First discussion of the UPS concept. Legal basis of legislation applying to the UPS. The UPU and the UPS. Definition and evaluation

Facilitator

10.30 Scope of postal reform. Areas of reform. The market and its future prospects

Facilitator

11.00 Break

11.30 Stakeholders in the sector. Key players. Instigators of reform Facilitator

12.00 Financing the UPS. Models in industrialized countries. Reform in developing countries

Facilitator

12.30 Lunch break

Module two: The country's IPDP

14.30 General information on the postal sector worldwide. Development and trends

Facilitator

15.00 National situation. Postal services in the country. Services offered. Postal indicators

Operations support group

15.30 National situation. The postal market. Estimated size and features. Indicators

Marketing support group

16.00 Break

16.30 National situation. The designated operator. Development. Market share. Challenges. Conclusions

Marketing support group

17.00 National situation. Regulation. The regulator and the application of standards in the sector.

Support group

17.30 Action plan for sectoral reform – the IPDP and areas of sectoral reform

Coordinator

18.00 Distribution of material for exercises on day two Coordinator

End of day one activities

Tuesday 08.30 IPDP. Defining the UPS. Planned actions. Scope and specifications of actions. Implementation and costs

Support group

09.30 IPDP. Other areas of reform. Actions. Costs and financing provided for in the plan

Support group

10.30 Break

11.00 IPDP exercise. Conditions of current offer of basic services (UPS) in the country. General

Facilitator

12.30 Lunch break

43

Day/date/month Time Activities Responsibility

14.00 IPDP exercise. Estimate of postal market in the country. Quantitative characteristics

Facilitator

15.30 Break

16.00 Continuation of IPDP exercise. Estimate of postal market in the country. Quantitative characteristics

Facilitator

18.00 Distribution of material for exercises on day three Coordinator

End of day two activities

Module three: Guide to the UPS proposal

Wednesday 08.30 The Guide. Structure and content. Information, guidance and reference document

Facilitator

09.00 Organization of the work. Formalization and coordination procedures

Facilitator

09.30 Preparation of the information and tools for establishing the conditions of the current service offer. Exercise

Facilitator

10.30 Break

11.00 Preparation of the information and tools for establishing the conditions of the current service offer (cont.)

Facilitator

11.30 Preparation of the information and tools for assessing the market. Quantitative and qualitative characteristics. Exercise

Facilitator

12.30 Lunch break

14.00 Preparation of the information and tools for assessing the market (cont.)

Facilitator

16.00 Break

16.30 Preparation of the information and tools for assessing the market (cont.)

Facilitator

17.00 Preparation of information and tools for calculating service costs (cont.)

Facilitator

End of day three activities

Thursday 08.30 Preparation of information and tools for calculating service costs (cont.)

Facilitator

10.30 Break

11.00 Definition of scenarios. Analysis of information available Facilitator

11.30 Definition of scenarios. Discussion of possible scenarios that could be used for simulations

Facilitator

12.30 Lunch break

14.00 Definition of scenarios. Final decision as to scenarios to be used for simulations

Facilitator

14.30 Simulations. Allocation of variable values to the different scenarios

Facilitator

15.00 Simulations. Calculation of costs for the different scenarios Facilitator

16.00 Break

44

Day/date/month Time Activities Responsibility

16.30 Simulations. Analysis and conclusions concerning the cost results obtained in the simulations

Facilitator

17.30 Simulations. Discussion of results with the authorities. Final decisions and adjustments

Facilitator

End of day four activities

Friday 08.30 Formulation of the UPS proposal. Definition of the contents of the proposal document

Facilitator

09.30 Formulation of the UPS proposal. Formulation of the proposal document

Facilitator

10.30 Break

11.00 Formulation of the UPS proposal. Formulation of the proposal document (cont.)

Facilitator

11.30 Formulation of the UPS proposal. Presenting and supporting the proposal

Facilitator

12.30 Lunch break

Group testing of workshop participants

14.00 Test on Guide to reform and the IPDP Facilitator

15.00 Test on Guide to formulating the UPS proposal Facilitator

16.30 Break

17.00 Close of training workshop

End of day five activities and conclusion of the workshop

45

Annex 1.12 General schedule of activities in stage one – Organization of the work

Day Activities Specific actions Responsibility

Preliminary informal meetings with postal authorities

Discussion on reform and the UPS and requirements of the work

Director(s), regulator and/or designated operator

Preparation of general work plan

– Content of the work. Objectives and expected results

– Budget. Organization. Time frame. Dates. Participating bodies

Director(s), regulator and/or designated operator, with coordinator (to be confirmed)

Informal meeting with minister or request for formal interview

Consultation based on general information concerning the work


1 Meeting to present the work programme to the minister

– General presentation of content and objectives. Budget. Organization. Time frame. Dates. Prospective participating bodies

– Designation of coordinator

– Draft letters of invitation to prospective participating bodies (with annexes)

– Draft letter designating the coordinator


2 Preparation of final version of work programme

Finalized programme. Participation of regulator and designated operator obtained

Coordinator

3 Signature of minister's letter of invitation to bodies

Signature of letter designating the coordinator

– Letters delivered to bodies.

– Information to regulator and designated operator

Coordinator

Coordinator

4 Preparation of timetables and schedules

Consultations with the regulator and the designated operator

Coordinator

5 Selection procedure for team members

Arrangements with the regulator and the designated operator to apply the profiles in the working party and support groups

Coordinator

8 Start of work on physical and logistical arrangements and budget procedures

Begin following up invitations

– Securing of location, room, equipment, secretariat, materials, etc., needed to carry out the work

– Preparation and sending of request notes

– Cash and budget approval formalities

– Carry out urgent reminder visits and calls to obtain replies

Coordinator

46

Day Activities Specific actions Responsibility

10 Follow-up of administrative procedures

Obtain approval for requests and budgets Coordinator

12 Coordination meeting with authorities – regulator and designated operator

– Support from authorities to obtain replies to invitation to participate in the work

– Support from authorities in expediting budget formalities and physical and logistical arrangements

– Confirmation of selection of working group members

– Confirmation and designation of support group members

Coordinator

15 Letter to support group members

Receipt of reply to invitation and designation of representatives

Signature of letter from minister and designation of working party

– Delivery of letter of designation to support groups. Inclusion of annex giving details of work schedules and timetables

– Preparation of formal letter from the minister designating the members of the working party

– Delivery of letters to participating bodies and working party members

Coordinator

18 Confirmation that administrative and budgetary formalities have been carried out Meeting with working party and support groups Invitation to the regulatory authority and designated operator to set up the workshop

– Availability of required budgets and physical and logistical arrangements for meetings

– Checking of location, room, equipment, materials and secretariat for the training workshop

– Distribution of study materials for the workshop. Distribution of schedule and explanation of the conditions for implementing and participating in the activity

– Instructions to group members to begin compiling information on their particular area

– Distribution of invitation requesting punctuality, to avoid disrupting the schedule

Coordinator

22 Setting up and start of the training workshop

Implementation of the schedule Coordinator

26 Closure of training workshop Arrangements for the start of stage two. Preparation of information and working tools

Coordinator

47

Annex 1.13 Model of general schedule of work General schedule for carrying out the work

Weeks

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1 Stage 1 – Organization

1.1 Meetings to set up the work

1.2 Coordination meetings

1.3 Training workshop

2 Stage 2 – Preparation of data and working tools

2.1 Definition of final data

2.2 Areas to be addressed. Services, market and costs

3 Stage 3 – Definition of scenarios and simulations

3.1 Definition of scenarios

3.2 Simulations & conclusions

4 Stage 4 – Formulation of the proposal

4.1 Definition of the contents

4.2 Formulation of the proposal document

4.3 Preparation of presentations

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Stage two – Preparation of the information and analysis of the current situation

49

A. Criteria for preparing the information It is important to point out the reason for devoting a whole period solely to preparing the information and some tools for carrying out the work. The team and their assistants in fact spend around a month (three to five weeks) on this task. Experience has shown that the essential elements for beginning the analysis, discussion and proposal of a viable offer of basic postal services for the country are not, as a rule, immediately available. There is a lack of comprehensive information and data on the current situation as regards services offered, current and future needs, and the level of services which the state can undertake to guarantee on a permanent basis without, in principle, affecting public finances. The reality is that there is no valid, properly documented information concerning postal service provision in the national territories. There are no performance indicators or standards, and no systematic measurement of the quality of delivery times, efficiency of operations (business and private customer satisfaction) and other measurable factors. Similarly, no market studies have been conducted to ascertain the demand for services and the extent to which needs are met, or the offer proposed by market operators, or to obtain quantitative and qualitative data on the postal operations market. Furthermore, there has been no planning for market development in terms of investment, operating methods, products and customer trends in a changing society and environment (information and communication technology – ICT). Finally, there is no economic and financial information available to indicate the economic and accounting performance of the designated operator, in order to provide a picture of the economic performance indicators of the national, regional and local postal network in terms of the processes, tasks, types of postal operations and products concerned. The serious weakness represented by this lack of information can be addressed by applying the method presented in this Guide (stage two of the work). One of the general principles the Guide recommends for the achievement of good results is to apply the practical criterion of obtaining "the minimum amount of informa-tion required" to work with an acceptable degree of certainty when preparing the proposal. In view of the social, economic and political implications of the decisions that have to be taken when defining the UPS, and because these decisions have to be applied legally, a proposal cannot be presented based on the subjective assumptions and views of a group of people meeting for a certain period to discuss the matter. In the light of experience regarding the availability of information in the country, the Guide strongly empha-sizes the need for this fundamental aspect of the work, which is why it is addressed in stages one, two and three of the implementation of the work. The formulation of a successful UPS proposal is dependent on the team's ability to overcome this serious shortcoming. Consequently, the whole of this stage is devoted to ensuring that the "information" element is adequate, reliable, and available at the appropriate time. 1 Structure and quality of data by subject matter 1.1 General points

The purpose of the section is to assist the user of this Guide with regard to the information needed to be able to carry out an adequate analysis of the offer of basic services currently provided in the country.

Because the task of information gathering is so important, sufficient time should be allocated to it.

It is important for all the members of the working party to read this Guide carefully and completely before beginning to collect information. They will then have a complete overview, enabling them to understand why the information is required, and how it will be used. It is essential for the information obtained to be broken down in as much detail as possible. This is necessary in order to establish reliable indicators, thus ensuring that the conclusions reached are valid and accurate. When the data is broken down in this way, accurate information can be obtained at any time (at provincial, regional or national level), simply by adding up the relevant figures.

50

Data characteristics

The coordinator should remind the working party and the support groups that the data used must be broken down, consolidated, structured and updated, and its sources must be clearly identified.

Broken down: The data must be broken down as much as possible. It is important to remember that although it is easy to produce aggregate data, it cannot then be broken down into its component parts.

Consolidated: The working party should use the final data required in such a way that the information can be analyzed immediately. Under no circumstances should the team undertake intermediary tasks relating to the processing of the documentation or operations aimed at obtaining this final data.

Structured: The working party should structure the information according to the levels of aggregation or disaggregation appropriate to the subject matter, as requested, so that the data can be processed in homogeneous blocks. The use of the data presentation formats contained in this manual (see Annex 2.1) is recommended.

Updated: The working party should confirm that it has the latest data available, and indicate the year on which the information is based. It is also preferable to use homogeneous time frames as far as possible (the same years and months), so that analytical comparisons can be made.

Indicating the source: In all the information used, the working party should indicate the source from which it has been obtained. Any tables or graphs containing data should mention the year and source of informa-tion (the bottom left of the table should indicate: Source.......)

1.2 Information required This Guide sets out the information required according to the following categories:

– Political-administrative organization and socio-economic information about the country.

– Postal operator – Services provided and service features, network of post offices, delivery staff, delivery times, mail security, postal processes, tariffs.

– Customer service – Treatment of complaints and inquiries, user information.

– Economic, financial and administrative situation of the designated operator with regard to UPS provision (data on costs, revenue and expenditure).

– Postal market – Volume and value of disaggregated market share of the UPS designated operator and that held by the other operators.

First of all, the coordinator and the working party should agree on the formation of the subgroups and the distribution among them of the data research, organization and analysis tasks. These subgroups will divide the tasks according to the categories of information: service offer, the market and costs. The coordinator will propose making up the research subgroups according to the profiles of the various team members, and their ability to obtain the information required within the time available. Details of the information relating to each category, and the format in which it is to be presented, is given in Annex 2.1. The subgroups are also recommended to make use in their research of the legal and regulatory provisions governing the postal sector in general, and the country's basic services in particular. The coordinator of the working party should then designate one person in each subgroup to be in charge of data-gathering. The person designated will allocate responsibility within the subgroup for obtaining informa-tion and set deadlines for delivering it.

51

1.3 Additional or updated information required Once the deadline set for obtaining the information has passed, the working party, together with the subgroup leaders, will decide whether the data provided is adequate and up to date, and whether any additional information is required. The working party is responsible for drawing up an inventory of the information obtained, and establishing what needs supplementing. 2 Preparation of the schedule (timetable and programme) for obtaining and supplementing the

information Annex 2.2 contains a model schedule for obtaining and supplementing the information. Responsibility for information-gathering is allocated as follows:

The working party coordinator:

– proposes the composition of the subgroups for obtaining information (offer of services, market and costs);

– proposes the designation of a leader within each subgroup to gather together the information obtained in the format set out in Annex 2.1 of this Guide;

– liaises between the subgroups and the support groups;

– gives guidance on locating information. The members of the working party:

– create subgroups to collect information;

– designate one person within each subgroup to be in charge of collecting information;

– allocate information-finding tasks among the members of each subgroup, with the assistance of the support groups;

– give instructions and respond to queries from the support groups concerning the information required, and the deadlines for delivering it;

– gather together the information collected in the formats set out in this Guide;

– establish what information still needs to be found, what needs updating, and what needs supplement-ing;

– decide when the information-gathering task has been completed and when work on processing it should begin.

The support groups:

– carry out the research tasks assigned to them by the working party;

– deliver the information to the working party members who requested it, having carried out the neces-sary level of analysis;

– carry out any intermediary analysis and documentation tasks required to obtain the necessary information.

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B. The current range of basic services 1 Reviewing the available information and the results of the work on updating and

supplementing it Before it begins drafting any documents on the current range of services offered, the team must first check that all the necessary information is available and up to date. The team should check that the information provided is available in the formats specified in Annex 2.1. 2 Preparation of tables of services and conditions of service provision The objective of this paragraph and those that follow is to give the Guide user assistance on the points to be included in any documents relating to the current offer of basic services. It also provides models of charts that can be used to show the current service situation. The main aspects to be covered are listed below:

– Scope and features of basic services.

– Conditions of basic service provision:

features and extent of the mail acceptance network;

features and extent of the delivery network;

delivery times;

security of items;

treatment of complaints and inquiries, and users' rights to information.

– Price of basic services. 2.1 Scope and features of basic postal services It is recommended that any study aimed at defining the range of basic services offered by the designated operator in order to provide the universal postal service should take as a starting point the obligations undertaken by UPU member states when they signed the Acts of Congress. The following chart shows the basic services which each UPU member state is obliged to guarantee in its country. Service Description

Letter-post items:

Letters Letter: an item whose content is of a current and personal nature

Postcards Postcard: an item comprising one sheet of cardboard or stiff paper sent à découvert

Printed matter

Printed matter: reproduction on paper, cardboard or other mate-rial of identical content sent to a number of addressees (bro-chures, newspapers, periodicals, books, etc.)

Small packets up to two kg. (article 12.2.2 of the UPU Convention)

Small packet: item with similar characteristics to a postal packet, but smaller and lighter

Literature for the blind up to 7 kg. (arti-cle 12.2.3 of the UPU Convention)

Literature for the blind: open letters, documents in braille for communications between the blind or official institutions for the blind

Parcels up to 20 kg. (article 12.5 of the UPU Convention

Uninsured goods

"M" bags up to 30 kg (article 12.2.4 of the UPU Convention)

Bags containing printed matter sent to the same addressee and to a single address

It is advisable to define not only the basic services that the countries actually provide, but also the main fea-tures of those services.

53

2.2 Conditions of basic service provision 2.2.1 Features and extent of the mail acceptance network It should be pointed out that it is not important in this study to distinguish between the types of acceptance point in use. It can be a permanent post office (either owned or rented) or an agency operated by third parties acting on behalf of the operator on a sales commission basis. Therefore, the term "post office" as used in this Guide refers to any acceptance point, whether owned or operated by third parties (subcontracted). It is, however, important to take into account the facilities users have to access acceptance points. This basically depends on three variables: – the extent of the postal acceptance network; – the frequency and timetable of access to the network; – the basic services provided. Reports relating to the extent of the postal acceptance network should study, at a minimum, the number of acceptance points and the way they are distributed throughout the country, making a distinction between urban and rural areas. The starting point should be the political administrative organization of the country. At this stage, the information should already have been broken down, at least as far as the basic administrative unit of territory (i.e. municipality, canton, or the equivalent in the country), its number of inhabitants and surface area, distinguishing between urban and rural zones in each municipal area. The following points should be considered: i The number of inhabitants without access to the postal acceptance network, including the following

information: – The municipalities, cantons or the equivalent without a post office, and the number of inhabitants

affected. – The population centres in municipalities, cantons, etc. that have a post office, but do not have easy

access to it (rural communities and transient settlements – normally on the outskirts of towns and cities) and the number of people affected.

The following table can be used to give a breakdown of data for each province or equivalent, showing data on the total number of inhabitants without access to postal acceptance points at municipal, provincial, regional and national level. Based on the data obtained, comparative analyses can be carried out, conclusions reached, and decisions taken.

3 National and/or international. 4 If dimensions as per the UPU Convention, indicate "UPU". If not, specify which. 5 More than one can be indicated: O – ordinary; C – certified; AR – acknowledgement of receipt; I – insured. 6 Form of delivery: PO – post office; LB – letterbox; D – door-to-door; S – signature required.

Service Main features

Scope3 Maximum weight

Maximum dimensions4

Form of acceptance5 Form of delivery6

Letters

Postcards

Printed matter

Literature for the blind

Small packets

Parcels

Other services (specify)

54

Province 1 (to n)

Municipalities Without a post office Areas with a post office but without access to it7

Number of inhabitants affected Number of inhabitants affected

Municipality 1

Municipality 2

Municipality 3

Municipality 4

Municipality n

Total ii The population's access facilities to the postal acceptance network. This is based on available data

on the number of inhabitants, surface area and number of post offices for each municipal area. For a greater degree of accuracy, it is useful for this information to be disaggregated between urban and rural areas if possible, so that the indicators will be more precise.

The following table, broken down into municipalities, should be completed for each of the country's provinces. On the basis of the information obtained, general or comparative conclusions can be reached, enabling decisions to be taken.

Province 1 (to n)

Municipality Urban area Rural area General ratios8

Number of offices

Area (km2)

Number of inhabitants (Inhabs)

Number of offices

Area (km2)

Number of inhabitants (Inhabs)

Inhabs/ office

Area/ office

Municipality 1

Municipality 2

Municipality 3

Municipality n

The team should also obtain information, disaggregated by office, on the number of staff engaged in mail acceptance (full and part time) and the average daily volume of items accepted. Reports on the frequency and hours of opening of post offices should be based on knowledge of the existing typology and criteria, if any, (e.g. number of inhabitants served, etc.) to determine whether an office will have standard or reduced opening hours.

Type of opening hours Days of

opening Weekday open-ing hours

Weekend opening hours

Type of office9

Standard

Reduced

7 This section should be completed only if the town has a post office, but includes identifiable areas where the population has no access to it, or where access is very difficult (isolated rural communities or transient settlements on the outskirts of towns or cities). 8 Depending on the information available, these ratios can be either general, or broken down into urban and rural areas. 9 Enter any criteria available (e.g. post office located in an area with more than 5,000 inhabitants) that would indicate what type of opening hours should apply (standard or reduced). Where no criteria are defined, enter "No criteria".

55

It would be useful, where post boxes are available, to collect data on the frequency of collections per day and per week.

Collections from postboxes

Number of collections a day Number of days a week

In the case of basic services provided, it is recommended to include in the report offices that do not offer the full range of basic services, as well as their locations and the number of inhabitants affected. This will provide information on the number of towns, offices and inhabitants that have access to a post office, but not to the full range of basic services.

Once this data has been broken down by municipal area, it can be grouped at provincial, regional and national level so that indicators can be obtained and conclusions drawn from it. The information can also be used at a later date as the basis for improvement and expansion plans

Province Municipalities Number of

inhabitants Offices Basic services not

provided10

Province 1

Province 2

Province 3

Province n

Total

Having considered the main aspects of preparing reports on access to the mail acceptance network, a secondary element that could be included would be a list of post offices lacking material resources for providing basic services, indicating the resources that are needed (20 kg. scales, automatic calculators, franking machines, cancelling machines, letter-facing machines, bags, labels, service forms, etc.).

Offices Material resources needed to provide basic services

Office 1

Office 2

Office 3 2.2.2 Features and extent of the delivery network

This section analyzes users' access to door-to-door delivery of postal items. The following variables should be considered: – the extent of the postal delivery network; – the frequency and regularity of deliveries.

Before starting to assess these variables, it is useful to know what forms of delivery are available in the country, and the relative importance of each method. This will provide a general picture of the level of diffi-culty that the designated operator can anticipate when introducing a country-wide door-to-door delivery ser-vice. Delivery method Annual volume Percentage of total items

Door-to-door delivery

To the post office

To post office boxes

10 Include both basic acceptance services and basic door-to-door delivery services.

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The following aspects of the extent of the delivery network should be analyzed:

i The number of inhabitants without access to the postal acceptance network. The analysis should be based on the following data:

– The municipalities, cantons or equivalent without a post office, and the number of inhabitants affected.

– The communities in municipal areas, cantons or the equivalent with a post office, but without a door-to-door delivery service, and the number of inhabitants affected.

– Communities in municipal areas that have a post office and a door-to-door delivery service, but not one that covers the whole population, so some addressees have to collect their mail from the post office.

The following table can be used to give a breakdown of data for each province or equivalent, showing data on the total population without access to postal delivery at municipal, provincial, regional and national level. The data obtained will form the basis of comparative analyses and conclusions, and enable decisions to be taken.

Province 1 (to n)

Municipalities

Without a post office

With a post office (acceptance only)11

With a post office (areas without delivery service)12 Total population

affected Population affected

Population affected

Population affected

Municipality 1

Municipality 2

Municipality 3

Municipality n

Total ii Inhabitants' access facilities to door-to-door delivery service In order to analyze this aspect, data

should first be obtained on the population, surface area, and number of post offices and delivery staff in each of the country's municipalities.

With regard to the frequency and regularity of home deliveries, the two variables usually considered are the number of times a day and the number of days a week door-to-door deliveries are carried out. However, for the purposes of a study on basic services, only the second variable, i.e. the number of days a week, need be considered, as this is the most relevant factor. It is also important to establish whether there is any means by which inhabitants are informed of the days and times on which deliveries will take place (regularity).

11 Municipalities with a post office, but with no delivery staff or door-to-door delivery routes. 12 Municipalities with a post office and delivery staff, but with no delivery routes in certain areas (rural areas, tran¬sient settlements, inaccessible or dangerous areas).

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The following table, broken down into municipalities, should be completed for each of the country's provinces. On the basis of the information obtained, general or comparative conclusions can be reached, and decisions taken.

Province 1 (to n)

Municipalities No. of Inhabs

Area (km2)

Offices Delivery staff13

Inhabs/ delivery staff

Area/ delivery staff (km2)

Items/ delivery staff (day)

Frequency (per day/ per week)14

Municipality 1

Municipality 2

Municipality 3

Municipality 4

Municipality n

Total 2.2.3 Delivery times for postal items It is difficult to analyze the current situation regarding delivery times, as there are generally no contractual or regulatory objectives in this area, and those that do exist are not monitored. Field studies are essential in order to verify data on the designated operator's delivery times. These studies can be based on an analysis of the operator's operational processes, focusing on the existing flow of traffic for ordinary letters up to 20 grammes.

Estimated delivery times for main flows

Flows Acceptance (time)15

Sorting (time)16

Transport (time)17

Office of destination (time)18

Estimated overall time J+... in ...% of items19

Capital–Capital

Capital–main towns

Capital–rest of the country

Between main towns

Main towns–rest of the country

13 Indicate number of full-time delivery staff. If mail acceptance and delivery tasks are combined, the percentage allocated to delivery should be taken into account (0.5 is half, 0.3 is a third). 14 Indicate the number of days a week on which delivery staff carry out home deliveries for each route. 15 From the time the item is accepted to the time it goes for sorting. 16 From the time the item enters the sorting office to the time it is prepared for onward transmission to the office of destination. 17 From the time the item leaves for the office of destination and the time it arrives there. 18 From the time the item reaches the office of destination to the time the postman leaves on his delivery round. 19 The overall time represents the number of days from the acceptance of the item (J+...) and the percentage of items that correspond to this estimate, taking into account the percentage of items that met the previous times (e.g. J+3 for 80% of letter-post items).

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Once the preliminary field study has been carried out and the results analyzed, a simplified table should be completed showing the current situation as regards the delivery times of the basic service offer. Times Capital Main towns Rest of the country

Capital J+... (...% items) J+... (...% items) J+... (...% items)

Main towns J+... (...% items) J+... (...% items) J+... (...% items)

Rest of country J+... (...% items) J+... (...% items) J+... (...% items) Annex 2.3 sets out another method of calculating basic postal service delivery times. 2.2.4 Security of postal items Three variables can be analyzed to describe the current situation as regards mail security in the basic ser-vices:

– the number of items affected by security problems in relation to the total number of items in the same category;

– the number of inquiries concerning items affected by security problems in relation to the total number of items in the same category;

– the adoption of security recommendations issued by the Universal Postal Union. It would be useful to include in the analysis of "the number of inquiries in relation to the total number of items in the same category" any statistics available on theft, loss and damage to items, and also the percentage of items in the same category represented by each of these at national level. An analysis of these data carried out over more than a year will indicate developments in postal security in the country. Setting out the data in table form can prove useful in carrying out the analysis. The following table can be used for this purpose and included in any study on the subject. However, if no direct data are available on the number of items affected by security problems, data on inquiries could be used as an indirect alternative.

Ordinary items affected by security problems

Letters (lc/ao) Packets

2007 2008 2009 2007 2008 2009

Incidents20

Previous total

% Of total items 2.2.5 Dealing with inquiries The analysis of the current situation regarding the handling of inquiries should begin by indicating whether the operator designated to provide the UPS has set up a specific unit for this purpose. It is also useful to include a brief comment on mechanisms outside the legal system, and separate from the postal operator, for lodging inquiries (postal regulator, consumer protection bodies, etc.). This can be followed by a table based on the one shown below, indicating the various times between lodging inquiries, resolving them, paying indemnities and, in the case of international inquiries, informing the designated operators of other countries.

20 Number of ordinary items lost, stolen or damaged. If the data can be broken down by type of incident, adapt the table accordingly.

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Activity UPU standard National standard

Lodging of inquiry Six months from the acceptance of the postal item (article 17, UPU Convention)

Resolution of the inquiry Three months

Payment of indemnity Three months from lodging of inquiry (article RL 159)

Reply to the designated operator presenting the international inquiry

30 days (electronic means) 2 months (other means) (article RL 158)

The introduction to the current situation could end with a comment on the provision made in the UPU Convention, which provides for loss, theft from, or damage to registered items, ordinary parcels and insured items, and loss of recorded delivery items only as grounds for payment of indemnity (articles 21.1.1.1 and 2 of the UPU Convention). Following the general background to the treatment of inquiries, the current situation should be addressed. This section should provide details of the number of inquiries, and the way in which they are handled. The method by which inquiries are submitted (at the post office or by electronic means), and the trend during the last few years, should also be included. These data can then form the basis of conclusions as to the potential of each of the means available for submitting inquiries. Number of inquiries 2006 2007 2008 2009

In person at the post office

Fax

Telephone

E-mail

Total The analysis of these data will result in study variables for the treatment of inquiries relating to the operator's performance in meeting the various deadlines for resolving inquiries (if defined), paying indemnities and, in the case of international inquiries, informing designated operators abroad. The criteria to be considered in these cases will be the general time limits prescribed by the UPU, except where the country concerned has set other, more stringent deadlines. The following table shows the percentages for meeting the prescribed time limits and the trend over the last few years.

Percentage of inquiries handled within the time limits set by the UPU

Activity 2006 2007 2008 2009

Resolution of the inquiry (if a national time limit exists)

Payment of indemnity (three months from the time the inquiry is lodged)

Reply to the designated operator lodging the inquiry (interna-tional inquiries): 30 days by electronic means; two months by other means

Total

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2.3 Prices of basic services Under article 3.1 of the Universal Postal Convention, member states are obliged to provide the services included in the universal postal service (basic postal services provided by the state) at affordable prices. The objective here is to analyze the affordability of the basic postal services provided by the designated operator. The analysis should cover both the basic services provided in the country, and the various condi-tions of service provision throughout the national territory. To complete the analysis, the price of basic services should also be studied. The analysis should begin with a description of the process for approving the prices of basic services, including the authorities involved in the process, and the factors to be taken into account in amending them. The next point to be addressed is the affordability of the prices set, as this is a condition for all basic services included within the universal postal service. For this purpose, the item most widely used, the letter up to 20 grammes, will be taken as a reference point. There are various ways of establishing whether the price of the letter up to 20 grammes is affordable:

– Compare the annual price trends of other macroeconomic indicators in the same country. It is recom-mended to take the prices of basic foodstuffs for this purpose (e.g. a kilo of rice, potatoes, sugar, etc., or any other commodity that forms an important part of the national diet).

– Compare the price with that of neighbouring countries, correcting it for GDP per capita in each of the countries compared (this method is used in the European Union).

In the first method, which consists in comparing the price with other macroeconomic indicators, the following table can be used to show whether the price trend relates to other variables closely connected with the pur-chasing power for these services, and can therefore be regarded as affordable.

Ordinary letter rate for items up to 20 grammes

Year Price (USD)

Variation (%)

Purchasing power (GDP per cap-ita)

Variation (%)

Inflation

Variation (%)

Average salary

Variation (%)

2005

2006

2007

2008

2009 In the second method, the reference taken is the price comparison/GDP per capita (or other indicators men-tioned above that might be easier to obtain) of neighbouring countries, as shown in the following table: Country

Domestic letter rate 20 g (USD)

PPP (USD)

GDP p.c. (USD)

Rate x 10,000/GDP

El Salvador

Nicaragua

Panama

Costa Rica

Regional average

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3 Definition of postal indicators 3.1 Introduction The previous section covers the aspects to be included in a study on the country's basic offer of services, and explains how to use tables and charts to present very detailed information (office to office, town to town). This information will be very useful in drawing conclusions about the various aspects analyzed and identifying potential problems concerning the basic offer of postal services. The object of this section is to identify key postal indicators, disaggregated by municipal areas or concen-trated by provinces or regions. It is recommended to show this data in table form, so that evident needs can by identified more easily in each of the areas concerned, conclusions drawn, and corrective measures pro-posed. These indicators should be obtained in disaggregated form at municipal level, and in concentrated form at provincial, regional and national level. Because of the volume of data involved, tables showing the most disaggregated levels of indicators (municipal level) should be attached as annexes to the report on the current situation of basic services. 3.2 Basic indicators Postal indicators to be obtained from the analysis of data gathered in the previous stage are shown below. There are other indicators for the aspects analyzed, but only those considered most relevant for identifying the situation concerning the country's current basic service offer have been considered. It should be pointed out that an excessive number of indicators could distract attention from the really important ones. – Access to acceptance:

• Percentage of the population without access to acceptance.

• Average area covered by each office.

• Average number of inhabitants served by each office.

– Access to door-to-door delivery:

• Percentage of the population without access to door-to-door delivery.

• Average area covered by each postman.

• Average number of inhabitants served by each postman, or average number of delivery points if average inhabitants at each address is known.

• Average number of items per postman.

• Percentage of routes with deliveries on two days a week or less.

– Delivery times: Percentage of items meeting set delivery times.

– Treatment of inquiries and provision of information to customers:

• Percentage of inquiries resolved within the stipulated time.

• Percentage of indemnity payments made within the stipulated time.

• Percentage of international inquiries notified to the designated operator lodging the inquiry within the maximum stipulated time.

• Percentage of offices displaying opening days and times, and information on conditions of service provision.

– Security of postal items:

• Percentage of total items handled in each category of ordinary mail (letters and packets) lost, stolen or damaged.

• Percentage of total items handled in each category of ordinary mail (letters and packets) lost, stolen or damaged for which inquiries are lodged.

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– Prices of basic postal services:

• Variation in the price of the ordinary 20 gramme letter in relation to the macroeconomic variables as regards the purchasing power of postal users.

• Tariff compared with the tariff in neighbouring countries for an ordinary letter weighing up to 20 grammes, weighted by the GDP per capita.

3.3 Comparative analysis of basic indicators Independently of the analyses carried out on the basis of the above indicators, the team should evaluate the usefulness of carrying out comparative analyses with indicators from other countries in the region. Comparative data can be found on the following website: http://www.upu.int/en/resources/postal-statistics under "Databases", country statistics (Latin America and the Caribbean, all headings). The information obtained from this source can be supplemented and updated by contacting the countries concerned direct. 4 Conclusions on current offer of services By this stage, the working party will have obtained information on the various aspects of the current basic postal services to be addressed. They will also have prepared tables of relevant indicators disaggregated to municipal level or equivalent, and identified the needs of the country's inhabitants as regards access to basic services. These data should be shown in the form of tables and charts, as indicated earlier in this Guide. The next step is to use the observable needs for improving the basic offer of postal services, identified using the criteria set out in the previous section, to draw conclusions and develop possible solutions. The following criteria can be used as a guide to improving the conditions of basic service provision:

a Improvement of indications for conditions of basic service provision

The working party should by now have collected data on the level of access of the country's citizens to both the acceptance network and door-to-door delivery services, disaggregated to municipal level. It could, therefore, begin a general discussion on these two themes, identifying the regions where the population is most badly served: sparsely populated rural areas or municipal areas with either no post office, or a post office that provides acceptance services only, and does not carry out home deliveries.

After a general discussion on the current offer, the working party should evaluate the data in specific terms, drawing conclusions as to the level of access to acceptance at post offices and home deliveries.

– At national level: It is recommended to include a comparative chart showing the situation in neighbouring countries.21

– At regional and provincial level: A comparative chart of the various regions should also be included, showing the variables that explain the situation and the regions where these have the greatest impact on results.

– At municipal level: This is the most relevant data, as it forms the basis for conclusions to be drawn at a more aggregated level (provincial, regional or national).

This information will also be used at a later stage in the work as a basis for proposals to improve levels of access to acceptance (new points of postal acceptance, new door-to-door delivery routes, and new services at the post office).

21 Up-to-date information is available in the latest IPDP reports (Nicaragua and Cuba) and can be obtained for the working party's use from the International Bureau of the UPU.

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It is important for the team to prioritize, according to the number of inhabitants affected, or any other criteria they choose, towns that will need to set up post offices and introduce door-to-door delivery routes or new basic services.

This will make it easier for them to decide at a later stage whether basic service scenarios should be low, medium or high, based on the prioritization of needs according to the above criteria.

At a later stage, the actions to be carried out to meet the objectives in these scenarios will be defined and the financial costs evaluated.

b Balance out the indicators for access to the acceptance network among the various territorial regions

The working party should identify imbalances between towns, regions and provinces in terms of access to acceptance and delivery, based on the following indicators:

– number of inhabitants per office;

– surface area per office;

– number of inhabitants served by each postman;

– number of items per postman;

– percentage of routes with infrequent deliveries.

In identifying observable needs for balancing ratios, care should be taken to compare cases where clear differences exist in terms of access to the network, despite their similar sociodemographic characteristics (population density and other observable variables).

c Progressively improve postal indicators

The team should now analyze the need to improve indicators. As we have seen in the previous point, it is not a question of simply identifying imbalances, but of improving those that already exist.

Neither is it a question of identifying observable needs for improvement solely in access indicators (acceptance and delivery), but of improving all the indicators examined in the previous section: delivery times, handling of inquiries, and security of mail items.

d The need for material resources to carry out the basic services of mail acceptance or delivery

As this is a minor point, a brief reference to needs in existing offices is sufficient, if the information is available.

e The price of basic services

Observable needs in this area relate to the level at which the price of basic postal services is considered inaccessible.

Once the working party has obtained and analyzed the data on the annual trend in prices in relation to other macroeconomic indicators for the same country, and other comparative indicators for other countries, it should be able to decide whether there is a clear need to change the prices of the basic services analyzed.

In any case, caution should be exercised when making specific proposals in this connection, as any price changes will have repercussions in other areas, particularly on income structure.

f The need to extend the network of postal acceptance offices. Parameters that can be used for this purpose include:

– a service point in all towns without an office;

– an additional service point in population centres served by an office where a large number of inhabitants have clear difficulty in accessing the post office, e.g. an additional service point for every municipal area where the population served is double the national average, given that the average taken is for municipal areas with similar population densities. The ratios used should therefore be for the number of offices in population centres with similar population densities.

Comment: These acceptance and postal service points do not need to be operated by the designated operator's staff. Possible alternatives include mobile service points, or agreements allowing other establishments to operate as agents (outsourcing) in scattered, inaccessible rural areas, with small volumes of postal items.

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g As regards the need to extend the door-to-door delivery network, the number of delivery routes for the proposed new offices should be recommended, along with new routes for existing offices.

When creating delivery routes (postmen) for the new office, the working team should take into account the average number of inhabitants and/or delivery points – homes and premises – on each delivery route, and the national average for towns with similar characteristics.

With regard to decisions to create delivery routes for existing offices, the data collected should be used to show manifest needs in terms of inequalities among the indicators (e.g. number of routes and domiciles and size of population in towns with similar population densities.) Comment: Other options include mobile post offices that accept and deliver mail, or outsource these services.

With regard to the remaining indicators concerning delivery times, mail security and the handling of inquiries, the working party should identify those that clearly need improvement, and include an analysis of these areas in its study.

C. The market 1 Review of the available data and the results of the work on updating and supplementing it As was stressed during the training workshop in stage one, it is essential in this stage for all the team mem-bers to have a good knowledge of the evaluation method. The information available and the work on updating and supplementing it should be reviewed. The team should then validate the information obtained according to how reliable it is. Data on the public services and the financial sector should be extremely reliable in order to be validated. If the team has any doubts, it should search for information that will validate it.

Information required Reliability Responsibility for data gath-

ering

Type of item Source % Reliable vol.

% Reliable value

Name Body

Basic services

Letter post

Public services

Financial sector

Industry and commerce

Government

Private customers

International services

Basic services

Parcels (packets)

Domestic

International

Express services

Domestic (documents and packets)

International (documents and packets)

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2 Defining the information needed Data relating to the market should be first quantitative, and secondly qualitative. The sources and degree of reliability of all the data thus obtained should be established. This involves identifying how it was obtained, where it came from, and how easy it is to check or verify. Depending on the validity of the information obtained, the scope of the market to be analyzed (total or partial) will be determined. It should be borne in mind that if no data can be obtained through a reliable, technical field study (normally between 95% and 97% accurate) because of high costs and implementation problems, it is advisable to limit the information to basic postal services. First of all, the size of the demand in terms of annual volume of postal items generated and the annual value of services provided should be reliably established. It is essential when doing so to ascertain the size of the demand, according to the main classification of ser-vices and business segments to be used in the legal and regulatory standards during the reform process, namely: a Basic postal services

Letter-post items (letters, postcards, printed matter and small packets weighing up to two kg, literature for the blind up to seven kg and M-bags up to 30 kg), which should be delivered without special value added conditions. These are standard traditional mail items.

Postal parcels weighing up to 20 kg (packets) b Express postal services (courier services)

These are letter-post items and packets (parcels) delivered with special value added conditions (speed, track and trace, recorded delivery, etc.).

The study will have to overcome the particular difficulties which arise in the postal market because of the lack of differentiation between services. There are differences in operational features (processing, registration, receipt for acceptance, delivery time) and also commercial differences (tariffs, etc.). When the distinctions are not clearly defined, generalized situations of abuse can occur.

The basic postal services market is characterized by its very high volumes and low prices, whereas the express (courier) market is characterized by its low volume and high prices, hence its high value and commercial importance.

Once this main difference has been established, the breakdown in demand by business segment and individual user is required, for both national and international traffic. A breakdown of the business sector should be carried out in line with the sectors comprising the national economy; the greatest possible detail should be provided for the public service segments (energy, water, telephone, etc.) and the financial sector (banks, credit cards, housing, insurance, pensions, etc.).

The market study should then establish the offer of services provided by all operators. This should include the service features offered and the organizational characteristics of the operators, their level of business and technological development, and their market share for the two service categories or lines of business (basic and express).

Finally, the study should consider market supply and demand projections over at least five to 10 years.

3 Specifications for each category of information 3.1 Information concerning demand The data to be considered will concern the segments identified as relevant according to the methodology used to prepare the IPDP for letter-post items. Domestic public services

– Water: The reference used is the total number of homes supplied with drinking water (total subscrib-ers), or the total number of urban homes times the percentage of homes with drinking water.

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– Electricity: The total number of homes supplied with electricity (total subscribers), or the total number of urban homes times the percentage of homes with electricity.

– Gas: The total number of homes supplied with natural gas (total subscribers), or the total number of urban homes times the percentage of homes with gas. It is important to take into consideration the inhabitants of each country, as some use mainly LP gas which is supplied by tanker lorries and does not, therefore, generate monthly bills. The countries concerned are mainly in areas where this is a great deal of earthquake activity, making them unsuitable for subterranean gas installations.

– Fixed telephones: The total number of telephone lines installed in the country or, failing that, the number of homes with fixed telephone lines, as in the previous cases.

– Mobile phones: Total number of mobile phones with monthly billing, not including those using prepay-ment cards.

Financial sector – Current accounts: The reference taken is the total number of active current accounts in the country.

The information should be available from the financial sector regulator.

– Credit cards: The reference here is the number of credit cards issued and active in the financial sys-tem. Information is available from the financial sector regulator.

– Savings accounts: The number of active savings accounts.

– Loan repayment accounts: The number of housing loans or commercial loans which generate regular payments or statements of account.

– Pension fund accounts: Number of pension fund account statements.

– Insurance: Number of people insured by organizations. The number of insurance companies generat-ing mail and the frequency with which it is sent out should be identified. The value is calculated as in the previous examples.

The volume of these mail items generated by each public service and the financial sector is obtained by multiplying the number of bills sent out annually (as billing is not always monthly, but can be every two or three months) by the number of subscribers or homes receiving these services. The value of these mail items is obtained by multiplying the total volume generated by each of these ser-vices by the actual price for sending each bill. If no concrete data can be obtained from local experts, an average price considered by the support group to most closely reflect the reality should be estimated. If no information is available, the average market price estimated for each bill mailed should be used. Guidance on obtaining these data is given in point 4 below. Other sectors Industry and commerce In this sector, at least five major mailing customers should be identified for each industrial or commercial sector (manufacturing industry, pharmaceuticals, metallurgy, publishing, direct marketing businesses, etc.). Once these have been identified, the volume can be assumed to represent 50% of this segment. The value can then be calculated on the basis of the average market price. Government The principal government institutions that send out mail should be identified in each sector of activity, e.g. education, health, transport, culture, taxation, agriculture, the environment, etc. The volume of items sent by these institutions will then be assumed to represent 50% of this segment. The average market price will be taken into account This segment cannot exceed 10% of the total market volume of basic services. Postal parcels (packets) In order to estimate the demand for sending parcels (packets), the working party should determine which four or five sectors of the national economy generates the greatest number of packets. It should identify which segments require deliveries by parcels firms or similar businesses (firms that subcontract transport or

67

freight should not be included). It should also be taken into account that the biggest volume in the region corresponds to the business-to-business segment. If these sectors cannot be identified, the following information at least should be obtained:

– Laboratories (clinical, pharmaceutical, chemical, scientific, etc.). At least 15 laboratories should be identified, The team should try to obtain data on the volume generated by these bodies, and the corresponding costs.

– Direct sales companies (cosmetics, packaged food, etc.) At least two firms should be identified. The team should try to obtain data on the volume generated by these bodies, and the corresponding costs.

– Firms selling spare parts, electronic goods, domestic electrical appliances and components. At least 30 firms should be identified. The team should try to obtain data on the volume distributed by these bodies, and the corresponding costs.

– Newspapers, books, magazines and publishing in general (newspapers and publications distributed within the country should be identified).

Volumes for other sectors, with regard to both basic letter-post and parcels and express services, should be calculated on the basis of estimates made by experts responsible for these calculations and their knowledge of trends in postal volumes. 3.2 Information concerning the offer of services With regard to the postal market offer, it is important to obtain information from the main operators. Having identified the number of official postal operators, it is important to separate them according to their target market segments, i.e. those with business customers only, and those primarily serving private customers. In addition, operators dealing with letter post should be distinguished from those whose business mainly involves parcels. The number of local service points provided by the operators should also be identified, separating the capital from the rest of the country. Data should also be shown separately for other towns and cities whose size or importance warrants it. 3.2.1 Number of postal operators Letter-post items The five private operators who distribute the most letter post should be identified, including the following information:

a number of customer service points, broken down into the capital and the rest of the country;

b opening hours;

c services offered;

d area covered by delivery services; and

e prices. Parcels The five private operators who distribute the most parcels should be identified, including the following information:

a number of customer service points, broken down into capital, main towns or cities and rest of the country;

b opening hours;

c services offered;

d area covered by delivery services; and

e prices.

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Express services The following information should be obtained with regard to express services:

a number of operators;

b number of customer service points, broken down into capital and rest of the country;

c the two or three firms with the biggest market share, both domestically and internationally;

d the number of firms serving business customers and the number serving private customers;

e opening hours;

f services offered;

g area covered by delivery services; and

h prices. 3.2.2 Other operators providing transport and delivery services Information should be obtained from local transport firms (bus companies) including the following details:

a number of transport companies involved in the postal sector;

b number of customer service points, broken down into capital and rest of the country;

c opening hours;

d services offered;

e area covered by delivery services; and

f prices. 4 Methodology for obtaining information In order to find the quantitative and qualitative characteristics of the demand, thus enabling the country's postal service market offer to be defined, a methodology for estimating demand must be established. This information is gathered from primary and secondary source surveys, based on which data on basic ser-vices in terms of volume can be obtained fairly easily from secondary sources that are generally available in all countries. The working party should seek the assistance of the support groups to obtain this information. Examples of primary information sources:

i Surveys of major mail-generating customers (directors and managers in the areas of subscriptions, administration and contracts). With regard to the offer, the main operators (directors, commercial and operational areas).

Annex 2.4 includes a model survey for personal interviews with business customers.

Annex 2.5 includes a model survey for personal or telephone interviews with business customers using the parcels service.

ii Surveys of the staff of the postal sector regulatory body.

iii Surveys (ordinary or telephone) of private operators and sectors whose business includes sending parcels.

Annex 2.6 includes a model survey for personal or telephone interviews with private operators. Examples of secondary information sources:

i Surveys and/or interviews with the management of public service regulatory bodies (telecommunica-tions, energy, finance, insurance, etc.).

Annex 2.7 contains a model formal letter requesting information from the public sector.

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Annex 2.8 contains a model formal letter requesting information from financial bodies.

ii Surveys and/or interviews with managers of companies that issue credit cards centrally, for various banking institutions. Establish whether they have a web page.

iii Surveys and/or interviews with airlines and other businesses such as chain stores and supermarkets that issue credit cards and customer privilege cards for promotions and discounts.

iv Web pages and publications of businesses in the relevant sectors where demand is strong.

v Surveys and/or interviews with officials from the ministry or body responsible for national planning which has the necessary information on the country's infrastructure and public services.

vi Web pages of the main private operators.

vii Data from each country's census and statistics office.

viii Statistical data from the Universal Postal Union (UPU) to enable comparisons to be made with other countries. Consultation online (access key provided by the regulator or operator).

5 Research to supplement the market data 5.1 Planning and organization Once the working party has analyzed the market data and identified which data need to be supplemented or updated, a programme of work needs to be drawn up to achieve this objective. The first step to be taken before developing the programme of work is to define the type of information that needs to be supplemented or updated. The quantitative information required is principally the volume and value of the basic parcels and express services market, in both the business and private customer segments, for national and international destina-tions. Qualitative information should include data on the commercial and operational aspects of the services, and customer preferences as regards factors such as quality and prices, for both basic and other services. The methodology for the programme of work need not be complicated. A graph showing the different activities and the times for carrying them out (Gantt chart), indicating the person responsible for each activity, will be sufficient. It is important to evaluate progress constantly throughout the process, to ensure that the objective is achieved. At least two members of the working party subgroup responsible for the postal market will be needed to carry out the work, together with at least two members of the support group responsible for this area and, if possible, logistical assistance from the coordinator. These four members (the minimum required) will devote themselves to this task from the end of stage one to the end of stage two (five weeks in all). Although this may seem a short time, it is considered feasible. As with any other project, a number of factors need to be taken into account when collecting additional infor-mation, to ensure that the objective is achieved. If the resources are available, this task can be outsourced to a market research firm. 5.2 Hiring a market research firm Once the working party has identified the additional information it needs, it should hire a company with extensive market research experience. However, given the high cost of carrying out a full market study, the market research firm's participation should be limited to conducting surveys or interviews. It is therefore important to establish the form and content of the surveys and interviews to be carried out, and the sample that will be studied.

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The various types of survey, and the advantages and disadvantages of each kind, are described in Annex 2.9. A guide to the preparation of the questionnaire to be used in the surveys or interviews is also included. The activities to be considered when hiring the firm are listed below:

Gathering and validating additional information on supply and demand.

Creating and validating the survey database.

Preparing and approving the questionnaires to be used (customers, operators).

Preparing and approving letters to customers, operators and institutions considered relevant to the survey.

Sending out letters to customers, operators and institutions considered relevant.

Carrying out surveys (in-depth interviews).

Conducting telephone surveys.

Conducting postal surveys.

Processing and tabulating data.

Preparing quantitative and qualitative market tables.

Carrying out market projections for basic postal services.

Conclusions on the country's postal market and its basic services. As well as describing the purpose of the contracted-out work indicated above, care should be taken over the following formal aspects:

– Knowledge of the regulations governing the contracting out of work.

– Preparation and documentation of the technical bases for this process.

– Obtaining replies from suppliers (budgets, bidding, tenders or proposals).

– Selection of suppliers and contract preparation.

– Management of contract and relations with supplier.

– Contract closure: closure of each contract relating to the project or a project phase. 5.3 Carrying out the research Once the working party has defined the various stages and the way they will be carried out, the next step is to begin implementing them. The implementation phase should not go beyond two weeks (the second and third week of stage two). It is recommended that each person charged with carrying out field studies should establish a plan of action for the activity for which he is responsible. At this stage, market projects concerning basic postal services should be carried out. According to international postal studies, each 1.0% of growth in a country's gross domestic product gener-ates an increase in postal traffic of between 0.8% and 1.0%. The sector also reflects the increase in popula-tion, with 1.0% growth in postal traffic for each 1.0% increase in the number of families. As these indicators show, the postal sector is a fairly clear indicator of a country's social and economic development. The projections will be based on the indicators described above. Additional indicators should be used only if they have been clearly identified as a major influential factor in the sector which cannot, therefore, be disre-garded.

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5.4 Production of data This activity should take no longer than a week (week four, stage two). During this stage, the data collected should be processed and analyzed, and quantitative and qualitative market charts and tables prepared. Once the information obtained has been analyzed, the most relevant points should be entered in the tables and charts, ensuring that aspects such as accessibility, coverage and pricing are not omitted. Great care should be taken in preparing the various tables and graphs, which should aim to be a knowledge base on the country's postal market, and therefore serve as tools for analyzing the national postal reality. Because of this, the tables to be prepared should be defined, in order to avoid including superfluous elements that add little or nothing to the objective of the work. The data in each detailed table or graph should be able to be broken down as far as possible, and should be supported by relevant estimated and supplementary data. The ultimate aim is to be able to prepare consoli-dated tables of the key elements of the postal business. Some examples of tables relating to demand, which the marketing subgroup should be able to prepare with the information obtained, are given below.

Table showing the composition of the country's postal market Services Volume Value

Millions of items % Millions (USD) %

Basic:

– Letter post

– Parcels (packets)

Express:

– Letter post

– Packets

Total Table showing the composition of the basic postal services market Basic services Volume Value

Millions of items % Millions of items %

Correspondence

– Domestic:

Business

Private

– International

Parcels

– Domestic:

Business

Private

– International

Total

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Matrix showing the composition of the country's postal flow

Origin

Destination

Private individuals

%

Companies or organizations

%

Total %

Private individuals 100

Companies or organizations 100

Total 100 100 Other recommended tables:

– Chart estimating the postal market for each sector of activity.

– Chart of the postal sector development index, in terms of items per inhabitant per year (compare with information from other countries – information available on the UPU website).

– Graph showing the composition of the whole qualitative study sample.

– Graph showing the relevant aspects of the desired service. Tables on the following questions:

– Who would you say is the market leader?

– Which is the most reliable operator? Which operator has the best technology? Which operator has the best public image?

– Which operator offers the best prices? Which is perceived as the most expensive? Which is the most customer-focused? Which company is the most socially responsible? What is the general level of satisfaction with postal operators?

D. Costs 1 The importance of defining costs The question of service costs is of prime importance in this Guide, the objective of which is to provide the guidance and assistance needed to prepare a universal postal service proposal for the country. This element, together with data on the market and the situation concerning basic services offered, underpins the analyses which will enable the most appropriate universal postal service proposal to be formulated, and submitted to the authorities for their decision. Therefore, it is impossible to ask the state to guarantee a certain level of basic services without considering the consequences of such a decision, particularly in economic terms. Given that funds are scarce and the postal service is a profitable economic activity, it is recommended to use the resources generated by the activity for meeting obligations, to avoid becoming a burden on public finances, which are always in need of funding for urgent areas such as health, education, and other priority social sectors. Naturally, the authorities in each country will no doubt want to adopt as wide a universal postal service as possible, i.e. one that offers the greatest possible number of products and services, the best service quality, and adequate access facilities throughout its geographical and demographic coverage, both for acceptance and for door-to-door delivery. However, in order for the proposal to be sustainable, and therefore valid, the costs involved in implementing the UPS should be considered, taking into account all variants. This means identifying the cost of every product and service included in the UPS. The question of service costs is important, not only in terms of the decisions taken in defining the UPS, but also because the operator has to cope in a competitive market environment, in which a strict pricing policy has to be applied in line with the conditions and structure of actual costs. The majority of countries in our region have little experience of cost analysis, the use of company accounting, cost accounting, cost centres and separate accounting records for basic services. To address these shortcomings, a special effort was required to simplify and extend the approach. Particular areas of

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weakness existed in the account management of the operator's service operations, the lack of simple and accessible structured data, and clear product pricing policies based on systematic studies of actual service provision costs. 2 Cost of the universal postal service (UPS) For the purposes of preparing the country's UPS proposal, the cost of the UPS is understood to mean "the overall sum of all the costs for providing the services included in the state's obligation to guarantee basic postal services". This definition clarifies the correct meaning of universal postal service in order to avoid any misunderstand-ing, for example the idea that it applies to postal services only for a particular segment, such as private indi-viduals, or services for remote or inaccessible regions. The UPS is a service for all: private and business customers, rich and poor, from the biggest cities to the smallest villages. The cost of this obligation covers the total costs involved in providing basic postal services as defined as the UPS, ensuring that they are accessible, affordable and of an acceptable quality. 2.1 UPS cost variability The cost of services varies according to the conditions in which they are provided:

– Access facilities for sending and receiving mail, based on the level of geographical and demographic coverage of the national postal network of acceptance and delivery points. The cost is affected by the density of the network in cities and the number of locations covered by the network. For example, the cost of covering 80% of the population is not the same as the cost of covering 98%. Similarly, there is a difference between the cost of providing an access point for every 5,000 inhabitants and for every 20,000 inhabitants.

– The frequency of availability of access facilities, i.e. the number of days on which the service is avail-able each week (acceptance and delivery) and opening hours.

– The quality of delivery times in urban areas, domestic destinations and remote and inaccessible areas;

– Quality in terms of reliability of set delivery times. – Quality in terms of security levels and liability. – Accessible pricing, in line with service costs. 2.2 Use of information on UPS costs Once the costs involved in providing the UPS have been identified and analyzed, it will be possible to define the services that can be sustainably implemented; these will, however, probably fall short of the ideal level. Having established the cost of the UPS in a specific situation or evaluation scenario, the possibilities for obtaining the financial resources to cover these costs can be considered and evaluated, and a decision taken as to whether the proposed levels of service are adequate. This last point is extremely important, as the choice of scenario considered most appropriate to the country's means will be based on the results of these analyses. In analyzing costs and the availability of resources to cover them, various viable methods of fundraising should be considered: – Sales revenue from postal operations, including both basic services such as express, and other postal

services (e.g. financial). This is the soundest method of financing the designated operator, but it requires a dominant market position, at least for basic postal services, and the establishment of a reserved area of operation, exclusive to the operator, that is adequately protected and sufficiently large to provide the necessary revenue. The reserved area should be considered as a form of payment to the designated operator (not necessarily a public operator) as compensation for meeting its obligation.

– Payment in compensation for the cost of providing the UPS in clearly defined unprofitable areas, by means of a half-yearly or annual levy on private operators, via a public fund set up for the purpose.

– Direct payment by the government of compensation for the cost of providing the UPS in clearly defined unprofitable areas, by means of resources earmarked by law in the annual national budget.

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Payments from the national budget always have the disadvantage that government resources are scarce, and the ever-present urgent needs of society take priority, whatever the law may stipulate. At the very least, payments can be delayed or reduced, as the operator will have to justify the amounts. Ultimately, the conditions of service can be gradually cut back.

– Other forms of payment from state funds. Of course, in order to carry out a cost analysis of various situations and possible scenarios, and analyze ways of obtaining the funding to cover these costs, information must be obtained on the country's postal market and the operator's current situation, range of services and market share. 2.3 Types of UPS costs identified in the process of preparing the UPS proposal The process of preparing the UPS proposal described in this Guide involves distinguishing between various types of UPS cost, which need to be calculated and used in different ways and at different times. Three types of UPS cost are used in this Guide:

– The UPS cost in the current situation. This is calculated by taking the difference between total expen-diture and expenditure in respect of non-basic services offered by the designated operator. This cost is used as a benchmark in the analysis of costs in simulation scenarios and also in analyzing proposal costs.

– The UPS cost in simulation scenarios. This is the UPS cost arrived at by applying the UPS cost calculation model. It is used in simulations and cost analyses to determine the most appropriate sce-nario for the proposal.

– The UPS cost of the proposal. This is the UPS cost in the scenario chosen as the most suitable for presenting and supporting the proposal.

3 Handling the question of costs in the preparation of the UPS proposal As we have already seen with regard to costs, care must be taken when preparing the UPS proposal to avoid lack of precision or conceptual errors. This is particularly important as the Guide is aimed mainly at countries whose business accounting practices and financial procedures are underdeveloped. These countries have to contend with extremely limited business accounting experience and the lack of properly structured financial and accounting data on postal services. This being so, practical steps must be taken to enable the work on the UPS proposal to be carried out using the data known to be available in all the countries, and likely to produce valid and viable results. This approach should also make it easier to carry out the work, while reducing the possibility of error; this is greater when technical matters are dealt with to a degree of depth and complexity that is ideal, but generally leads to difficulties in understanding and application. However, the universally accepted general guidelines on cost and accounting principles should be given, along with directions on the practical criteria applied to the work under way, details of the minimum informa-tion required for analyzing costs, and a basic explanation of the cost calculation model. 3.1 General points Cost accounting Cost accounting is an aspect of general business accounting which enables accounts to be classified in accordance with an account plan, in order to carry out special analyses, e.g. to determine unit costs per product. The principle of cost accounting is to assign to each product all the costs involved in its processing. In order to do so, each working unit, whether it is operational or administrative, is designated as a cost centre, and an analysis is carried out in each so that the appropriate costs can be assigned. For example, in the case of an acceptance point or office, costs are assigned according to the number of products handled, the number of staff involved, the materials used, etc.

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This may sound simple, but in practice the process can be more complicated, as it requires a considerable degree of organizational development and order. Today's modern businesses have to have specialized IT systems for these tasks. One of the advantages of cost accounting is that it enables inefficiency and the associated costs to be identified more easily. If a cost cannot be assigned to a product or service, it can mean that it is not essential for the company, and could be eliminated. Postal businesses in developed countries that operate postal services and the UPS as a profit-making activity apply this type of accounting. In fact, they have to keep separate accounts for UPS products and services so that the state can audit their accounts and results. Operators in developing countries should make every effort to introduce these administrative practices as soon as possible. This will enable international exchanges to take place and meet national legal requirements for the use of modern, transparent business practices in dealing with the UPS account books. The purpose of this Guide is not the application of cost accounting, but the adoption of some aspects of this type of system which may be useful for the work. Cost structure Because the account books of the operators in the countries for which the Guide is intended are incomplete, it is not possible to use a complete cost structure in the work. However, participants can refer to the cost structure model in Annex 2.10 for guidance. Given a case where some of the data required are unavailable, or obtaining them would delay the progress of the work, a simplified version of the cost structure can be considered, as outlined below. a Direct costs of operational process:

i Acceptance

ii Sorting:

– At origin: Pre-sorting is carried out at the office of origin and the sorting centre.

– At destination: The mail is sorted in the delivery office.

iii Door-to-door delivery: Percentage of mail delivered to the door.

iv Transport:

– Urban transport from the office of origin to the sorting centre.

– Transport between towns or cross-border.

– Urban transport from the destination sorting centre to the delivery centre.

– Final transport from the delivery centre to the addressee's door.

b Direct costs of materials and supplies for operational use.

c Direct and indirect public utility costs. Electricity, water, telephone, etc., facilities such as security, washrooms, cafeteria, etc., and any other services.

d Direct and indirect administration costs, support areas and central and provincial administration.

e Other costs, such as taxes, depreciation, etc.

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Unit cost Unit costs can be determined by applying a series of analyses and algorithms. However, the very simple calculation shown below is frequently used to give an initial rough indication:

General unit cost = Total expenditure

Unit cost per product = Expenditure per product

Total volume (items) Volume per product (items)

In the case of the general unit cost, the result is, in fact, an average cost and is valid when it can be used as an overall unit cost, in cases where it is not necessary to differentiate between the different types of product. If this distinction has to be made, the unit cost per product should be used, in which case separate data for each product are required. These data are available in companies' accounting systems. When considering the general unit cost, operators providing postal services in the region covered by this Guide should bear in mind the following points:

– As the postal service comprises a broad range of services of various kinds, the total volume is made up of widely differing elements.

– The total expenditure incurred will include costs associated with inefficiency.

– The unit cost thus obtained will be the same for a 20 g letter as for a 20 kg packet, therefore and is invalid. Nevertheless, this type of cost can be useful as a guide.

The general unit cost is not useful for the purposes of this work, as it does not indicate the cost of each product or service, making it impossible to calculate the UPS in detail. The unit cost per product is also of little use in the Guide, as the lack of valid accounting data would make its application too limited. Standard cost This is the cost of a typical, standardized process (always the same) for specific, simplified conditions of service. This type of cost can be obtained with processes that apply the best monitoring techniques and practices to each of the tasks carried out, and when all the necessary conditions exist for operations to proceed smoothly and efficiently. In accordance with certain specific conditions of service, the weighted value of each individual task in the operational process is determined as a direct cost of the process and the weight and value of the other costs assignable to the products. Because of its simplicity, and the fact that it can be applied to all situations, without the need for a lot of accounting data, the standard cost is the type recommended by this Guide for use in the cost calculation model for the simulations of various conditions of UPS provision scenarios. The standard cost is calculated for a postal process that is measured, and produces uniform results in line with the level set by the standard. The stages of the process are the usual routine tasks:

– acceptance, sorting, transport, delivery, etc. (pre-sale and post-sale),as direct costs of the process; added to

– administration costs and depreciation on investments in service development, to produce the total standard unit cost.

Once the standard cost has been obtained, the required percentage of pre-tax profit is added, to produce the final price to the customer. This can also be done in reverse, starting from the standard price to obtain the standard unit cost. In this system, the elements taken into account to establish the relative value of each operation in the proc-ess and to determine its cost are very important. With the standard cost, the cost of the process can be between 65% and 85% of the total cost, depending on the particular conditions for the scenario in question. Within this process, the operation with the highest cost by far is door-to-door delivery, followed by accep-tance, then sorting.

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4 Basic information This is the minimum information the working party subgroup responsible for costs needs in order to calculate and prepare the analyses on which the discussions during stage three of the work will be based. The absence of integrated data systems within some designated operators, and the lack of structured infor-mation from cost accounting systems, are factors that need to be taken into account when implementing the Guide's methodology, which should be adapted to the conditions in the countries concerned. Needless to say, complete, structured data and the application of models using econometric techniques and other more complex methods will produce the best results. Realistically, however, a simple, basic approach has to be taken, while retaining the conceptual and technical rigour necessary to ensure the validity of the discussions and operations, particularly with regard to the UPS cost calculation model used in simulations. This basic information is, of necessity, the minimum the working party should have in order to use the simple tools provided in the Guide's methodology for stage three, given that these tools have to be based on the available information. This basic information is brief, concrete, and easy to obtain, even in less favourable conditions. It is important to begin preparing this information at the start of stage one, when the team has just been formed, during the initial coordination and contact meetings with the participants, working party and support groups, and the preparatory meetings for the training workshop (which all participants must attend). The coordinator of the work will be responsible for starting work on obtaining these data, and also information on the market and the current range of services offered, in conjunction with the operator, the regulator and members of the support groups. Much of the basic information on costs will have to be replicated for the market and the current service offer. This will make it easier to obtain, and enable the participants to work jointly on its preparation. During the training workshop, which will be attended by the support group members, there will be an opportunity to discuss the areas of information required and the progress of the work on this task, so that the data will be ready by the end of the training session and the start of stage two.

Table of basic information required to calculate UPS costs As the need for the information concerned will have been indicated earlier in other parts of the Guide, it should already be available. Heading Source Level of disag-

gregation

General information – Country

– Total area in square km

– Population: number of inhabitants; latest up-to-date census

– Number and list of localities (municipal areas) in the country; latest up-to-date census

Area and population per locality; latest up-to-date census

National statistics

Information on current conditions of basic service provision

– National postal network

• Number and list of localities with access to the network

• Number and list of localities with more than one point of access to the network (offices)

• Total number of points in the national network

• Number and list of points in localities with more than one network point

Operator

"

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Heading Source Level of disag-gregation

• % of locality coverage (no. of localities with access/total localities – country)

– Geographical area with access to services

• Total area (km2) of localities with postal network points

• % of geographical coverage (area with access/total area – country)

– Population with access to services

• Total population in localities with postal network points

• % of population coverage (population with access/total population – country)

– Frequency of availability of access; number of days a week available

– Estimated delivery times

– Reliability of estimated delivery times

Operator

"

Area of operations

Last year

Data on operational volume – Volume of items per year. Total for all services

– Volume of letter post. Total

– National letter-post volume

– Volume of inward and outward international letter post

– Volume of postal packets. Total

– Volume of domestic postal packets

– Volume of inward and outward international postal packets

– Volume of domestic and international registered items

– Volume of express service items. Total

– Volume of domestic express items

– Volume of inward and outward international express items

– Number and amount of money orders

– Number and amount of domestic money orders

– Number and amount of outward international money orders – Number and amount of inward international money orders

Operator's area of operations and statistics

Last three or five years

Total annual expenditure

– Staffing costs

– General services

– Materials and supplies

– Transport

– Other costs

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Total annual revenue – Sales of basic postal services

– Sales of express and special services

– Sales of postal financial services

– Other operating revenue

– Other non-operating revenue (e.g. return on financial invest-ments)

NB. – If possible, obtain more detailed accounting data, taking as a guide the following information at least:

Accounts depart-ment


Staffing costs

– Total number of employees and annual staffing cost, including social security provision

– Number and % of administrative staff and annual cost

– Number and % of operational staff and annual cost

– Number and % of home delivery staff (postmen) and annual cost

– Number and % of acceptance staff and annual cost – Number and % of sorting staff and annual cost

HR and accounts departments

Information on other annual expenditure

– Domestic public services

– Rent

– Insurance

– Other general services (cleaning, security, etc.)

– Operational equipment and supplies

– Other equipment and supplies

– Service operations transport

– Other transport (administrative)

– Depreciation costs

– Other



Annual investments

Total annual investments

– Buildings

– Furniture

– Equipment and technology

– Motor vehicle fleet

– Other investments

Accounts department


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Income from annual sales of services

Basic postal services

– Domestic letter post (letters and printed matter)

– International letter post (letters and printed matter)

– Domestic parcels

– International parcels

Special and express services

– Registered mail

– Domestic express services

– International express services

Postal financial services

– Domestic money orders

– International money orders



The basic information on costs will be used in all the analyses required to weigh up the implications of con-sidering different conditions of service, mainly in two very important stages of the work:

– In stage two, by the subgroup responsible for calculating the cost of the current UPS, based on their observation of the different conditions of service provision.

– In stage three, by the entire working party, when calculating the cost of the UPS in the various simula-tion scenarios, based on the criteria for service conditions obtained using the UPS cost calculation model.

Review of the data As soon as work on stage two begins, the first task of the working party subgroup responsible for costs will be to carry out a detailed review of the basic information. With the help of the cost support group (finance and administration), the subgroup should then:

– carefully examine the content of each and every item of information relating to costs;

– check that the information is complete and corresponds to the subject matter requested;

– examine the consistency and validity of the data provided;

– make any corrections, adjustments and additions that may be necessary, assisted by the support group;

– exchange views and discuss concerns with the other working party subgroups and, if possible, find solutions to any difficulties that may arise;

– request the coordinator to intervene with the authorities, if necessary;

– if there are significant gaps in the information, quickly draw up a detailed schedule of work to supple-ment it.

Preparing the schedule for obtaining and supplementing information Although it is neither desirable nor probable that obtaining and supplementing the basic information after reviewing the data will involve a major effort, a plan should still be prepared and implemented for this pur-pose, once the data contained in the Guide's table of information have been studied (model provided in Annex 2.11). It is very important for the schedule to establish each person's responsibilities for information gathering, as well as indicating deadlines.

– Subgroup responsible for costs. This subgroup identifies the problem, determines how to resolve it and prepares a work schedule, in consultation with the working party, which contributes ideas and participates in the work.

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– The coordinator of the work The coordinator is responsible for obtaining the cooperation of the operator's and regulator's management, and the direct participation of the support group responsible for finance and administration, and for getting specific undertakings to produce results.

5 Calculating current UPS costs (basic services currently provided) In most countries in the region to which the Guide applies, the UPS is not established either in national postal legislation or in the regulatory standards for the sector. Furthermore, specific details of the basic postal services provided by the operator are not formally established in sectoral standards. Given these circumstances, and in order to apply the practical criteria set out in this Guide, the difficulty in obtaining cost data should be taken into account, and a rough idea of the basic service costs obtained, bear-ing in mind that this offer corresponds to the UPS currently provided. The following equation shows the cost calculation for the existing offer of services: the enterprise's total costs are equal to the total costs for basic services plus expenditure associated with other services. Therefore, the total costs for basic services are equal to the total expenditure less the costs associated with other services. Total costs = Basic service costs (+) Costs for other services

Hence:

Basic service costs = Total costs (–) Costs for other services If the amount of expenditure incurred for providing non-basic services is known, either exactly or roughly, the relevant amount can simply be subtracted. Otherwise, a percentage needs to be calculated and deducted from the total cost. This should be a weighted percentage, calculated on the bases of the volume and value (sales) variables of the services that are excluded. It should be borne in mind that the services to be excluded are normally very low volume, although their operating costs are higher than for basic services (owing to the processes involved) and higher in price. These characteristics should therefore be reflected in the weighting factors assigned to them. 6 Defining the UPS cost calculation model for simulations The UPS proposal should be based on an acceptable basic service offer, adapted firstly to the economic and social needs of the community, and secondly to the possibilities offered by the level of development of the national postal market and the country's economy. The acceptability of the service offer is directly related to the conditions of service provision and quality, which in turn determine the level of costs and prices. These are dependent on the levels of commercial and market development, development in terms of specialized postal technology and investment, and the level of efficiency of the national postal sector. The conditions of service provision presented in the proposal therefore need to be set at a reasonable, viable level that will be considered acceptable from both an economic and a technical point of view. Of course, the desired levels (generally optimum) will not always be feasible in terms of technical implementation and financial sustainability. A viable and sustainable level therefore needs to be found in terms of both the cost, and the technical aspect. A proposal prepared along these lines can then be presented and defended. At present, the basic service provision in the countries of the region is, with some exceptions, well below reasonable and acceptable levels with regard to access facilities and quality levels that meet the needs of the community. The proposal will therefore inevitably be based on improving these conditions to the highest possible standard in the future. In order to ascertain the degree of improvement possible, a great many factors need to be taken into account. As has already been mentioned, real viability depends ultimately on the level of costs that can be supported.

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Costs therefore need to be studied in a variety of possible situations and scenarios, realistically representing conditions in today's world, where the market, the legal framework and the presence of private operators and competition all have be taken into account. In other words, the different cost levels for each simulation scenario need to be calculated so that analyses can be carried out and conclusions reached on the basis of the results. Stage three of this Guide consists in defining possible scenarios, carrying out simulations, calculating costs, conducting analyses and forming conclusions. At this stage of the process, the model for calculating UPS costs to be used in the simulations should be defined, ready for use in the following stage. The cost calculation model used in the simulations should aim to produce very precise results that closely reflect reality. Models of this kind require a high level of technical expertise and professional staff with highly specialized knowledge of advanced economics. They also call for very detailed general economic, financial, accounting, commercial and operational information, which is difficult to obtain and costly to implement. Consequently, these criteria cannot be met at present. The Guide has chosen a model with minimal technical and data requirements, so that it can be understood and used in any case. It cannot, therefore, be claimed that this kind of model is ideal; however, it enables a very simple type of calculation to be used, with minimal requirements in terms of data, as the necessary information should all be available in the basic data concerning costs, even in the most difficult circum-stances. This simple, basic model should be regarded as producing a rough result, which can, and should, be used for the practical purposes of the work. Cost calculation model for simulations – basic model (Guide working tool) For this cost calculation model, it will be assumed that the conditions of service provision are included in standardized form. This will enable generalized and simplified calculations to be made (simplification of variables and calculation formula). The behaviour of variables such as access can then be assumed to be uniform and predetermined. The simplest variables are access, frequency, opening hours, types of post office or network point (fixed or mobile), types of network point premises (owned, rented), areas of network point premises, process operation at network points (direct, outsourced) transport operation (direct, outsourced). The question of the designated operator's development can also be addressed simply, by considering whether the UPS operator, be it public, private or mixed, needs investment and modernization in order to offer acceptable services which the state wishes to guarantee. As investments are covered by the operation of services in the market, the government needs only to underwrite the financing, which means there is no burden on public funds. The following investments are included in the model: a) long-term financing for the modernization of postal processing operations, (soft loan over 15 or 20 years, with a payment-free period of four or five years, at a rate of 4% or 5%), with amortization included in the standard cost per product and per item; and b) invest-ment in the installation of network access points, with annual amortization included in the total annual cost of the UPS. It is assumed that the postal network will carry out a total reorganization of its premises, to ensure that the necessary facilities for the operational processes will be available. Few of the existing network points are considered not to need investment, and represent only a small fraction of the overall network. In the model, data on the size of the market are extremely important. The projected volume of basic services correspond-ing to the UPS operator's market share determines the cost, and also the revenue that will cover these costs.

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The size of market share that the designated operator anticipates establishing must be based on the national reality, the possible legal framework for the sector, and market practices. The market share assigned to the operator is determined in the calculation scenario, which should consider possible methods of financing and the level of service operation required by the UPS operator, in order to obtain the revenue needed to cover its costs. The main variables and other important aspects of the model are set out below. 1 Access – Geographical and demographic coverage

Geographical coverage is defined by the number of localities or municipal areas with points of access to the designated operator's postal network. This number defines the geographical area of the territory with access to services. It is desirable for all administrative centres to have access to services.

Demographic coverage corresponds to the number of inhabitants with access to services. It can be expressed as a percentage.

Parameters can be established for these two criteria according to needs, possibilities and advisability. For example:

• For towns or cities and localities with over 60,000 inhabitants: One acceptance point for every 30,000 inhabitants and/or every 100 blocks (500 metres from the acceptance point).

• For small localities: One acceptance point for each administrative centre and/or locality with up to 3,000 inhabitants.

– Frequency of access for sending and receiving postal items:

• For sending postal items. Number of days a week with acceptance service, according to the size of locality; number of opening hours per day.

• For door-to-door delivery of postal items. Number of days a week with door-to-door delivery services, according to the size of locality; number of hours per day delivering to localities with fewer than 20,000 inhabitants.

2 Quality of service – Delivery time: The level of delivery times accepted by the standard. It is assumed that controlled

technical design processes will be used so that results will be standardized throughout the network. The result is the standard delivery time in the network.

– Reliability: The level of delivery times set in the standard. It is assumed that the controlled technical design processes used are reliable throughout the service network.

– Security: With controlled technical design processes, levels of irregularities and cases of loss, mislaid items, rifling, damage or theft are minimal; as a result, security levels are very high and the rate of claims or irregularities accepted in the security standard is extremely low (less than 1 per 10,000).

– Liability: Good quality services lead to customer satisfaction and low levels of claims and inquiries, which are handled via easily accessible systems in the service network. In the event of a claim or inquiry, the designated operator's system should respond to it within a standard set period (10 to 15 days or less).

3 Other operating conditions – Surface area of network service point premises: 12 to 20 square metres.

– Network points in rented premises. It is assumed that all these premises are rented.

– Outsourced operations, at least in all network points in localities with fewer than 20,000 inhabitants (one network point per locality).

– The cost of installing a network service point is estimated at 6,000 USD, including all necessary postal operations. The annual amortization cost is estimated at 900 USD per network point, over an amortization period of 10 years

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Furniture and equipment Estimated value (USD)

Postal furniture for customer service and office use 2,000

IT equipment (PC, printer, etc.) 1,000

Postal equipment (scales, trollies, cancelling machines, etc.) 2,200

Visual identity 500

Other 300

Total 6,000 – Outsourced transport (motor vehicles, motor cycles).

– Postal processing operations for the acceptance, sorting, transport and delivery stages, carried out according to a standardized, measured process within set parameters, to produce a daily "zero" bal-ance of items waiting to be processed.

Standard unit cost for letter-post items Based on an analysis of the different countries in the region, the standard unit cost is 0.32 USD. The following table shows a breakdown of this cost. The second column contains a breakdown of the opera-tional process. In the third column, other costs such as administrative costs and unit costs for amortizing investments for developing service operations have been added.

Heading Cost of opera-tional process

Total service cost

Total cost (US cents)

Acceptance 21% 16.4% 5.25

Sorting 18% 14.0% 4.48

Transport 12% 9.4% 3.01

Delivery 44% 34.3% 10.97

Other (marketing operations) 5% 3.9% 1.25

Administration 17.0% 5.44

Amortization of process investment 5.0% 1.60

Total 100 32.00

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Standard unit cost for packets (postal parcels) Based on an analysis of the different countries in the region, the estimated standard unit cost is 4 USD. The following table shows a breakdown of this cost. The second column contains a breakdown of the opera-tional process. In the third column, other costs for administration and amortization of investments in opera-tions have been added.

Heading Cost of operational process %

Total cost %

Total cost (USD)


Sorting 18% 14.0% 0.56

Transport 12% 9.4% 0.38

Delivery 44% 34.3% 1.37




Total 100 4.00 The procedure for calculating unit costs is given in Annex 2.12. Formula for calculation model The cost of the UPS is obtained by adding the actual cost of providing the UPS, or UPS operating cost (UPSOC) and the annual amortization of the investment made to install service points, provide access to the network, and enable services to be provided (ApoS).

Cost of UPS = UPSOC + APoS

This enables a method to be defined for calculating the UPSOC, and also the investment in installing network points for the provision of services. The cost of operating the UPS (UPSOC) is obtained as follows:

UPSOC = Vol1 x CU1 + Vol2 x CU2

where: V1 is the annual volume of letter-post items handled by the UPS operator in the calculation scenario, measured in numbers of items; CU1 is the standard unit cost for a 20 g letter, measured in USD/item22; V2 is the annual volume of packets or postal parcels handled by the UPS operator in the calculation scenario, measured in numbers of items; CU2 is the standard unit cost for a packet or parcel with an average weight of 3 kg, measured in USD/item;

22 The use of USD or a similar currency is recommended in order to avoid distortions resulting from possible devaluations or fluctuations in the exchange rate.

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APoS is the amortization of the investment made to install network points. It is measured in USD, on the basis of the annual cost of amortization and the number of network points.

APoS = NP x A

where: NP is the number of network access points which the UPS operator will have in the calculation sce-nario, measured in service units; and A, is the annual amortization cost of the investment to install one network service access point, measured in USD/service unit. Therefore, the cost of the UPS can be calculated using the following simple formula:

Cost of UPS = Vol1 x CU1 + Vol2 x CU2 + NP x A

Therefore, in the simple, basic model, the cost of the UPS is equal to the volume of letter-post items multi-plied by the standard cost of the letter-post service, plus the volume of parcels multiplied by the standard cost of the parcels service, plus the number of network points multiplied by the annual amortization cost per point.

If the calculated unit costs and the calculated amortization are applied, the formula for the model will be as follows:

Formula for the UPS cost calculation model

Cost of the UPS Vol1 x 0.32 USD/item

+ Vol2 x 4.0 USD/item

+ NP x 900 USD/service unit In the UPS cost calculation model, the formula assumes that the unit costs of 0.32 USD per letter-post item (20g), and 4 USD per parcel post item (3 kg), correspond to service provision conditions with average access facilities and quality, i.e. between the minimum acceptable and desirable towards the low end, and the maximum possible and achievable towards the high end. In order to be able to simulate different situations for service provision conditions in the mid range, the UPS cost calculation model sets two additional standards for the standard unit cost, one towards the low end ("standard unit cost – low") and one towards the high end ("standard unit cost – high"). This enables the UPS calculation model to be used to calculate costs for three categories of service provision conditions: low, medium and high, referring to access conditions, quality and other conditions.

Conditions of service provision in the calculation model

Services Standard unit cost (USD)

Low Medium High

Letters (20 g) 0.26 0.32 0.38

Parcels (3 kg) 3.2 4 5 The UPS cost calculation model thus consists of three formulas:

a "Low" conditions of service provision situation

Cost of UPS = Vol1 x 0.26 USD/item + Vol2 x 3,20 USD/item + NP x 900 USD/service unit

b "Medium" conditions of service provision situation

Cost of UPS = Vol1 x 0.32 USD/item + Vol2 x 4.0 USD/item + NP x 900 USD/service unit

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c "High" conditions of service provision situation

Cost of UPS = Vol1 x 0.38 USD/item + Vol2 x 5.0 USD/item + NP x 900 USD/service unit

Adjustments for variations in volumes The models shown above were calculated on the basis of the country's total postal market volume. However, if the volume handled by the designated operator is smaller, the costs increase as economies of scale are reduced, and expected productivity levels fall as a result. If the volume is reduced, standard unit costs increase, as both service network and delivery costs remain the same, irrespective of the volume handled:

Standard unit cost = USD/Item The smaller the number of items, the higher the cost. Because of this, an adjustment factor has to be applied to take account of the reduced volume, as shown below:

Percentage of market volume handled by the designated operator

Volume adjustment factor

100% 1

75% 1.25

50% 1.5

25% 2 The model for a "low" conditions of service provision situation would be as follows: Volume handled by the designated operator

Cost model

100%

Cost of UPS = Vol1 x 0.26 USD/item + Vol2 x 3.2 USD/item + NP x 900 USD/ service unit

75% Cost of UPS = Vol1 x 0.325 USD/item + Vol2 x 4 USD/item + NP x 900 USD/ service unit

50% Cost of UPS = Vol1 x 0.39 USD/item + Vol2 x 4.8 USD/item + NP x 900 USD/ service unit

25% Cost of UPS = Vol1 x 0.52 USD/item + Vol2 x 6.4 + NP x 900 USD/service unit

The model for a "medium" conditions of service provision situation would be as follows: Volume handled by the designated operator

Cost model





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The model for a "high" conditions of service provision situation would be as follows: Volume handled by the designated operator

Cost model


75% Cost of UPS = Vol1 x 0.475 USD/item + Vol2 x 6.25 USD/item + NP x 900 USD/service unit

50% Cost of UPS = Vol1 x 0.57 USD/item + Vol2 x 7.5 USD/item + NP x 900 USD/ service unit

25% Cost of UPS = Vol1 x 0.76 USD/item + Vol2 x 10 + NP x 900 USD/service unit

Annex 2.13 shows the table of adjustment factors to be applied depending on the designated operator's share of the letter market, and the standard unit cost for letter-post and parcels items in each of the three scenarios.

Annexes

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Annex 2.1 Format for providing information I. Tables of socio-economic data Political-administrative structure

Type23 Name24

Provinces Region 1: (List the provinces in Region 1) Region 2: (List the provinces in Region 2) Region N: (List the provinces in Region n)

Municipal areas/cantons Province 1: (List the municipal areas in Province 1) Province 2: (List the municipal areas in Province 2) Province N: (List the municipal areas in Province n)

Demographic indicators

Variable 2005 2006 2007 2008 2009 Average rate of variation

Surface area (m2)

Population

Urban population (%)

Number of homes

Number of homes in urban areas Demographic indicators

Province 1....... N25

Municipal areas Urban areas Rural areas Transient settlements

Population Surface area



Municipal area 1

Municipal area 2

Municipal area 3

Municipal area 4

Municipal area N

23 This structure is for guidance. Users of the Guide should adapt it to each country's characteristics. 24 List each of the country's regions, provinces and municipal areas or cantons. 25 One table should be completed for each province or the equivalent in the country.

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Economic indicators


GDP (USD)

Per capita GDP (USD)

Purchasing power parity (PPP)26

Inflation (%) Social indicators

2006 2007 2008 Variable 2005

Unemployment rate

Average wage (USD)

Illiteracy rate Technological substitution indicators


Rate of homes with Internet access

Rate of businesses with Internet access Indicators for use of public services


Number of installations (contracts) providing drinking water

Number of homes supplied with gas

Number of installations (contracts) providing electricity

Number of homes supplied with electricity

Number of installations (contracts) providing natural gas

Number of fixed telephone lines (contracts)

Number of mobile phone contracts

Number of Internet contracts

Number of cable TV contracts

26 Purchasing power parity.

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Banking indicators


Number of bank current account contracts

Number of bank credit card contracts

Number of savings accounts

Number of loan repayment accounts

Number of pension fund accounts

Number of insurance contracts II. Table of postal operations data List of basic services and features

Service Main features

Service27 Maximum weight

Maximum dimensions28

Method of acceptance29

Delivery method30

Letters

Postcards

Printed matter

Literature for the blind

Small packets

Parcels

Other (please indicate)

Development in number of post offices in the country

Number of post offices 2005 2006 2007 2008 2009 Average rate of variation

Province 1

Province 2

Province 3

Province 4

Province 5

Province n

Total

27 Domestic and/or international. 28 If in accordance with the UPU Convention, indicate UPU. If not, specify. 29 More than one can be indicated: O – Ordinary; R – Registered; AR – With acknowledgement of receipt; I – Insured. 30 Delivery method: PO – Post office; M – Mailbox; D – Door-to-door; S – Against signature.

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Types of post office opening hours

Type of hours Opening days Weekday opening hours

Weekend opening hours

Type of post office

General

Reduced Inventory of offices – Opening hours and services

Province 1…..N

Municipal areas Offices Frequency of opening31

Basic services provided32

Comments33

Municipal area 1

Municipal area 2

Municipal area 3

Municipal area 4

Municipal area N

Total Municipal areas with no post office or with areas without acceptance and/or delivery

Province 1......N

Municipal areas Without a post office With a post office (acceptance only)34

With a post office (Areas without acceptance)35

With a post office (Areas without delivery)36

Population affected Population affected Population affected Population affected

Municipal area 1

Municipal area 2

Municipal area 3

Municipal area 4

Municipal area N

Total

31 General or reduced hours. If reduced, indicate opening hours. 32 Indicate whether full or partial. If partial, indicate in the comments column which basic services are not provided. 33 Give details of opening frequency (opening hours or days). 34 Municipal areas with post office that accepts and delivers mail at the office only. No delivery staff. 35 This section to be completed only if the municipal area has an office, but has identified areas where inhabitants' access is impossible or extremely difficult (isolated rural population centres or transient settlements on the outskirts of municipal areas). 36 Municipal areas with a post office and delivery staff, but without delivery routes in certain areas (rural areas, transient settlements, inaccessible or dangerous areas).

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Collection from postboxes

Number of collections a day: Number of days a week: Annual volume of items delivered

Delivery method Annual volume Percentage of total items

Door-to-door

At post office

To post office boxes Percentage of delivery staff in relation to total postal employees

Items 2005 2006 2007 2008 2009 Average rate of

variation

Total staff

Total delivery staff

% of delivery staff Inventory of delivery staff

Province 1…..N

Municipal areas Offices Delivery staff

Average number of items per postman

Frequency of deliveries by postman (days a week)

Municipal area 1

Municipal area 2

Municipal area 3

Municipal area 4

Municipal area N

Total

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Estimated delivery times between main flows

Flows Acceptance (time)37

Sorting (time)38

Transport (time)39

Destination office (time)40

Estimated final time J+... in ...% of items41

Capital–Capital

Capital–Principal localities

Capital–Rest of country

Between principal localities

Principal localities–Rest of country

Security recommendations

Checklist Yes/No

Security manuals dealing with theft of postal items, transport of dangerous goods and evaluation of mail losses.

Designated specialist staff and team leader in charge of postal security. Normally required in high-risk areas, such as national and international airports.

Material resources in areas of particular concern: dogs, X-ray equipment, closed-circuit television, special means of transport and storage for high-value items (safe deposit boxes, strong rooms, special vehicles).

Identify particularly sensitive areas with regard to postal security. It is recommended to create security perimeters with restricted access. Special processing for insured, EMS and registered items.

Identity cards for staff.

Ongoing institutional dialogue between air, airport and postal security coordinators. It is recommended to formalize security cooperation agreements with police, customs and airport authorities.

Adopt recommendations concerning dangerous goods (UPU, IATA and ICAO regulations). Carry out security checks on postal items before handing them over to airlines and introduce methods of detecting dangerous goods.

Adopt recommendations concerning lost mail (use of the free e-MARIA programme or another system for analyzing mail losses).

Adopt recommendations on the theft of postal items (spot checks, criminal record checks on staff, standards including specific penalties for theft of postal items, UPU standards on postbag seals and processing of loose or damaged items).

NB. – Indicate if the recommendations have been only partially met, and include a note explaining any points not been implemented.

37 From the time the item is accepted to the time it goes for sorting. 38 From the time the item enters the sorting office to the time it is sent for onward transmission. 39 From the time the item leaves for the office of destination to the time it arrives there. 40 From the time the item reaches the office of destination to the time the postman picks it up for delivery to the addressee. 41 The final time is expressed as the number of days between the acceptance of the item (J+...) and the percentage of items that will meet this estimate, taking into account the percentage of items that met previous times (e.g. J+3 for 80% of letter-post items).

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Development of reference postal tariff 2005 2006 2007 2008 2009 Average

rate of variation

Ordinary letter up to 20g (USD)

Ordinary parcel in first weight step (USD) Neighbouring countries

Examples

Domestic rate for 20 g letter (USD)

Per capita GDP 9 (USD)

Tariff x 10,000/GDP

Tariff x 10,000/PPP

Guatemala

El Salvador

Honduras

Nicaragua

Panama

Costa Rica

Average National times for treating inquiries

Lodging of inquiry (domestic and international items)

Resolution of inquiries

Payment of indemnities Percentage of inquiries treated within the times stipulated by the Universal Postal Union

Activity 2006 2007 2008 2009

Resolution of inquiries (if national time limit exists)

Payment of indemnities (three months from lodging of inquiry)

Notification to designated operator presenting the inquiry (international inquiries) 30 days by electronic means, two months by other means

Total Number of inquiries per means of acceptance 2006 2007 2008 2009

Presented at postal premises

Fax

Telephone

E-mail

Total

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Reasons for inquiries

Letters Packets

2007 2008 2009 2007 2008 2009

Theft

Loss

Damage or deterioration

Total

% of inquiries for total items III. Tables of postal market data Volume and composition of designated operator's items

Type of item Urban National International

Letter-post items (LC/AO)

Parcels (packets) (CP)

Express items (Courier) (EMS)

Total

Percentage posted – businesses/ individuals

Businesses or public bodies: _____%

Individuals: ______% Designated operator's tariff for a 20 g letter

Sender Urban National International

Businesses

Individuals Designated operator's tariff for an ordinary parcel (packet) in the first weight scale


Businesses

Individuals Designated operator's average tariff for an express item


Businesses

Individuals

99

Estimated volume and composition of items handled by private operators


Letter-post items (LC)

Parcels (packets) (CP)

Express items (Courier) (EMS)

Total Private operators' average tariffs


Letters

Parcels (packets)

Express items (Courier) Water Gas Electricity Fixed tel. Mobile tel.

with contract Internet Cable TV

No. of bills per month42

Average price for sending bill (USD)

Current

account Savings account

Credit cards

Loan repayment account

Insurance contract

Pension fund account

No. of bills per month42

Average price for sending bill (USD)

42 Indicate "1" if a monthly bill per household is sent out. If one bill is sent out every two months, indicate "0.5" and "0.33" if every three months.

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Additional postal market data43

Estimated number of private operators National:

International:

Multiple:

Five main private operators List operators:

Five main industrial/commercial customers (periodical publishers, direct marketing firms, etc.)

List customers:

Total volume:

Average tariff per item:

Five main government institutions List institutions:

Total volume:


Four main segments of the economy generating parcel post items (not freight)

List segments:

Fifteen main laboratories List laboratories:

Total volume:


To main direct sales businesses List direct sales businesses:

Total volume:


Thirty main businesses selling spare parts, electronic goods and components

List businesses:

Total volume:


Main publishing companies (magazines, periodicals, books)

List publishing companies:

Total volume:


Information required in section C.3.2. (Information concerning the offer of services)

Reports and surveys on customer demand To be attached

Reports and surveys on postal market structure To be attached

Main areas of demand for private operators 1

2

3

43 To find this information, refer to C.4 of this Guide (Methodology for obtaining information).

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IV. Tables of economic-financial data on the designated operator Basic economic-financial data on the designated operator

Items (in thousands) 2005 2006 2007 2008 2009 Average rate of variation

Revenue (USD)

Expenditure (USD)

Operating results (USD)

Investments (USD)

State subsidy (USD) Additional economic-financial data on the designated operator

Budget, investment and financing plans for future scenarios

To be attached

Annual accounts (balance sheet, profit and loss account and reports)

Key data

Show the cost/revenue data studies by product To be attached

Forms of financing (indicate amounts) State subsidy:

Indebtedness (loans):

Percentage of revenue by sector of activity Letter post:

Parcels:

Express:

Philately:

Other:

Percentage of postal/non-postal revenue Postal revenue:

Non-postal revenue:

102

Annex 2.2 Schedule for obtaining and supplementing information

Socio-economic information

No. Information Subgroup responsible

Deadline

1 Tables of socio-economic data

2 Tables of postal operations data

3 Tables of postal market data

4 Tables of economic and financial data relating to the designated operator

103

Annex 2.3 Methodology for defining the current situation as regards basic postal service delivery times A. Introduction Two measurement systems may be used:

– Transmission times (from the postmark at origin to the postmark at destination).

– End-to-end (the entire process, from acceptance of the item through to delivery to the addressee). B. Methodology used The method of measurement to be used covers the entire postal process and is known as end-to-end testing. The methodology has been approved by the European Union and adapted to country characteristics (reference EN 13.850, European Union). It is recommended by the Universal Postal Union and ensures both reasonable costs and over 95% reliability. C. Description of the steps to be followed a Determining the sample of items and panellists

– Size of the sample: 500 items (for 95% statistical reliability).

– Number of panellists44: 50 (their location must not be revealed to the postal operator).

Items are pre-prepared (indistinguishable from others which include a test letter identification card to be filled in by the addressee) and delivered to all the panellists, indicating the dates, offices and destinations. 90% of items must be under 20 grammes (C6 envelope), 7% must be between 20 and 50 grammes (C5 envelope) and 3% must be over 50 grammes (C4 envelope).

– Each item will include a test letter identification card which must be filled in by the addressee on receipt of the item.

b Establishing the number of acceptance points/offices

– 50 panellists/437 offices (acceptance and delivery) = 0.11 (average number of panellists per office).

– For a co-efficient of 0.11, 7.04% of offices must be covered (see the table under point 5.5 of the CEN standards).

– 7.04% equates to covering 31 offices (a minimum of 30 offices must be covered under the standard). c Defining the acceptance points/offices

The 31 offices are selected on the basis of a multi-layered model, taking account of the following elements:

– Dividing the country into regions or large areas.

– Establishing which offices correspond to each region or area, based on the following criteria:

44 Panellists are tasked with sending and receiving items pre-prepared under the conditions set out here, and with noting the dates of acceptance and receipt thereof.

104

Areas Postal volume (accepted)

Population Percentage of offices

Average Offices selected

1 % % % %

2 % % % %

3 % % % %

Total 100% 100% 100% 100% 31 – For each area, the number of offices in both urban (over 50,000 inhabitants) and rural areas must be

established.

Areas Offices selected % of rural population Rural offices Urban offices

1 %

2 %

3 %

Total 31 100% – If possible, the distance criterion must also be taken into account; at least 200 kilometres between

offices. d Determining the destination of the mail (flows)

– Based on the composition of the operator's mail flows (the following is an example):

1 Urban E.g. 31.44%

2 Urban–urban interregional E.g. 24.85%

3 Urban–urban intraregional E.g. 23.07%

4 Urban–rural interregional E.g. 15.12%

5 Urban–rural intraregional E.g. 2.32%

6 Urban–rural E.g. 2.40%

7 Rural–rural E.g. 0.80%

8 Total items 100% – Either of the following options may be selected:

• Of the 500 test letters dispatched, the actual flows indicated in the table are taken into account.

• The percentages indicated in the table are not taken into account, but are subsequently adjusted when the results are out (number of items delivered in J+1, J+3, J+5) according to the percentages indicated in the table (possibly the easiest solution).

D. Procedure to be followed by panellists – The dispatches must take place in a 15-day period (items sent on non-working weekends must be

included and it must be a normal period as regards volume of traffic).

– Items will be sent at different times from each office.

– The sending panellists will receive the items for dispatch grouped into batches (with the same date and place of posting).

105

– The addressee panellists will receive items from the other panellists and will fill in the date and place of posting of each item delivered, on a form which they will receive together with the test letter identification cards (in each envelope).

– They will periodically forward the forms and test letter identification cards to the fieldwork monitoring office.

E. Template to be sent with the test letters This card will be included in the envelopes sent by the panellists at origin and must be filled in by the panel-lists at destination. It must then be sent to the data processing centre responsible for monitoring the item delivery time.

Date of posting: 26/09/2010 Type of item: Letter Code: **********

Panellist at origin: Ms Petra Perez Address XXXXXXXXXXX

Panellist at destination: Ms Maria Flor Address XXXXXXXXX

Postmark date:

Delivery date:

Delivery time:

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Annex 2.4 Personal survey interview with business customer

Form No. Name of interviewee

Position

Company

Sector

Locality

Telephone Name of interviewer

Good morning/afternoon. My name is and I am calling from (regulator, ministry of finance, operator or coordinating body). We are carrying out market research on postal services in our country. Given that your business uses these services extensively, we believe that your response will be very useful to us. Your answers will be kept in the strictest confidence and the interview will last just a few minutes. I would be very grateful if you could give me a few minutes of your time. Is now alright for you? (If they say no, ask what day and time they would prefer). 1 When you think of postal businesses, which ones come to mind first? Any others? (Note exactly)

National

1

2

3

4

5 Does not know/No answer (DK/NA)

International

1

2

3

4

5 DK/NA

National parcel delivery

1

2

3

4

5 DK/NA

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2 Of these businesses, which would you say is the market leader? National International

1 1

2 DK/NA 2 DK/NA 3 Of these businesses, which would you say is the most reliable? National International

1 1

2 DK/NA 2 DK/NA 4 And the least reliable? National International

1 1

2 DK/NA 2 DK/NA 5 Which would you say uses the best technology? 1 2 DK/NA

6 Which would you say is the most socially responsible? 1 2 DK/NA

7 Which of these businesses would you not work with?

If one/some, read q.8. If you would work with all of them, go to q.9. 1 2 Would work with all 3 DK/NA

8 (If the answer is some) why? 9 How many postal items were handled by your business over the past three years? 2007 2008 2009

No. of domestic items

No. of domestic parcels

No. of international letter-post items and parcels

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10 Roughly how much would you say your business spent on postal services last year? On domestic items USD (if they cannot remember, ask for a rough estimate in local currency and convert later). On domestic parcels USD (if they cannot remember, ask for a rough estimate in local currency and convert later). Internationally USD (if they cannot remember, ask for a rough estimate in local cur-rency and convert later). Total USD (if they do not answer the above). 11 Please provide us with a rough breakdown of your postal items as per the following:

11.1 Geographical coverage 11.2 Delivery type

Destination % Delivery % Delivery times

1 Capital and metropolitan area 1 Non-priority

2 Domestic 2 Priority

3 International 3 Other(specify)

4 DK/NA 4 DK/NA

Total 100% Total 100%

11.3 Content 11.4 Weight of items

Items % Weight %

1 Business mail (including invoices)

Under 20 grammes

2 Direct mail Between 20 and 100 grammes

3 Postal parcels Between 100 and 500 grammes

4 Personal mail Between 500 and 2,000 grammes

5 Other(specify) Other(specify)

6 DK/NA DK/NA

Total 100% Total 100% 12 Last year, which postal service providers did your business work with? If you can, please list them in

order from most to least used.

Most used DK/NA

Second

Third

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13 (For those that work with more than one business) Why do you work with more than one business? Services offered

No single business can handle our workload

Because of the area they cover

Trying out options

Other (provide details)

DK/NA 14 Why did you choose the business you work with? 1 3

2 4 15 Please use the following scale to indicate how relevant these aspects of the service are to you when

sending mail.

Let us now turn to your level of satisfaction with your postal operator(s).

1 Irrelevant (IR)

2 Largely irrelevant (LI)

3 Neither relevant nor irrelevant (NR/NI)

4 Relevant (RE)

5 Highly relevant (HR)

Aspect IR LI NR/NI RE HR

1 Speed: directly related to the time established for delivery of mail. This deadline is set in hours or days from the time when the mail is posted.

1 2 3 4 5

2 Security: guaranteeing the physical integrity of mail against theft, rifling, loss and damage.

1 2 3 4 5

3 Access and coverage: capacity to provide services and delivery throughout the national territory (through efficient infrastructure networks).

1 2 3 4 5

4 Reliability: level of certainty that obligations will be fulfilled and service delivery times met.

1 2 3 4 5

5 Price: refers to the monetary value assigned to the provision of the service, based on the value per item sent.

1 2 3 4 5

6 Customer service: refers to the efficiency with which complaints, problems and suggestions are handled.

1 2 3 4 5

7 Returns: refers to the percentage of items that are returned as a result of failure to locate the addressee.

1 2 3 4 5

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16 On a scale of 1 to 10 where 1 is extremely unsatisfied and 10 is extremely satisfied, how satisfied are you with the following aspects of your main operator?

17 Roughly what price do you currently pay per item, per destination? Product Capital and

metropolitan area National International

Letters

Bank statements

Invitations

Printed matter/magazines

Small packets/parcels

Other (please specify) 18 Can you provide an estimate of the number of items your company is likely to send in the next few

years? In three years In five years In 10 years

Number of domestic items

Number of domestic parcels

Number of international letter-post items and parcels

19 Why do you believe it will increase/decrease?

__________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

20 Lastly, what would be your overall rating of the current postal market?

Excellent Good Average Poor

Aspect

1 Speed 1 2 3 4 5 6 7 8 9 10

2 Security 1 2 3 4 5 6 7 8 9 10

3 Access and coverage 1 2 3 4 5 6 7 8 9 10

4 Reliability 1 2 3 4 5 6 7 8 9 10

5 Price 1 2 3 4 5 6 7 8 9 10

6 Customer service 1 2 3 4 5 6 7 8 9 10

7 Returns 1 2 3 4 5 6 7 8 9 10

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Annex 2.5 Personal/telephone survey interview with parcels business customer


Position

Company

Sector

Locality

Telephone Name of interviewer Good morning/afternoon. My name is and I am calling from (regulator, ministry of finance, operator or coordinating body). We are carrying out market research on business logistics services in our country. Given that your business uses these services extensively, we believe that your response will be very useful to us. Your answers will be kept in the strictest confidence and the interview will last just a few minutes. I would be very grateful if you could give me a few minutes of your time. Is now alright for you? (If they say no, ask what day and time they would prefer) 1 Does your business send/deliver packets or parcels as part of its usual business? Yes 1 No 0 Conclude interview 2 For domestic dispatches, does your business's logistics department usually use external vehicles or its

own fleet? (If they answer external or both, ask for details). Own 1 External (specify) Both (specify) 3 In what situation would you use…….. (name the company that was given in q.2).

– Own:

– External: 4 (Only if they use external) Indicate which services the business……….provides (name the company

given in q.2). 1 Storage 5 Collection

2 Inventory management 6 Delivery

3 Billing 7 Invoice checking

4 Recovery 8 Other (specify)

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5 Last year, which delivery service providers did your business work with? Please list them in order from most to least used:

Most used Do not know/No answer (DK/NA)

Second

Third 6 (For those that work with more than one business) Why do you work with more than one business? Services offered

No single business can handle our workload

Because of the area they cover

Trying out options

Other (provide details)

DK/NA 7 How many parcels were sent by your business in the past three years?

2007 2008 2009


Number of international items 8 Roughly how much would you say your business spent on parcel delivery services last year? On domestic items USD (if they cannot remember, ask for a rough estimate in local currency and convert later). Internationally USD (if they cannot remember, ask for a rough estimate in local currency and convert later). Total USD (if they do not answer the above). 9 Please provide us with a rough breakdown of your postal items as per the following:

9.1 Geographical coverage 9.2 Type of delivery

Delivery % Delivery times

1 Non-priority

2 Priority

3 Other(specify)

4 DK/NA

Total 100%

Destination %

1 Capital and metropolitan area

2 Domestic

3 International

4 DK/NA

Total 100%

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10 What content do you send? Make any comments 1 3

2 4 11 Roughly how much do you currently pay to send larger parcels, by weight and distance?

Weight Capital and metropolitan area Domestic International

12 Please use the following scale to indicate how relevant these aspects of the service are to you when

sending parcels:

9.3 Weight of items

Weight %

1 Under 2 kg

2 Between 2 and 5 kg

3 Between 5 and 20 kg

4 Over 20 kg

5 Other (specify)

6 DK/NA

Total 100%

1 Irrelevant (IR)



4 Relevant (RE)


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Let us now turn to your level of satisfaction with your postal operator(s). On a scale of 1 to 10 where 1 is extremely unsatisfied and 10 is extremely satisfied, how satisfied are you with the following aspects of your main operator?

13 Which business is the parcel distribution market leader? 1 2 DK/NA 14 Of these businesses, which is the most reliable? 1 2 DK/NA 15 And the least reliable? 1 2 DK/NA



1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5

Aspect

1 Speed 1 2 3 4 5 6 7 8 9 10

2 Security 1 2 3 4 5 6 7 8 9 10

3 Access and coverage 1 2 3 4 5 6 7 8 9 10

4 Reliability 1 2 3 4 5 6 7 8 9 10

5 Price 1 2 3 4 5 6 7 8 9 10

6 Customer service 1 2 3 4 5 6 7 8 9 10

7 Returns 1 2 3 4 5 6 7 8 9 10

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16 Which uses the best technology? 1 2 DK/NA 17 Which is the most socially responsible? 1 2 DK/NA 18 Estimate the number of items your business is likely to send in the next few years: In 3 years In 5 years In 10 years


Number of international parcels 19 What are the reasons for this increase/decrease? _______________________________________________________________________________________ _______________________________________________________________________________________ _______________________________________________________________________________________ _______________________________________________________________________________________ 20 Lastly, how would you rate the current postal market?

Excellent Good Average Poor

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Annex 2.6 Personal or telephone survey interview with operators


Position

Company

Sector

Locality

Telephone Name of interviewer Good morning/afternoon. My name is and I am calling from (regulator, ministry of finance, operator or coordinating body) and we are carrying out market research into postal services in our country. Given that your business uses these services extensively, we believe that your answers will be very useful to us. Your answers will be kept in the strictest confidence and the interview will last just a few minutes. I would be very grateful if you could give me a few minutes of your time. Is now alright for you? (If they say no, ask what day and time they would prefer) 1 Are the postal services provided by your business mainly in the:

Capital and metropolitan area Province/department

National International 2 Where relevant, please indicate the number of branches or offices (provide exact number). Capital and metropolitan area

Province/department

National

International 3 Could you give us an indication as to your regular postal customers? Financial entities (banks and savings banks)

Insurance companies

Telecommunications operators

Energy, electricity and public utilities companies

Publishing sector

Catalogue sales distributors

Direct marketing companies

Government departments

Businesses in other sectors

Private customers Others (specify)

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4 Could you give us an idea of the number of postal items handled by your business in the past three

years? 2007 2008 2009



Number of international letter-post items and parcels

5 Could you give us a rough idea of how much income your business has generated from postal

services in the past three years? 2007 2008 2009

Dollars

(If they cannot remember, ask for a rough estimate) 6 Please provide us with a rough breakdown of your postal items as per the following:

6.1 Geographical coverage 6.2 Type of delivery

Destination % Delivery % Delivery

times

1 Capital and metropolitan area 1 Non-priority

2 National 2 Priority

3 International 3 Other (specify)

4 DK/NA 4 DK/NA


6.3 Content 6.4 Weight of items

Items % Weight

1 Business mail (including invoices)

1 Under 20 grammes

2 Direct mail 2 Between 20 and 100 grammes

3 Postal parcels 3 Between 100 and 500 grammes

4 Personal mail 4 Between 500 and 2,000 grammes

5 Other (specify) 5 Other (specify)

6 DK/NA 6 DK/NA


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7 Please give us an idea of the number of employees in your business, specifying how many are delivery staff (postmen) and how many vehicles your business has.

Employees 2007 2008 2009

Total number

Delivery staff (postmen) Vehicles 2007 2008 2009

Cars and vans

Motorbikes

Lorries 8 Have you made investments in recent years with a view to adapting to technological changes in the

market? If so, please indicate roughly how much you have invested over the past three years (in USD).

Yes No 2007 2008 2009

Investment in technology (approx) 9 Are you planning to make any investments in the near future? If so, what are the estimated amounts

for 2010–2012 and for 2013–2015 (in USD)? Yes No 2010–2012 2013–2015

Investment in Technology 10 Please use the following scale to indicate how relevant the following aspects of the service are to your

customers when sending mail. 1 Irrelevant (IR)



4 Relevant (RE)


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1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5


1 2 3 4 5

11 Can you estimate the number of items your business is likely to send in the next few years? In three years In five years

Number of items 12 How would you rate the current postal market? Excellent Good Fair Poor 13 Which factors will be most affected in the future? Lower prices Development of new products

Improved quality levels

Other (please specify): ______________________________________________________________

_________________________________________________________________________________ 14 Lastly, could you give us an estimate of your business's market share and the value thereof? _______________________________________________________________________________________ _______________________________________________________________________________________ _______________________________________________________________________________________ _______________________________________________________________________________________

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Annex 2.7 Formal letter model for obtaining the information required from the public sector Issued by: Addressed to: Regulatory body/bodies or public enterprises Dear (person's name) (position) (public sector institution to which the letter is addressed),

Several months ago, an inter-institutional working party made up of (add local institutions participating in the proposal), set up under the auspices of the Universal Postal Union (UPU), formulated an integrated postal reform and development plan (IPDP) for this country. Before any government decisions are taken concerning the implementation of actions approved in this plan, a universal postal service proposal, tailored to the country's situation, needs to be prepared. The results of this work will be important, since it involves developing a framework for a viable, state-guaranteed basic postal service that is operationally and financially sustainable and accessible to all citizens. The services provided must be affordable to all and of satisfactory quality. To this end, we require detailed information about the current public sector market and its potential, as this is one of the main sectors affecting the postal market. We are therefore calling on your institution's invaluable cooperation and would ask you to kindly provide the following information. Adapt the information depending on who the letter is addressed to. If it is to a business, request company-specific information and if it is addressed to the regulator, ask for information on all public services regulated by that operator. As regards the information to be collected from each service, refer to Stage Two where the information required from the various public services is set out in detail. Further information on amendments to the regulations which are likely to lead to changes in the short or medium term may also be useful. Yours sincerely,

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Annex 2.8 Formal letter model for obtaining the information required from financial bodies Issued by: Addressed to: Financial sector regulatory body/bodies Dear (person's name) (position) (financial sector institution to which the letter is addressed), Several months ago an inter-institutional working party made up of (add local institutions participating in the proposal), set up under the auspices of the Universal Postal Union (UPU), formulated an integrated postal reform and development plan (IPDP) for this country. Before any government decisions are taken concerning the implementation of the actions approved in this plan, a universal postal service proposal, tailored to the country's situation, needs to be prepared. The results of this work will be important, since it involves developing a framework for a viable, state-guaranteed basic postal service that is operationally and financially sustainable and accessible to all citizens. The services provided must be affordable to all and of satisfactory quality. To this end, we require detailed information about the current financial market and its potential, as this is one of the main sectors affecting the postal market. We are therefore calling on your institution's invaluable cooperation and would ask you to kindly provide the following information. The number of active accounts in the financial system and the duty of ensuring regular communication for each service:

– Current accounts

– Credit cards

– Savings accounts

– Loan repayment accounts (mortgage or business)

– Pension fund accounts Further information on amendments to the regulations which are likely to lead to changes in the short or medium term may also be useful. Yours sincerely,

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Annex 2.9 Market surveys, interviews and questionnaires 1 Preparing the questionnaire and guide to topics Once the data sources have been established, the questionnaire should be prepared, taking into account the characteristics of the chosen source. This is extremely important because a well-drafted questionnaire will remove, or at least reduce, many of the common causes of survey failure. The questionnaire should not only ensure that the information is gathered correctly, but should also facilitate quantitative handling of the data, insofar as possible, as guides to topics will be set out in the qualitative studies. There are two aspects which need to be taken into account: – The questionnaire is the point of communication between the interviewer and the interviewee; thus it

is important that it provide an easy and accurate means of communication between the interviewer and the interviewee, without giving rise to errors of interpretation, ensuring that all the objectives are met.

– The questionnaire is also a form on which information and data are recorded, which is why the tabling and format will be established during the preparation phase, thereby ensuring that the data processing is kept simple. Likewise, experience suggests that "pretests" or pilot surveys should be carried out to test the questionnaire, even after the necessary studies.

A good questionnaire should contain the following:

– Clear language. Clear terms must be used, to avoid errors of interpretation.

– Easy answers. To prevent inaccuracies due to fatigue, the questions must be worded so as to facilitate simple answers.

– Avoid troublesome questions as far as possible. If they must be asked, it must be in the spirit of the survey.

– No influence on the answer. Interviewees must be given free rein to choose their answer without being influenced in any way by the interviewer.

Different types of questions may be asked within the questionnaire:

– Open and closed. Open questions can be answered freely. With closed questions, interviewees choose one or several answers.

– Ordering questions. The interviewee is asked to place the answers in order according to criteria.

– Clustered questions. A set of questions which actually constitute a single question, with the aim of obtaining a specific response.

– Prospecting questions. The interviewee is asked their opinion on a person, brand or situation that they are shown.

– Control questions. Provide an idea of the truth and sincerity of the survey carried out. It is worth including one or two in every questionnaire. Should false information be given in response to the control questions, the questionnaire must be discounted.

A survey template will be provided for customers and operators alike. 2 Conduct of surveys It is recommended that a pilot survey be carried out before the fieldwork proper begins, as it will serve to test both the working materials (questionnaires, directions, instructions) and the general organization, level of aptitude and training of the interviewers. All staff must be efficient and well-prepared, including interviewers, group leaders and supervisors or inspectors. Members of the research team must be trained for this survey as their influence on the studies is huge, to the extent that no matter how targeted the survey may be, if the staff are not competent the results may be distorted.

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When selecting and recruiting staff, it is important to define the requirements and personality of the ideal candidates. Many characteristics will depend on the type of studies to be carried out. This applies to age, technical and cultural knowledge, etc.; however, there are some traits which will prove essential:

– Ability to work in a methodical and ordered manner. Should be able to capture details on the reliability of the interviewee, as well as other external factors.

– Sincerity. The work is always fairly flexible, and sincerity and responsibility are important when appointing potential candidates.

– Positive presence. Must have a pleasant demeanour. It is recommended that there be a group leader for approximately every five interviewers, whose task is to provide support in some interviews, to check the quality of work and correct where necessary, to carry out the more difficult and delicate visits and, finally, to review the forms in the first instance. 3 Telephone surveys The information should be obtained by means of a telephone conversation between the interviewer and the person selected. There are two types of telephone interview:

– Traditional telephone interview: an updated list of telephone numbers of the sample will be used for the calls, and the questionnaire will be filled in manually.

– Computer-assisted telephone interviewing (CATI): a computer system will be used to randomly select and make the calls. It allows the interviewer to complete the questionnaire with the help of a computer.

During the telephone survey, it is essential to check that the sample is representative of the population being researched. One essential way of achieving this involves adapting the times of calls to the habits of the interviewees. Advantages

– Works out cheaper if the sample covers a broad geographic area.

– Very quick. The system allows a high number of surveys to be carried out every day.

– High response rate.

– The process of selecting, training and monitoring telephone interviewers is simple. Limitations

– Requires lists of telephone numbers of the target population.

– Only people with a phone can be interviewed.

– The questionnaire must be brief, simple and with no open questions.

– No support material may be used.

– Data cannot not be obtained from observation. 4 Postal surveys Information is collected from a questionnaire sent by post. In this case, the interviewee responds to the questionnaire directly and there is no direct communication between the interviewer and the interviewee. With the aim of motivating the interviewee, an introductory letter should be attached to "replace" the interviewer.

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There are various types of postal survey:

– Traditional postal survey: the questionnaire is sent and collected through the traditional postal system. A stamped addressed envelope must be included in order to facilitate a response from the interviewee.

– Combined postal survey: the questionnaire is sometimes sent under cover of a product or a magazine, for example, together with a request for it to be returned by post.

– Fax survey: the questionnaire is sent and received via fax. A telephone introduction will be necessary beforehand, in order to motivate and advise the interviewee.

– E-mail survey: using new technologies to carry out the survey. An updated e-mail address list for the relevant people will be required.

Advantages – It is cheap when the sample is small and not spread over large distances. – Eliminates distortion caused by the interviewer. – The questionnaires returned generally come from genuinely motivated interviewees who answer

accurately and truthfully.

– New communications technologies facilitate the field-work and increase the motivation of interviewees.

Limitations

– Low response rate. The postal survey would normally be used when the target population has a certain interest in the results of the research and is happy to collaborate.

– Problems in finding updated postal or e-mail addresses.

– Reduced representation of the sample in some cases.

– Neither the interviewee nor their influence on others can be checked.

– No support materials may be used.

– Given that there is no interviewer to solve problems, there is a higher number of unusable question-naires.

– The questionnaires must not be too long. 5 Introductory letter Given that there is no personal contact between the interviewer and the interviewee, the introductory letter is the core link between the two. The following points must be mentioned in the introductory letter: – Introduction: of the organization carrying out the research and the aim thereof. – Advice: guidelines on answering and returning the questionnaire. – Motivation: it is essential that interviewees understand the importance of their answers, and that they

be given the guarantee that their answers will be handled anonymously. The benefits of the study should be highlighted and, where possible, some form of compensation should be provided for the interviewee.

Given the importance of the introductory letter, particular care should be taken with its drafting and presentation. It is advisable that it be nominally addressed to the recipient and personally signed by the research director. 6 Type of survey One issue which may arise for the researcher is which type of survey to use; certain criteria should be borne in mind when deciding. These criteria relate to the nature of the research, the technique itself, the sample and the tasks performed by the sample and the researchers.

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Aspects for consideration include: – Complexity of information: when the information required is complex, the telephone interview is not

the most suitable form because the questions are brief and simple. The in-home survey would be best as it is longer and the interviewer can clear up any doubts regarding more complex questions.

– Monitoring of interviewers: the interviewers could make up the answers to the questionnaires, so they must be monitored by the companies carrying out the market research. • During the home survey, the interviewee is asked for their first name and telephone number. If

interviews are carried out in shopping centres, they may be observed. • By means of the CATI system, results can be disaggregated by interviewer or time when the

information was obtained, as all the data are stored on a computer. – Volume of information to be collected: the more the information required, the less suitable the tele-

phone interview becomes. Where more information is required, the questionnaire's scope is broader and it is advisable to use postal or home surveys.

– Cost: home surveys are the most expensive option, while telephone surveys and collecting data in other establishments are of average cost. In theory, postal surveys should engender the lowest costs.

– Ease of gathering information: the home survey requires the most effort. Interviewers must travel, which also engenders costs. Neither telephone nor postal interviews entail travel, which is minimal in the case of surveys in other establishments or workplaces.

– Ease of handling information: with postal surveys, or surveys at home or in establishments, the data must be recorded on a computer. However, the CATI means the data are recorded on a computer as soon as they are obtained.

– Urgency: the postal survey is very slow, (the process lasts almost a month). The telephone interview is quickest, as it can yield results in hours. The home survey is also a long process, due to the questionnaire response time, as well as to the travelling time.

– Time of year: customers' behaviour varies depending on the time of year. The home survey would not be suitable at Christmas, New Year or during holiday periods.

– Geographical area: when research covers a broad geographical area, the home survey is slow and expensive. In these cases, telephone and postal surveys are the best options as they reach more places and at a relatively low cost.

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Annex 2.10 Cost structure model A. Cost structure – national post National Post from 1.1 to 2.2. Urban Post from (1.1 to 1.3), (1.9 to 1.11) and (2.1 to 2.2) 1 Operational costs

Origin

1.1 Acceptance at origin

1.1.1 Staff

1.1.1.1 Receipt at counters

1.1.1.2 Collection from counters

1.1.1.3 Dispatch of items

1.1.1.4 Administration of acceptance

1.1.2 Postal materials and supplies

1.1.3 Other operational expenditure

1.1.3.1 Leasing

1.1.3.2 Public services

1.1.3.3 Cleaning and other materials

1.1.3.4 Taxes and other expenses

1.2 Transport from acceptance to sorting (urban)

1.2.1 Drivers

1.2.2 Vehicle depreciation (urban)

1.2.3 Costs of operation, maintenance and repairs

1.3 Sorting at origin

1.3.1 Staff

– Receipt

– Opening times

– Sorting

– Dispatch

– Monitoring

– Administration of sorting at origin

1.3.2 Materials and postal supplies at sorting (Bags, labels, fasteners, tags, stationery, etc.)

1.3.3 Other operating expenses (see 1.1.3.)

1.4 Transport to airport (see 1.2.) (where relevant)

1.5 Airport operations

– Receipt and dispatch staff

– Other expenses (materials and operations at the airport)

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1.6 Transport at destination

– Air (value per kilo: value per item or items per kilo)

– Land (see above)

Destination

1.7 Receipt at destination – Airport (see 1.5)

Receipt at destination – Transport hub

+

Transport to destination sorting office (see 1.2)

1.8 Sorting at destination (see 1.3)

1.9 Transport to delivery (see 1.2)

1.10 Delivery

a Postmen–addresses 80%

b P.O. Box 20%

1.10.1 Staff

– Postmen

– Office support staff

– Monitoring

– Delivery administration

1.10.2 Costs of materials and postal supplies for delivery

1.10.3 Other operating expenses (see 1.1.3.)

2 General administration costs (indirect costs)

2.1 Regional management and general administrative costs (charge per item/according to number of items)

2.2 Central hub regional management and general administrative costs (charge per item/according to number of items)

B. Cost structure – international post 1 Operating costs in respect of outbound mail

1.1 to 1.7 and 2.1 to 2.2

Plus costs in country of destination or terminal dues

2 Operating costs in respect of inbound mail

Airport operations

– Receipt and dispatch staff

– Other expenses (materials and operations at the airport)

2.2 Transport from airport to sorting (urban)

2.2.1 Drivers

2.2.2 Vehicle depreciation (urban)

2.2.3 Costs of operation, maintenance and repairs

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2.3 Sorting

2.3.1 Staff

– Receipt

– Opening

– Sorting

– Dispatch

– Monitoring

– Administration of sorting at origin

2.3.2 Materials and postal supplies at sorting (bags, labels, fasteners, tags, stationery, etc.)

2.3.3 Other operating expenses (see 1.1.3)

2.4 Transport to destination

– Air (value per kilo: value per item or items per kilo)

– Land (see above)

1.7 to 1.10 and 2.1 to 2.2

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Annex 2.11 Model schedule for obtaining information Obtaining information (table of information required for calculating the costs of the universal postal service)

No. Information Person responsible Deadline

1 General country information

2 Information on current conditions of basic service provision

3 Data on operational volumes

4 Total annual income and expenditure

5 Staffing costs

6 Information on other annual expenditure

7 Annual investments

8 Income from annual sales of services

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Annex 2.12 Calculation of unit costs There is an exercise for calculating a standard unit cost, using a process based on the average price. It is estimated that the average price varies between 0.29 and 0.41 USD. This price may seem high, but it is an average for 20-gramme letters and heavier items. The price is calculated as follows:

Price = Costs + Profit

This gives us the total unit cost. Most designated operators are non-profit state entities. Despite the fact that they are created to provide a public service, their work is becoming increasingly similar to that of private enterprises. For the purposes of this calculation, profit is set at 10%. Delivery is shown in the following table:

Average price (USD) Costs Profit

0.30 0.26 0.03

0.44 0.38 0.042 The next step is to break down this unit cost for each type of cost. Although the costs vary from country to country depending on the economic environment, it is possible to carry out a cost distribution exercise. Let us take the real case of a Latin American country in column 2. Column 3 contains a preliminary proposal, while column 4 (proposal 2) is the result of analysis of the first two columns. The table is as follows:

Type of costs Percentage Country A

Percentage Proposal 1

Percentage Proposal 2

Direct costs of operational process 78% 54% 70%

Direct costs of materials and supplies for operational use

2% 4.5% 5%

Direct costs of materials and supplies for operational use (electricity, water, telephone, security, cleaning, etc.)

6% 3.5% 7%

Direct and indirect administrative costs (support areas and central and regional administration).

8% 8% 8%

Taxes 7% 30% 10% Direct costs of operational process In the first proposal, these costs stand at 54%. However, given that this includes the payment of operational staff as well as transport, it is in fact quite low. A more realistic proposal would be 70%.

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Direct costs of materials and supplies for operational use This is traditionally an area of high expenditure. However, it is where the greatest savings can be made, as savings on staff entail dismissals, something very difficult for state institutions like most Posts. It is difficult to cut taxes and save on operational supplies as these costs are constantly on the rise. In fact, designated operators tend to set up measures to streamline these costs, as well as to recycle materials. 5% is proposed. Direct costs of materials and supplies for operational use Given that this area is increasing significantly year on year, 7% is proposed. Direct and indirect administrative costs 8% is considered to be acceptable. Taxes The 30% in proposal 1 is considered disproportionate. In some countries the price includes VAT, but not everywhere, and this figure is extremely high. On the other hand, income tax is calculated at the end of the financial year, and if the profit margin is 10%, after transferring VAT and other taxes, it will never exceed this figure. The sum of the taxes which may be incurred over the different stages is much less. 10% would be a high estimate. For the previous two average prices, the costs can be broken down as shown in the following table: Type of costs Percentage of

the total Price

0.29 USD Price

0.42 USD

Direct costs of operational process 70% 0.182 0.266

Direct costs of materials and supplies for opera-tional use

5% 0.013 0.019

Direct costs of materials and supplies for opera-tional use (electricity, water, telephone, security, cleaning, etc.)

7% 0.018 0.027

Direct and indirect administrative costs (support areas and central and regional administration).

8% 0.021 0.030

Taxes 10% 0.026 0.038 Unit cost by stage When calculating the unit cost by stage, the following breakdown is used:

Cost by stage Percentage

Acceptance 21%

Transport 18%

Sorting 12%

Delivery 44%

Other 5% However, these costs are exclusive to operations. The designated operator, like any operator, will incur other costs such as administrative costs and depreciations on investments (amortization).

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The costs are broken down as follows:

Type of cost Percentage

Operational costs 78%

Administrative costs 17%

Depreciation on investment (amortization) 5% The unit costs for an average price of 0.36 USD will therefore be as follows:

Concept Cost of opera-tional process

Total cost of service



Sorting 18% 14.0% 4.48

Transport 12% 9.4% 3.01

Delivery 44% 34.3% 10.97



Amortization of investment 5.0% 1.60

Total 100 32.00

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Annex 2.13 Adjustment factor table Market share of designated operator

Adjustment factor

Standard cost

Low scenario Average scenario High scenario

Letters Parcels Letters Parcels Letters Parcels

100 1.00 0.26 3.20 0.32 4.00 0.38 5.00

99 1.01 0.26 3.23 0.32 4.04 0.38 5.05

98 1.02 0.27 3.26 0.33 4.08 0.39 5.10

97 1.03 0.27 3.30 0.33 4.12 0.39 5.15

96 1.04 0.27 3.33 0.33 4.16 0.40 5.20

95 1.05 0.27 3.36 0.34 4.20 0.40 5.25

94 1.06 0.28 3.39 0.34 4.24 0.40 5.30

93 1.07 0.28 3.42 0.34 4.28 0.41 5.35

92 1.08 0.28 3.46 0.35 4.32 0.41 5.40

91 1.09 0.28 3.49 0.35 4.36 0.41 5.45

90 1.10 0.29 3.52 0.35 4.40 0.42 5.50

89 1.11 0.29 3.55 0.36 4.44 0.42 5.55

88 1.12 0.29 3.58 0.36 4.48 0.43 5.60

87 1.13 0.29 3.62 0.36 4.52 0.43 5.65

86 1.14 0.30 3.65 0.36 4.56 0.43 5.70

85 1.15 0.30 3.68 0.37 4.60 0.44 5.75

84 1.16 0.30 3.71 0.37 4.64 0.44 5.80

83 1.17 030 3.74 0.37 4.68 0.44 5.85

82 1.18 0.31 3.78 0.38 4.72 0.45 5.90

81 1.19 0.31 3.81 0.38 4.76 0.45 5.95

80 1.20 0.31 3.84 0.38 4.80 0.46 6.00

79 1.21 0.31 3.87 0.39 4.84 0.46 6.05

78 1.22 0.32 3.90 0.39 4.88 0.46 6.10

77 1.23 0.32 3.94 0.39 4.92 0.47 6.15

76 1.24 0.32 3.97 0.40 4.96 0.47 6.20

75 1.25 0.33 4.00 0.40 5.00 0.48 6.25

74 1.26 0.33 4.03 0.40 5.04 0.48 6.30

73 1.27 0.33 4.06 0.41 5.08 0.48 6.35

72 1.28 0.33 4.10 0.41 5.12 0.49 6.40

71 1.29 0.34 4.13 0.41 5.16 0.49 6.45

70 1.30 0.34 4.16 0.42 5.20 0.49 6.50

69 1.31 0.34 4.19 0.42 5.24 0.50 6.55

68 1.32 0.34 4.22 0.42 5.28 0.50 6.60

67 1.33 0.35 4.26 0.43 5.32 0.51 6.65

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Market share of designated operator

Adjustment factor

Standard cost



66 1.34 0.35 4.29 0.43 5.36 0.51 6.70

65 1.35 0.35 4.32 0.43 5.40 0.51 6.75

64 1.36 0.35 4.35 0.44 5.44 0.52 6.80

63 1.37 0.36 4.38 0.44 5.48 0.52 6.85

62 1.38 0.36 4.42 0.44 5.52 0.52 6.90

61 1.39 0.36 4.45 0.44 5.56 0.53 6.95

60 1.40 0.36 4.48 0.45 5.60 0.53 7.00

59 1.41 0.37 4.51 0.45 5.64 0.54 7.05

58 1.42 0.37 4.54 0.45 5.68 0.54 7.10

57 1.43 0.37 4.58 0.46 5.72 0.54 7.15

56 1.44 0.37 4.61 0.46 5.76 0.55 7.20

55 1.45 0.38 4.64 0.46 5.80 0.55 7.25

54 1.46 0.38 4.67 0.47 5.84 0.55 7.30

53 1.47 0.38 4.70 0.47 5.88 0.56 7.35

52 1.48 0.38 4.74 0.47 5.92 0.56 7.40

51 1.49 0.39 4.77 0.48 5.96 0.57 7.45

50 1.50 0.39 4.80 0.48 6.00 0.57 7.50

49 1.52 0.40 4.86 0.49 6.08 0.58 7.60

48 1.54 0.40 4.93 0.49 6.16 0.59 7.70

47 156 0.41 4.99 0.50 6.24 0.59 7.80

46 1.58 0.41 5.06 0.51 6.32 0.60 7.90

45 1.60 0.42 5.12 0.51 6.40 0.61 8.00

44 1.62 0.42 5.18 0.52 6.48 0.62 8.10

43 1.64 0.43 5.25 0.52 6.56 0.62 8.20

42 1.66 0.43 5.31 053 6.64 0.63 8.30

41 1.68 0.44 5.38 0.54 6.72 0.64 8.40

40 1.70 0.44 5.44 0.54 6.80 0.65 8.50

39 1.72 0.45 5.50 0.55 6.88 0.65 8.60

38 1.74 0.45 5.57 0.56 6.96 0.66 8.70

37 1.76 0.46 5.63 0.56 7.04 0.67 8.80

36 1.78 0.46 5.70 0.57 7.12 0.68 8.90

35 1.80 0.47 5.76 0.58 7.20 0.68 9.00

34 1.82 0.47 5.82 0.58 7.28 0.69 9.10

33 1.84 0.48 5.89 0.59 7.36 0.70 9.20

32 1.86 0.48 5.95 0.60 7.44 0.71 9.30

31 1.88 0.49 6.02 0.60 7.52 0.71 9.40

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Market share of designated operator

Adjustment factor

Standard cost



30 1.90 0.49 6.08 0.61 7.60 0.72 9.50

29 1.92 0.50 6.14 061 7.68 0.73 9.60

28 1.94 0.50 6.21 0.62 7.76 0.74 9.70

27 1.96 0.51 6.27 0.63 7.84 0.74 9.80

26 1.98 0.51 6.34 0.63 7.92 0.75 9.90

25 2.00 0.52 6.40 0.64 8.00 0.76 10.00

24 2.03 0.53 6.50 0.65 8.12 0.77 10.15

23 2.06 0.54 6.59 0.66 8.24 0.78 10.30

22 2.09 0.54 6.69 0.67 8.36 0.79 10.45

21 2.12 0.55 6.78 0.68 8.48 0.81 10.60

20 2.15 0.56 6.88 0.69 8.60 0.82 10.75

19 2.18 0.57 6.98 0.70 8.72 0.83 10.90

18 2.21 0.57 7.07 0.71 8.84 0.84 11.05

17 2.24 0.58 7.17 0.72 8.96 0.85 11.20

16 2.27 0.59 7.26 0.73 9.08 0.86 11.35

15 2.30 0.60 7.36 0.74 9.20 0.87 11.50

14 2.33 0.61 7.46 0.75 9.32 0.89 11.65

13 2.36 0.61 7.55 0.76 9.44 0.90 11.80

12 2.39 0.62 7.65 0.76 9.56 0.91 11.95

11 2.42 0.63 7.74 0.77 9.68 0.92 12.10

10 2.45 0.64 7.84 0.78 9.80 0.93 12.25

9 2.48 0.64 7.94 0.79 9.92 0.94 12.40

8 2.51 0.65 8.03 0.80 1.04 0.95 12.55

7 2.54 0.66 8.13 0.81 10.16 0.97 12.70

6 2.57 0.67 8.22 0.82 10.28 0.98 12.85

5 2.60 0.68 8.32 0.83 10.40 0.99 13.00

4 2.63 0.68 8.42 0.84 10.52 1.00 13.15

3 2.66 0.69 8.51 0.85 10.64 1.01 13.30

2 2.69 0.70 8.61 0.86 10.76 1.02 13.45

1 2.72 0.71 8.70 0.87 10.88 1.03 13.60

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Stage three – Definition of scenarios and simulations

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A. Scenarios A scenario is a description of a situation which may arise. It is not a prediction of the future. Scenarios are situations with set conditions, based on trends and potential events which may yield certain results. They are helpful when it comes to choosing strategies, identifying future prospects and raising awareness about uncertainties. Scenarios are used to explore various future possibilities. This tool may be used to test the stability of the current strategy, to develop new policies to tackle the coming challenges and to increase an organization's chances of success in an unclear future. Designing a scenario is a very specific task. Strategy experts may propose various methods of analyzing scenarios as there is no standard model. Furthermore, the changing and sometimes almost intuitive nature of scenarios makes it difficult to standardize the process of creating and developing a vision of the future. Often the results are awash with rhetoric and ambiguous statements which cloud their actual implementation, particularly in practical business cases. Characteristics of scenarios While the terms "scenario" and "scenario analysis" involve very different things, they are actually fairly similar when viewed from a global standpoint. Most scenario analyses encompass one or more of the following features:

– Dynamic descriptions: generally designed to offer a realistic portrayal of a potential future situation. Set in a specific context which may be based on statistical estimates. Provide a perfectly structured argument from start to finish.

– Multi-dimensional nature. Often, several possible eventualities are hatched from the same situation; the advantage thereof being the contrast and scope of ideas. The statistical and quantitative focus gives rise to a similar outcome through the various types of "sensitivity analysis", which calculate fluctuations that may morph into results, depending on how the variables are calculated. However, qualitative analysis of the future goes further, given that it not only takes into account the inexact nature of calculations, but also offers plausible alternatives.

– Journey from the present to the future. The scenarios endeavour to paint a picture of the future, as well as tracing the route that the present situation will take to get there. The aim is to draw links between a series of inter-related events, which develop based on a set sequence.

Steps to designing a scenario Although the future enterprise scenario has some set features related to the nature of business to be under-taken, most scenarios will develop along the following lines:

i Create a list of trends. First and foremost, the fundamental aspects likely to affect the development of the situation in question must be identified. This information can be obtained from experts in the field or through published sources reflecting the key trends. Most analyses deal with the surrounding factors and strategic actions to be undertaken by the stakeholders.

ii Grouping the variables. In the second step, the scenario design process pools the key aspects in structured groUniversal Postal Service, with the aim of subsequently grouping the various potential scenarios. The groUniversal Postal Service may vary. For example, some experts simply look subjectively for links between the trends and variables and endeavour to ascertain where the connections lie. Other specialists prefer a more systematic grouping. This system groUniversal Postal Service the variables according to their impact on the future and inherent levels of uncertainty.

iii Design. The third step is the actual design of the scenarios. Therein lies the crux of the entire process. This step includes aspects such as the number of ideas to be put forward or the subjects to be prioritized, which then form the basis of the draft.

Number of scenarios One tricky issue when designing a future scenario is establishing how many scenarios should be developed. Three is generally advisable, although more recent trends point to between two and five as being a justifiable margin.

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Analysis How is a scenario analysis carried out?

i Decide on the question to be answered in the analysis: the more detailed the question, the more useful it will be for the scenarios. Questions should include what, where and when.

ii Factors of influence: draw up a list of all the factors that may affect the study in the given time and place. These factors may be industrial, political, economic or technological. Brainstorming is one recommended technique here.

iii Main uncertainties: the factors of influence should be divided into two columns. The greatest uncertainties should be noted in one column, and the less important and more predictable factors in the other. This pinpoints the unpredictable driving forces.

iv Choose the uncertainties: two of the most critical key forces must be chosen.

v Identify the extremes: the variables chosen should be listed in an XY diagram, indicating at each end how this uncertainty may vary. E.g. economic situation: At one end (-∞) write "good, rich…" and at the other (+∞) write "bad, poor…"

vi Define the scenarios: generally speaking, two to four scenarios should be defined. In each table, list the possible outcomes of the situation.

vii Assign a title to each scenario: where possible, a title should be given to each scenario, so that it can be quickly identified.

viii Select the scenario: the most suitable scenario, or the one with the best outcome, should be chosen. 1 Determining factors and elements of scenarios Once all the information regarding the market, costs and current service offering has been pooled, together with the future needs and projections, the working team should draw up detailed conclusions on the visible needs and conditions with respect to the provision of services in the country. These results must be taken into account when comparing the various standards set by the Universal Postal Union. In order to follow an ordered working methodology, the team must first recall the fixed and variable factors and elements of the universal postal service where decisions need to be taken. The following key elements and factors must be included when designing a scenario:

– types of basic services;

– conditions of access (geographic and demographic);

– conditions of regular access for sending and receiving items;

– delivery times and reliability thereof;

– security of items;

– handling of inquiries, complaints and user information;

– investment in setting up acceptance points throughout the national postal network;

– investment in modernizing operational procedures;

– unit cost of letter-post and parcels services;

– prices of basic postal services;

– postal acceptance network (acceptance points or offices);

– sorting network (sorting centres);

– mail delivery network (postmen);

– transport networks. A detailed description of the aforementioned elements and factors of the current situation is also essential, given that the "current situation" will form an additional reference scenario for comparison.

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While the scenarios defined for simulation should always propose better outcomes than the current situation, these should not be viewed as simply an improved version of the current situation. The scenarios may be very different to the current situation, as regards both the set of conditions and each of the elements and factors under consideration. To facilitate this task, a list of conditions and elements of the current situation is included in Annex 3.1. This is a reference tool which the team can amend according to the specific country circumstances. 2 Definition of scenarios Once the team has obtained and organized all the available information and defined the elements for consideration in the simulations, it will be in a position to develop each of the scenarios, not forgetting the current situation. To facilitate decisions, three simulation scenarios should be sufficient. The model used in this guide (section D of the second stage) is based on a standard unit cost, which greatly simplifies the handling of variables. The three recommended scenarios consider firstly a situation involving a high level of conditions, then a medium situation and, lastly, a situation of low levels, which is easier to attain than the first two. The following scenarios are proposed:

– High scenario: ideal conditions of service provision, where ease of access is high, as are quality of service levels and other factors. The services included in the universal postal service are the minimum basic services.

– Medium scenario: medium-level conditions of service provision. Access facilities for sending and receiving items, as well as quality and other factors, are at average levels compared to other scenar-ios. The medium level is satisfactory in terms of facilities and quality. The services included in the universal postal service are the minimum basic services.

– Low scenario: conditions of service provision are lower than for the other scenarios, without entailing unacceptable levels of geographic or demographic ease of access, availability, quality of delivery times, reliability or other determining factors. The services included in the universal postal service are the same as for the high and medium services.

– Current situation: although not a future scenario, it should be considered, defined and specified in the same way as the simulated scenarios so that comparisons and references can be made, both for the set of conditions and individually for each fixed or variable element under consideration.

In order to facilitate decisions relating to the design and specification of the elements in each scenario, there follows a table covering the three scenarios – high, middle and low – with the basic information in this regard. The costs and standard prices of 20 g letters and 3 kg parcels are included for each case. Also included are investments, both in relation to the acceptance network infrastructure (points of sale) and to the moderniza-tion of operations, so that the designated operator can use efficient, modern processes in the cost calculation model, together with the standard cost (featuring standardized and monitored processes, with high quality results). In the structure of the standard unit cost, a cost of 5% of the total is considered; this being the amortization cost of the investment in process modernization. This line in the standard unit cost corresponds to a variable investment in accordance with the volume of basic services in the market (10 million USD invested for every 50 million items per year in the market). This investment is considered to be a soft loan from the multilateral bank over 15 years, with annual interest rates of 2 to 4% and five years payment-free. The number of people considered in the network for each scenario is derived from the percentage of geo-graphic and demographic coverage for each scenario. The acceptance and process logistics networks (sorting, delivery and transport) depend on the number of localities (municipalities) and the number of points (in large cities there are multiple offices). The costs of these networks are included in the standard unit cost.

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When considering a country case the team may make reasonable adaptations to the figures of the variables for the three scenarios, given that they are designed according to standardized behaviour and thus ensure sufficient wiggle room. Definition of scenarios

Element Variable Conditions in respect of each scenario

"Low" "Medium" "High"

Services Type of service Minimum basic services

Minimum basic services

Minimum basic services

Letter post and parcels Letter post and parcels Letter post and parcels

UPU Convention UPU Convention UPU Convention

Access Geographic coverage

85% of territory 90% of territory 95% of territory

Demographic coverage

90% of the population 93% of the population 95% of the population

Frequency of dispatch of mail

Five days a week Five days a week Five days a week

Six hours a day > 20,000 inhabitants

Eight hours a day > 20,000 inhabitants


Three hours a day < 20,000 inhabitants

Four hours a day < 20,000 inhabitants


Frequency of receipt/ collection of mail

Five days a week Five days a week Six days a week

Six hours a day > 20,000 inhabitants



Three hours a day < 20,000 inhabitants



Quality Delivery time J+4 J+3 J+2

Reliability 95% 95% 97%

Security Acceptable < 1 per 10,000 items

Acceptable < 1 per 10,000 items

Acceptable < 1 per 10,000 items

Responsibility/liability

Acceptable – Response within 10 days

Acceptable – Response within 10 days

Acceptable – Response within seven days

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Definition of scenarios

Element Variable Conditions in respect of each scenario

"Low" "Medium" "High"

Other conditions

Area of acceptance point

12–20 m2 12–20 m2 15–25 m2

Rented in localities with more than 60,000 inhabitants



Contracts with third parties in localities with fewer than 60,000 inhabitants



Acceptance staff Own premises > 60,000 inhabitants

Own premises > 60,000 inhabitants





Transport Third parties Third parties Third parties

Operations Own premises > 60,000 inhabitants



Third parties < 60,000 inhabitants



Investment – Installation of acceptance points

6,000 USD per point 6,000 USD per point 6,000 USD per point

Investment – Modernization of operational processes

5% of standard unit cost



Cost – Letter post 0.26 USD 0.32 USD 0.38 USD

Cost – Parcels 3.20 USD 4.00 USD 5.00 USD

Price – Letter post 0.30 USD 0.37 USD 0.44 USD

Price – Parcels 3.68 USD 4.60 USD 5.75 USD B. Simulations Another useful planning tool involves simulating processes. In this phase, simulations will be carried out, thereby providing more elements for consideration when deciding on the most suitable universal postal service proposal. A simulation involves a simple process, generally a mathematical model depicting a more complicated pro-cedure. Analysis of characteristics and responses to different strategies improves understanding and assists with the decision-making process. Annex 3.2 contains the various stages of a simulation study. The most important issue here is awareness of the implications of establishing a universal postal service in the country.

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When taking a decision on defining the universal postal service, certain points must be considered, including the following:

– Costs: The costs involved when establishing a certain level of universal postal service, once the revenue from sales of services has been deducted, and the resulting subsidy required from the state.

– Benefits: The benefits to be gained from establishing a certain level of universal postal service. Whatever the decision taken as to the establishment of the universal postal service, it will have an impact on these two factors. A simulation process may be used to analyze the cost-benefit behaviour. 1 Model used The second stage of the Guide used a much simplified mathematical formula to calculate the costs of the Universal Postal Service:

Cost of universal postal service = Vol1 x CU1 + Vol2 x CU2 + NP x A

V1 is the annual volume of letter-post items handled by the universal postal service operator in the calcula-tion scenario, measured in numbers of items. CU1 is the standard unit cost for a 20 g letter, measured in USD/item45. V2 is the annual volume of packets or postal parcels handled by the universal postal service operator in the calculation scenario, measured in numbers of items. CU2 is the standard unit cost for a packet or parcel with an average weight of 3 kg, measured in USD/item. NP is the number of network access points which the universal postal service operator will have in the cal-culation scenario, measured in service units. A is the annual amortization cost of the investment to install one network service access point, measured in USD/service unit. Therefore, in the simple, basic model, the cost of the universal postal service is equal to the volume of letter-post items multiplied by the standard cost of the letter-post service, plus the volume of parcels multiplied by the standard cost of the parcels service, plus the number of network points multiplied by the annual amortization cost per point. For this cost calculation model, it will be assumed that the main conditions of service provision are included in standardized form. This will enable generalized and simplified calculations to be made (simplified variables and calculation formula). It can therefore be assumed that the behaviour of certain variables (the most complex) will be uniform and predetermined. The simplest variables are access, regularity, opening hours, type of post office or network

45 It is recommended that USD or another major currency be used in order to prevent distortion from possible

devaluation or exchange rate fluctuations.

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point (fixed or mobile), type of network point premises (owned, rented), area of network point premises, operational processes at network points (direct, outsourced) and transport operations (direct, outsourced). The issue of the designated operator's development can also be addressed, by considering whether the universal postal service operator, be it public, private or mixed, needs investment and modernization in order to provide acceptable services which the state is prepared to underwrite. As investments are covered by the operation of services in the market, the government needs only to underwrite the financing, which means there is no burden on public funds. The following investments are included in the model:

a long-term financing for the modernization of postal operations, (soft loan over 15 or 20 years, with a payment-free period of four or five years, at a rate of 4 or 5%), with amortization included in the stan-dard cost per product and per item; and

b investment in the installation of network access points, with annual amortization included in the total annual cost of the universal postal service.

It is assumed that the postal network will rely totally on its points of service to provide the necessary resources to implement the process. Few of the existing network points are considered not to need invest-ment, representing only a small fraction of the overall network. In the model, data on the size of the market are extremely important. The projected volume of basic services corresponding to the universal postal service operator's market share determines the cost, and also the revenue that will cover the cost. The market share that the designated operator anticipates establishing must be based on the national situa-tion, the possible legal framework for the sector, and market practices. The market share assigned to the designated operator is determined in the calculation scenario, which should provide for possible methods of financing and the level of service operation required by the designated operator in order to obtain the revenue needed to cover its costs. By standardizing the variables in the model, the calculation is simplified and ensures that the formula only considers the operations volumes of universal postal service service products, the standard unit costs of these services, the network coverage with the number of points, and the value of the cost of amortization per point. As is clear, the standard cost of each of these services depends on the desired level. If a higher level of universal postal service is required, its standard cost will be greater than that of a low level of universal postal service. To evaluate the costs of the universal postal service, the standard cost of each scenario must be ascer-tained. 2 Definition of standard unit costs for each scenario The standard unit cost is defined in stage two of the guide. The main variables and other important aspects of the model are set out below. High scenario a Access Geographic and demographic coverage Defined by the number of localities with national postal network service points. Defines the geographical area covered and the percentage of the population with access to services. Having defined the localities with universal postal service services, the number of postal network access points is established. It is assumed that 95% of the territory must be covered, as well as 98% of the population.

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Regularity of access for sending and receiving postal items Sending of postal items. Six days a week in localities with over 10,000 inhabitants, with a full day of eight hours. Half a day in localities with less than 10,000 inhabitants. Door-to-door delivery of postal items. Six days a week in localities with over 10,000 inhabitants, with a full day of eight hours. Half a day in localities with less than 10,000 inhabitants. b Quality of service Acceptable quality standard, defined from the technical design process with standardized results across the network. Maximum reliability in the delivery times set by the standard. The delivery times are J+2 with 97% reliability. Security and liability with respect to the services provided, at an acceptable level for the conditions of the operational process and the reliability offered. Acceptable levels of customer satisfaction, as a result of the standardized operation and acceptable quality levels. An acceptable value is one security-related event every 10,000 items and an acceptable claim response time of seven days. c Other operating conditions Surface area of network service point premises: 15 to 25 square metres. Network points in rented premises. It is assumed that all these premises are rented. Outsourced operations, at least at all network points in localities with fewer than 60,000 inhabitants (one net-work point per locality). The cost of installing a network service point is estimated at 6,000 USD, including all necessary postal operations. The value of the annual amortization cost is estimated at 900 USD per year per network access point, over an amortization period of 10 years. Furniture and equipment Estimated value (USD)


IT equipment (PCs, printers, etc.) 1,000


Visual identity 500

Other 300

Total 6,000 Outsourced transport (motor vehicles, motorcycles) Postal operations for the acceptance, sorting, transport and delivery stages, carried out according to a stan-dardized, measured process within set parameters, to produce a daily "zero" balance of items waiting to be processed. Based on an analysis of the different countries in the region, a standard unit cost of 0.38 USD has been estimated for an ordinary letter weighing up to 20 g. However, this cost was calculated on the basis of a "high" level of universal postal service. The following table shows a breakdown of this cost. The second column contains a breakdown of the opera-tional process. In the third column, other costs, such as administrative costs and unit costs for amortizing investments for developing service operations, have been added.

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Heading Cost of operational process

Total service cost



Sorting 18% 14.0% 5.3

Transport 12% 9.4% 3.6

Delivery 44% 34.3% 1.3




Total 100 38.00 Based on an analysis of the different countries in the region, the estimated standard unit cost for ordinary parcels weighing up to 3 kg is 5 USD. The following table shows a breakdown of this cost. The second column contains a breakdown of the opera-tional process. In the third column other costs such as administrative costs and depreciation have been added.


Total cost % Total cost (USD)


Sorting 18% 14.0% 0.7

Transport 12% 9.4% 0.5

Delivery 44% 34.3% 1.7




Total 100 5.00 Medium scenario In the second scenario, the conditions of universal postal service provision vary, as do the costs thereof. The following tables show the estimated variation in costs: a Access Geographic and demographic coverage Defined by the number of localities with national postal network service points. Defines the geographical area covered and the population with access to services. Once the localities with universal postal service services have been defined, the number of postal network access points is established. It is assumed that 90% of the territory must be covered, as well as 93% of the population.

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Regularity of access for sending of and receiving postal items Sending postal items. Five days a week in localities with over 20,000 inhabitants, with a full eight-hour day. Half a day in localities with less than 20,000 inhabitants. Door-to-door delivery of postal items. Five days a week in localities with over 20,000 inhabitants, with a full eight-hour day. Half a day in localities with less than 20,000 inhabitants. b Quality of service Acceptable quality standard, defined from the technical design process with standardized results across the network. Maximum reliability in the delivery times set by the standard. The delivery times are J+3 with 95% reliability. Security and liability with respect to the services provided, at an acceptable level for the conditions of the operational process and the reliability offered. Acceptable levels of customer satisfaction as a result of the standardized operation and acceptable quality levels. An acceptable value of one security-related event per 10,000 items is established and an acceptable claim response time of 10 days. c Other operating conditions Surface area of network service point premises: 12 to 20 square metres. Network points in rented premises. It is assumed that all these premises are rented. Outsourced operations, at least at all network points in localities with fewer than 60,000 inhabitants (one net-work point per locality). The cost of installing a network service point is estimated at 6,000 USD, including all necessary postal operations. The value of the annual amortization cost is estimated at 900 USD per year per network access point, with an amortization period of 10 years. Furniture and equipment Estimated cost (USD)




Visual identity 500

Other 300

Total 6,000 Outsourced transport (motor vehicles, motorcycles). Postal operations for the acceptance, sorting, transport and delivery phases, carried out according to a stan-dardized and measured process within set parameters, to produce a daily '"zero" balance of items to be processed. Based on an analysis of the various countries of the region, a standard unit cost of 0.32 USD has been estimated for an ordinary letter weighing up to 20 g. However, this cost was calculated considering an optimum level of universal postal service. The following table shows a breakdown of this cost. The second column contains a breakdown of the opera-tional process. In the third column, other costs such as administrative costs and unit costs for amortizing investment in developing service operations have been added.

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Heading Cost of opera-tional process

Total service Cost



Sorting 18% 14.0% 6.5

Transport 12% 9.4% 3.01

Delivery 44% 34.3% 10.97




Total 100 32.00 Based on an analysis of the different countries of the region, the estimated standard unit cost for ordinary parcels weighing up to 3 kg is 4 USD. The following table shows a breakdown of this cost. The second column contains a breakdown of the opera-tional process. In the third column, other costs such as administrative costs and depreciation have been added.




Sorting 18% 14.0% 0.56

Transport 12% 9.4% 0.38

Delivery 44% 34.3% 1.37




Total 100 4.00 Low scenario In the third scenario, the conditions of universal postal service provision vary still further. They are minimal and this is reflected in the costs. The following tables show the estimated variation in costs: a Access Geographic and demographic coverage Defined by the number of localities with national postal network service points. Defines the geographical area covered and the population with access to services. Having defined the localities with universal postal service services, the number of postal network access points is established. It is assumed that 85% of the territory must be covered, as well as 90% of the population. Regularity of access for sending and receiving postal items Sending of postal items. Five days a week in localities with over 20,000 inhabitants, with a full six-hour day. Half a day in localities with less than 20,000 inhabitants.

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Door-to-door delivery of postal items. Five days a week in localities with over 20,000 inhabitants, with a full six-hour day. Half a day in localities with less than 20,000 inhabitants. b Quality of service Acceptable quality standard, defined from the technical design process with standardized results across the network. Maximum reliability in the delivery times set by the standard. The delivery time is J+4 with 95% reliability. Security and liability with respect to the services provided, at an acceptable level for the conditions of the operations process and the reliability offered. Acceptable levels of customer satisfaction as a result of the standardized operation and the acceptable quality levels. An acceptable value of one security-related event per 10,000 items is established, and an acceptable claim response time of 10 days. c Other operating conditions Surface area of network service point premises: 12 to 20 square metres. Network points in rented premises. It is assumed that all these premises are rented. Outsourced operations, at least at all network points in localities with fewer than 60,000 inhabitants (one net-work point per locality). The cost of installing a network service point is estimated at 6,000 USD, including all necessary postal operations. The value of the annual amortization cost is estimated at 900 USD per year per network access point, with an amortization period of 10 years.

Furniture and equipment Estimated cost (USD)



Postal equipment (scales, trollies, cancellation machines, etc.) 2,200

Visual identity 500

Other 300

Total 6,000 Outsourced transport (motor vehicles, motorcycles) Postal operations for the acceptance, sorting, transport and delivery phases, carried out according to a stan-dardized and measured process within set parameters, to produce a daily 'zero' balance of items to be proc-essed. Based on analysis of the different countries of the region, the estimated standard unit cost is 0.26 USD for an ordinary letter weighing up to 20 g and 3.20 USD for an ordinary parcel weighing up to 3 kg, as shown in the following two tables.

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For an ordinary 20 g letter Heading Cost of opera-

tional process Total service cost Total cost

(US cents)


Sorting 22% 17.2% 4.46

Transport 22% 17.2% 4.46

Delivery 33% 25.8% 6.70




Total 100 26.00 For an ordinary 3 kg parcel

Heading Cost of opera-tional process %



Sorting 22% 17.2% 0.55

Transport 22% 17.2% 0.55

Delivery 33% 25.8% 0.83




Total 100 3.20 Amortization of investment The cost derived from the amortization is included in the model. In the high scenario, annual amortization is calculated at 900 USD/service unit. It is considered that the total per service unit is the same for all scenarios. The following table summarizes the standard unit costs for each of the scenarios:

Scenario Standard cost of a 20 g letter (USD)

Standard cost of a 3 kg parcel (USD)

Current situation N/A N/A

Low 0.26 3,2

Medium 0.32 4.00

High 0.38 5.00

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The cost models would remain as follows:

Low scenario

Cost of universal postal service = 0.26 Vol1 + 3.2 Vol2 + 900 PoS

Medium scenario

Cost of universal postal service = 0.32 Vol1 + 4 Vol2 + 900 PoS

High scenario

Cost of universal postal service = 0.38 Vol1 + 5 Vol2 + 900 PoS These models apply to the ideal situation, where the designated operator handles all items. In reality this never happens. The less the designated operator is involved, the higher the standard costs (because productivity falls). Annex 2.13 contains the adjustment factors which must be used, together with the standard unit costs for letter-post and parcels depending on the market volume handled by the designated operator. Using the adjustment factor, the model for low service provision conditions would be as follows: Volume handled by des-ignated operator

Cost model – Low

100% Cost of universal postal service = Vol1 x 0.26 USD/item + Vol2 x 3.20 USD/ item + NP x 900 USD/service unit



25% Cost of universal postal service = Vol1 x 0.52 USD/item + Vol2 x 6.4 + NP x 900 USD/service unit

The model for medium service provision conditions would be as follows: Volume handled by des-ignated operator Cost model – Medium


75% Cost of universal postal service = Vol1 x 0.4 USD/item + Vol2 x 5 USD/item + NP x 900 USD/service unit

50% Cost of universal postal service = Vol1 x 0.48 USD/item + Vol2 x 6.0 USD/item + NP x 900 USD/service unit


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The model for high service provision conditions would be as follows: Volume handled by desig-nated operator

Cost model – High

100% Cost of universal postal service = Vol1 x 0.38 USD/item + Vol2 x 5 USD/ item + NP x 900 USD/service unit

75% Cost of universal postal service = Vol1 x 0.475 USD/item + Vol2 x 6.25 USD/item + NP x 900 USD/service unit


25% Cost of universal postal service = Vol1 x 0.76 USD/item + Vol2 x 10 + NP x 900 USD/service unit

3 Expected benefits in each scenario While it is extremely important to establish the costs of the universal postal service, the same strict approach must be used to determine the expected benefits. In the final proposal, which will serve as a basis for the relevant decisions, merely knowing the costs is not sufficient. As it is a public service, the expected benefit of establishing the set level of universal postal service must be quantified. Various indicators should be used, allowing the improvement in the postal service to be measured. These indicators include:

– population covered (acceptance);

– population with home delivery;

– municipalities or localities covered;

– improved quality of service (reduced delivery times, reduced number of irregularities). It is proposed that the following table be used for each of the scenarios: Action Benefit expected Indicator Observations46

Expansion of basic services Service units

Expansion of acceptance net-work

Service units

Expansion of door-to-door delivery network

New delivery offices New postmen

Beneficiaries Number of people, % of total population

Municipalities covered Number of municipalities

Localities covered Number of localities

Reduction in delivery times Days

Drop in the number of irregulari-ties

Number of items

Improvement in customer ser-vice

Users/customers served

Handling of inquiries Percentage of inquiries resolved by the deadline set

46 Include any comments which highlight the importance of this action and clarify any relevant points.

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This table will allow the benefits associated with the various scenarios to be ascertained, and the necessary modifications to be made to ensure the desired objectives are met. 4 Calculations The mathematical model provides for various simulations, namely, calculations for each of the future sce-narios, based on the expected volumes of letters and parcels and the number of service units. It is important that the working team apply the methodology with respect to the various scenarios. The team will need to discuss and evaluate the behaviour of the elements and factors of each scenario, and to make any necessary adaptations. In addition to studying the various scenarios, the local team must take the following into account:

– provision of all basic services at all offices;

– number of offices required to comply with the geographic and demographic coverage of each scenario;

– total volume of letter-post and parcels market;

– current and estimated market share of the designated operator;

– costs of scenarios for the given conditions.

– prices. Once these elements have been identified, the working team should carry out the following calculations: Costs of the universal postal service for each scenario (high, medium, low). Estimated operator revenue, taking into account the prices given (short, medium and long term). For each scenario, the country's surplus or deficit in the short, medium and long term should be forecast.

Result = Operator's income – Cost of the country's universal postal service

C. Economic evaluation of results and funding needs Costs of the universal postal service The team should put forward an acceptable basic services proposal which is adapted to the economic and social needs of society, and to the specific level of development of the country's national postal sector and economy. The service offering is directly linked to the conditions governing the provision and quality of services, while, the costs are also linked to the development of specialized postal technology and to the level of development of the national postal sector. At this stage, the team should have already calculated the costs associated with the various scenarios, and should be able to find a reasonable and viable level for the conditions of service provision, which is accept-able from both an economic and technical standpoint. This information will be useful for analyzing the various forms of financing.

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Sources of funding Before addressing the detailed universal postal service scenario chosen for the country, which requires investment, the working party must be aware of the sustainable sources of funding available. It is therefore essential to identify the sources and variables which would have an impact on the universal postal service.47 1 Operator's own income Information is required on the current situation and any change in income/expenditure generated by the des-ignated operator in service provision, as well as the variables influencing these results.

Economic results (millions of USD)

Heading 2005 2006 2007 2008 2009 2010

Income

Expenditure

Operating result

Subsidies The two variables with an impact on future income should be analyzed: volume of items and unit price. a Volume of each of the postal services The working team must collect information on projections of macroeconomic indicators associated with postal volume increases. This variable will be analyzed based on a stable share in the total volume generated by the postal market.

i Country's economic growth. A country's changing economic situation may be identified through growth in gross domestic product (GDP), which is an essential element in assessing potential postal market growth. The link between GDP and postal market growth is set out in terms of postal volumes and income from operations.

ii Growth in population/number of homes per country. This variable will affect the demand for postal services, as the number of potential users of these services increases.

iii Level of the country's postal development. The important thing to bear in mind here is the disaggre-gated value of each of the services to be included in the universal postal service. This demonstrates the income-generating possibilities of the postal operator.

b The price of each postal service The working team must handle this element carefully, considering the elasticity of demand, especially in competitive services, as a price increase may lead to loss of customers and postal volumes. In order to make forecasts in this area, the team must take account of previous changes, and of variables such as the country's predicted rates of inflation.

47 Alternative sources of funding, such as industry contributions, are not considered for the moment, given the complex and polemic nature of involving private operators, which could hamper the development and implementation of any reform process. Similarly, other temporary sources of funding are not considered, such as financial contributions from the World Bank or other international funding banks, or cooperation funds from international postal organizations.

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NB. – For volume and price factors influencing the potential income of the designated operator, the working party must endeavour to obtain information that is disaggregated by type of service (letters, parcels, etc.), market segment (urban, national and international) and type of customer (private, corporate, institution). c Market share in each segment of the country's postal market When preparing income projections, in addition to the aforementioned traditional variables of volume and price, other commercial factors have a decisive influence. The working team needs to use the information analyzed in the market stage and the volume and value pro-jections, as well as the projections with respect to the institutional, corporate and private customer segments, bearing in mind the level of maturity of these markets. The team should take account of the following:

a Volume of letter-post items handled in the "self-provision" system and annual projection thereof. This is the volume of items which are delivered door-to-door by the staff of utility companies and financial entities. If designated operators were able to improve the quality of provision of these services, they would consolidate and increase their market share in an area involving large volumes of mail. To do so, the working team must establish whether, with the proposed changes to the universal postal service, they would be able to capture these volumes, and at what stage.

b Parcel post. Designated operators in developing countries often have a minimal or practically non-existent market share in this segment. The working team should assess whether the implementation of the proposed universal postal service will allow it to increase its market share, and to what extent.

c Improved competitiveness and positioning in each of the market segments. The working team must assess whether the medium and long term proposals would have a positive impact on the designated operator's brand image and competitiveness, and the extent to which new market share could be cap-tured.

Annexes 3.3 to 3.6 contain template tables which could be used by the working team to draft projections of the designated operator's volumes, income and costs, taking into account the aforementioned variables. Once the projected income and expenditure of the designated operator have been established, forecasts can be made as to the results of the operations and, should those results prove negative, as to the current needs for supplementary funding to cover the costs of service provision if additional investment is not forthcoming. This proposal is based on the scenarios analyzed in the previous stage.

Indicators (thousands of USD) 2010 2011 2012 2013 2014 2015

Income

Expenditure

Operating result 2 Reserved area While reserved services do not make a direct economic contribution, they constitute a very useful mechanism which allows the operator to generate potential additional income that would not otherwise be generated under free competition. In most countries of the world, this model of universal postal service funding is considered to be the most useful, yielding positive results.

Indicators 2005 2006 2007 2008 2009 2010

Rate of inflation ….% ….% ….% ….% ….% ….%

GDP growth rate ….% ….% ….% ….% ….% ….%

Population increase ….% ….% ….% ….% ….% ….%

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The working team may carry out a simulation of the potential volumes and income which could be generated by a protected and efficient reserved area, based on the market exercise in stage two of this guide. Based on this information, the team could make annual projections (using the aforementioned indicators or any other indicator that it may decide on). Indicators (thousands of USD) 2010 2011 2012 2013 2014 2015

Income

Income (reserved area)

Expenditure

Operating result 3 Industry contributions Contributions from industry could be another form of financing, whereby private operators would pay license fees to operate services. This universal postal service funding model, which is expensive and difficult to monitor effectively, has proved unsuccessful in various countries for years. In some cases, operators add a surcharge to the postal tariff, which they then retain and which goes towards funding the universal postal service. The working team may simulate the potential volumes and revenue that could be generated by this type of funding, based on the market exercise in stage two of this guide. Based on this information, the team can make annual projections (using the aforementioned indicators or any other indicators that they may decide on). Indicators (thousands of USD) 2010 2011 2012 2013 2014 2015

Income

Income (industry contribu-tions)

Expenditure

Operating result 4 State contributions The working team should propose this as the least advisable option, whenever developing countries have other priorities and the state has scant resources available. Similarly, this is an unreliable way of securing funding over time, and is at the mercy of political change. It also runs counter to the aim of having self-sustaining designated operators. However, if there is a possibility of opting for state resources, particularly in the early days of reform, they may also be an alternative source for covering unexpected costs. Thus, all proposals for financing should focus on the self-financing of the designated operator and should treat state subsidies as a contribution to be used sparingly and only when other sources of financing do not suffice. This is because the universal postal service must be provided, not only where there is high demand and where high revenue is possible, but also in localities where demand is low and costs are high, and where the service does not necessarily generate sufficient income. The need for State funding will vary, depending on whether the reserved area is used in an effective and controlled manner.

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Funding requirements

Items (thousands of USD) 2010 2011 2012 2013 2014 2015

Without effective reserved area

With effective reserved area These funding needs should be projected before including the investment proposals made by the working team on the various components of the universal postal service. D. Conclusions of the simulation The objective of the simulation is to study possible future situations where the state guarantees a universal postal service for the country, in accordance with its needs and capacities. Various scenarios and possibilities have been considered. Thus the simulation exercise will only be valid if it enables the working team to reach conclusions on the proposal for universal postal service provision. At this stage, the working team should establish the levels of service, which may not be the desired or expected levels but which are in line with the country's social and economic situation, as well as the objec-tives set out in government plans. The results and conclusions should be discussed, mainly with the desig-nated operator and the regulator, as well as with other participating bodies. These meetings are particularly important as they will result in the definitive proposal for the country's universal postal service. This is why all stakeholders must be actively involved. These meetings will also lead to the necessary amendments and adaptations, which must be agreed upon by all parties. By the end of stage three, the team will have all the elements and basic outlines needed for the draft universal postal service proposal for discussion with the various stakeholders, such as the regulator, desig-nated operator and participating ministries. The draft universal postal service proposal for discussion must include the following.

a The decision and support for the most suitable scenario, which should take account of:

– the economic and technical capacity to meet the demand for universal postal service services. In terms of demand, different plans could be put forward in addition to direct operations, as long as they are legally viable;

– the legal feasibility of the scenario application with the established conditions of service provi-sion. Legal aspects which are required by the sector in the country and which would be subject to approval by the legislative branch, including financing mechanisms; and

– the market situation and the designated operator's position in this market. Operators' practices vis-à-vis competition are particularly important, as are existing standards and compliance with the regulations in place.

b Economic evaluation of the results of the calculations in respect of the costs and of the designated operator's revenue:

– Costs must be covered by the designated operator's revenue from the various areas of postal business and other activities. Should there be a deficit, the causes thereof need to be identified together with the practicalities of eliminating it and the viable forms of financing imbalances.

– The size and scope of the deficit are particularly important in that they will be analyzed in terms of the designated operator's market share and of the overall market size. Small markets make the search for viable funding mechanisms very difficult.

c Existing, viable, practical and effective funding mechanisms for the specific country case:

– Funding mechanisms take on particular importance in achieving acceptable levels of universal postal service provision in the countries of the region, given that operators find it difficult to sustain themselves because of their level of development and market position.

– It is highly likely that they will need to use multiple funding mechanisms.

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– The team therefore needs to make a special effort to analyze these aspects in sufficient depth and to support the proposals convincingly.

d Legal and political implications:

– The existing legal framework is a very important baseline, as is the drawing up of practical legal plans that are feasible for the sector and for operations in the market.

– The team needs to visualize the practical and feasible legal changes that need to be incorporated into the new legal framework. Once defined, the universal postal service will need to be provided for in the national postal legislation on a sustainable basis.

– The sensitive legal areas of defining of services, and differentiating between services and classes of operator, as well as requirements of operators and forms (mechanisms) of financing Universal Postal Service obligations must be analyzed by the team in depth, to ascertain where the Universal Postal Service scenario selected could then be developed.

– Sector stakeholders, such as private operators, may be affected. The team must plan how to manage these situations and to neutralize any natural reactions, including political pressure in the legislative and executive branches.

– Customers may also be affected and could take part in future legal discussions, so they must be considered in the analysis.

e Analysis of the current situation in relation to the results of the calculations and of the economic, technical, legal and market analyses:

– Differences between the current and projected situations and the benefits of social, political and economic development should also be clearly highlighted.

Annexes

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Annex 3.1 Selection of fixed and variable factors and elements Elements Fixed factors Variable factors

Basic services Current situation:

The working party must include information on basic services currently provided. Future scenarios (2010–2015):

Based on the analysis in stage two to this guide, the working party must decide how implementation of all basic services will be undertaken.

It should be highlighted that the outcomes of the simulated scenarios are based on the premise that all basic services are provided.

Postal acceptance network

Current situation:

Acceptance and postal service points Future scenarios (2010–2015):

Proposed new acceptance points and the municipalities where they would be set up. Points where an increase in the number of days per week and daily opening hours is proposed.

For future scenarios, the working team must decide on the number and type of proposed points:

– fixed owned offices

– fixed rented offices

– mobile offices

– subcontracted offices It should be highlighted that the outcomes of the simulated scenarios are based on the premise that all these variables are considered.

Postal delivery network Current situation:

Percentage of geographic coverage and population with access to home delivery. Number of postmen providing door-to-door delivery services. Future scenarios (2010–2015):

Proposed percentage of geographic coverage and population with access to home delivery. Proposed increase in postmen's working hours.

For future scenarios, the working team must decide whether the new postmen will be:

– staff employees

– an outsourced service

– full time

– part time The need for new materials (bags, labels, stamps, office supplies), vehicles for the postmen (cars, motorbikes, bicycles). It should be highlighted that the outcomes of the simulated scenarios are based on the premise that all these variables are considered.

162

Elements Fixed factors Variable factors

Delivery times Current situation:

Percentage of items delivered in J+___ from the capital to other main cities, as well as to other localities. Future scenarios (2010–2015):

Gradually increase the percentage of items delivered in J+___

For future scenarios, the working team must decide whether, in addition to previously proposed adaptations to the acceptance and delivery network, adjustments to operational processes are also necessary. It should be highlighted that the outcomes of the simulated scenarios are based on the premise that all these variables are considered.

Handling of inquiries Current situation:

Percentage of inquiries processed which meet the national or UPU times for:

– resolution of inquiries

– payment of indemnities

– informing the operator lodging the inquiry

Future scenarios (2010–2015):

Gradually increase the percentage of inquiries dealt with within the prescribed periods.

The working team must decide on whether fulfilment of these objectives will require:

– new material resources

– reorganization of working procedures

– hiring of new staff for these specific tasks

– redistribution of current staff (assigning inquiry resolution tasks to staff in other units)

It should be highlighted that the outcomes of the simulated scenarios are based on the premise that all these variables are considered.

Security of postal items Current situation:

Annual percentage of ordinary letters (of the letter-post total) where there have been problems with theft, loss or damage. Annual percentage of ordinary parcels (of the parcels total) where there have been problems with theft, loss or damage. Future scenarios (2010–2015):

Gradually increase the percentage of ordinary letters and parcels dealt with within the prescribed periods.

The working team must decide on whether fulfilment of these objectives will require:

– new material resources

– hiring of new staff

– reorganization of operational processes


Prices of basic services Current situation:

Rate of ordinary domestic 20-gramme letter as the reference postal product. Future scenarios (2010–2015):

Change in current rate in percentage terms.


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Annex 3.2 Steps for carrying out a simulation study 1 Definition of the system Consists of studying the problem, identifying the project goals, specifying the indicators for measuring the effectiveness of the system, defining the future system and specifying the objectives thereof. 2 Formulation of the model Once the expected outcomes of the study have been established, the model which will yield the desired results is defined and built. In formulating the model, it is necessary to define all the variables, the links between them and the flow diagrams which describe the model in detail. 3 Data collection It is important that the data required by the model be defined clearly and accurately, so as to produce the desired results. 4 Computer implementation of the model Having defined the model, the next step is to decide on how it will be processed to achieve the desired results. 5 Verification The verification process consists of checking that the simulated model meets the design requirements estab-lished. 6 Validation of the system The aim of this stage is to assess the differences between the functioning of the simulator and of the actual system. The most common ways of assessing a model are:

– Experts' opinion on the results of the simulation.

– The accuracy with which historical data were forecast.

– The accuracy of future predictions.

– Checking for errors in the simulation model by using data which would result in failure of the actual system.

– Acceptance and trust in the model by the person using the results of the simulation. 7 Testing The model can be tested once it has been validated. Testing consists of generating the desired data and performing a sensitivity analysis of the necessary indicators. 8 Interpretation In this stage of the study, the outcomes of the simulation are interpreted and a decision is taken accordingly. The results of simulation studies allow semi-structured decisions to be taken. 9 Documentation Two types of documentation are required to ensure the simulation model is used to its full potential. The first refers to technical documentation, and the second to the user guide, which facilitates interaction and use of the model developed.

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Annex 3.3 Projections of designated operator's volumes and revenue (macroeconomic factors)

Projected variations in designated operator's volumes and revenue

Indicators48 2010 2011 2012 2013 2014 2015

GDP increase …% …% …% …% …% …%

Population increase

…% …% …% …% …% …%

Rate of inflation …% …% …% …% …% …%

Volume and value49

Vol Val50 Vol Val (USD)

Vol Val (USD)

Vol Val (USD)

Vol Val (USD)

Vol Val (USD)

Letter post (public services)

Letter post (financial sector)

Letter post (industry and commerce)

Letter post (Government)

Letter post (private customers)

International letter post

Domestic parcels

International parcels

Priority items

Other

Total

48 The working team may use this table as a guide to elements for consideration when making projections as to the designated operator's volumes and revenue. The team must decide whether to amend it or to include other indicators or items. 49 Indicate quantities in thousands. 50 Value is calculated by multiplying the volume by the current average rate and the projected rate for each year or by the rate corrected by the appropriate indicator.

165

Annexe 3.4 Projections of designated operator's volume, revenue and costs (commercial factors)

Projected variations in designated operator's volumes and revenue

Variation of share in the domestic postal market51

2010 2011 2012 2013 2014 2015

Letter post (public services and institutions)

…% …% …% …% …% …%


…% …% …% …% …% …%


…% …% …% …% …% …%

Domestic parcels

…% …% …% …% …% …%


…% …% …% …% …% …%

Priority items …% …% …% …% …% …%

Volume and value52

Vol Val (USD)

53

Vol Val (USD)

Vol Val (USD)

Vol Val (USD)

Vol Val (USD)

Vol Val (USD)

Letter post (public services)

Letter post (financial sector)

Letter post (industry and commerce)

Letter post (government)



Domestic parcels


Priority items

Other

Total

51 The team must decide on the potential percentage variation in market share. Thus, taking into account the value and volume of each market segment, the market share that can be captured can be ascertained. 52 Indicate quantities in thousands. 53 Indicate quantities in thousands of USD. Value is calculated by multiplying the volume by the current average rate and the projected rate for each year, or by the rate corrected by the appropriate indicator.

166

Annex 3.5

Cost projections

54 The working team can establish other macroeconomic cost reference indicators which it deems relevant, provided these costs are disaggregated.

Items54 2010 2011 2012 2013 2014 2015

Rate of inflation …% …% …% …% …% …%

Salary change rate …% …% …% …% …% …%

Staff costs

Other costs

Total cost

167

Annex 3.6 Access to acceptance in offices and home delivery – Current and proposed scenarios

Access to the acceptance network

Provinces Data Current situation 2015 situation

Total population

Km² Offices/ agencies

Inhabitants/ office

Inhabitants/ km²

Population served %

Offices/ agencies

Inhabitants/ office

Inhabitants/ km²

Population served %

1

2

3

4

5

6

7

Total

Access to the home delivery network

Provinces Data Current situation 2015 situation

Total population

Km² Number of postmen

Inhabitants/ postman

Inhabitants/ km²

Population served %

Number of postmen

Inhabitants/ postman

Inhabitants/ km²

Population served %

1

2

3

4

5

6

7

Total

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Stage Four – Drafting the universal postal service proposal and seeking support

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A. Defining the components of the universal postal service proposal 1 Conceptual basis of the universal postal service 1.1 The universal postal service as a constitutional obligation and fundamental right The right to communication is a fundamental right enshrined in the national constitutions of almost all countries in the world. It is very important in Latin America because there are regions with no alternative means of communication other than the postal services. The Universal Declaration of Human Rights, adopted by the United Nations General Assembly in its resolution 217 A (III) of 10 December 1948, recognizes in article 25 that "Everyone has the right to a standard of living adequate for the (…) wellbeing of himself and his family (…) and necessary social services", which include postal communications. Similarly, article 12 of this Declaration states that "No one shall be subjected to arbitrary interference with his (…) correspondence (…)", and in article 19 the right to communication is clear: "Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers". 1.2 The universal postal service as an obligation undertaken in international postal agreements The universal postal service is an obligation that member countries of the international postal organizations have shouldered, either globally or regionally. 1.2.1 The Universal Postal Union (UPU) The UPU is a specialized United Nations agency. It is currently made up of 191 member countries which, through their plenipotentiary delegates, undertake to comply with the Acts. The Acts of the 24th UPU Congress held in Geneva in August 2008, have been in force since 1 January 2010. Member countries undertook to establish an accessible, quality universal postal service, adapted to the needs of the population and to the individual conditions of each country. The aim of this commitment is to harmonize postal services provided in the member countries, together with quality of service, allowing mail to circulate through the postal network more quickly, thus benefiting all member countries and their postal users. The specific article featuring the member countries' commitment to establishing a universal postal service in their countries is reproduced below. UPU convention (Geneva, August 2008) "Article 3 Universal postal service 1 In order to support the concept of the single postal territory of the Union, member countries shall ensure

that all users/customers enjoy the right to a universal postal service involving the permanent provision of quality basic postal services at all points in their territory, at affordable prices.

2 With this aim in view, member countries shall set forth, within the framework of their national postal

legislation or by other customary means, the scope of the postal services offered and the requirement for quality and affordable prices, taking into account both the needs of the population and their national conditions.

3 Member countries shall ensure that the offers of postal services and quality standards will be achieved by

the operators responsible for providing the universal postal service.

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4 Member countries shall ensure the universal postal service is provided on a viable basis, thus guarantee-ing its sustainability."

Given the importance of the universal postal service, at its last Congress, the Universal Postal Union estab-lished its strategic plan entitled "Nairobi Postal Strategy (NPS)". Objective number 2 stated that every mem-ber country should stimulate a universal postal service adapted to the social, economic and technological environment, thus:

i stimulating the provision of a quality, affordable and innovative universal postal service adapted to technological changes;

ii developing universal postal service regulations and criteria, keeping in mind the wide national and regional differences in terms of economic development and customer expectations;

iii ensuring that options for financing the universal postal service are developed and understood;

iv improving access to universal postal service, providing access to posting and delivery at affordable prices, taking into account national specificities, including the use of ICT-based innovations and hybrid services to improve access;

v understanding the economic and social benefits of a sustainable universal postal service as an intermediary between businesses and consumers, as a channel for the distribution of goods and an instrument for regional policies.

2 Political basis and social involvement in the country's economic growth and development Thus far, we have seen that the universal postal service, in addition to being a fundamental right of all citizens, is an international commitment made by member countries of the UPU. However, the members of the working party should consider the specific benefits for the country resulting from the establishment of an accessible, quality universal postal service. One aspect which has come to the attention of the regional authorities is how the postal sector can help in achieving the Millennium Development Goals.55 In fact, countries such as the Dominican Republic have a Presidential Commission on the Millennium Development Goals and Sustainable Development (COPDES), headed by the President. It is worth noting that the public postal network's main asset is its comprehensive coverage. This is unique, particularly in developing countries, and may constitute the biggest logistical network of most countries, reaching rural and remote areas, and the most disadvantaged people (women and children), and distributing educational materials and/or essential medical supplies.

55 In September 2000, 147 United Nations countries adopted the Millennium Declaration which encompassed eight key development goals, the majority to be achieved by 2015, including: eradicating extreme poverty and hunger; achieving universal primary education; promoting gender equality and empowering women; reducing child mortality and improving maternal health; combating HIV/AIDS, malaria and other diseases.

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Millennium development goals

Eradicate extreme poverty and hunger

Achieve universal primary education

Promote gender equality and empower women

Reduce child mortality

Improve maternal health

Combat HIV/AIDS, malaria and other diseases

Ensure environmental sustainability

Develop a global partnership for development

Annex 4.1 includes a table listing the various Millennium Development Goals, together with the possible con-tribution thereto from the postal sector. This table could be included in any studies undertaken by the working party, with a view to raising awareness among the authorities of the importance of an accessible, quality pub-lic postal network. It can also be adapted to individual country circumstances. The working team should raise awareness among national authorities regarding other ways in which the public postal network can benefit the country, such as:

– Providing postal financial services in rural or remote regions (services which are not profitable for financial entities), thereby promoting territorial and economic cohesion, competitiveness and reducing social exclusion across the country. Some countries in the region have implemented an electronic payments network, based on the UPU's IFS network. This network has proved important in attracting remittances to developing countries with large numbers of emigrants.

– Promoting international trade, in particular country exports. Brazil's experience with the export service "Exporta Fácil", through the Post, is interesting, as it uses the universal service network to simplify customs and shipment processes across the country.

– Offering services that are not provided privately, such as telecommunications services, (Internet access points, telephone and other electronic communications services), bridging the digital divide and contributing to increased Internet coverage in the country.

– Providing official services (delivery and receipt of official documents, pension payments and tax pay-ments), transmission of basic information to the entire population, distribution of educational materials for schools, etc.

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3 Sectoral situation and need for IPDP-based reform The working party must include an analysis of the postal sector in its study. This will serve as a guide when carrying out the second stage of IPDP implementation; drafting a sectoral policy. The following points should serve to facilitate this task. In developing and least developed countries in Latin America and throughout the world, resources are scarce and in some places extreme poverty is rife. Here, postal services are not considered to be a fundamental right, nor are they included in national development plans; rather they are brushed aside in the face of immi-nent basic infrastructural needs such as electricity, sanitation and water supply, or even telecommunications services which contribute rapidly to the growth of national GDP. Consequently, postal services are not generally regarded as basic state infrastructure. They are omitted from national development plans, there are no postal sector policies, and investment in the sector is limited. The World Bank and regional banks have not traditionally prioritized the postal sector as a recipient of interna-tional financing. The lack of concern for the sector has generated a vicious circle affecting the provision of postal services, which are of poor quality, meaning that customers either seek other alternatives or are forced to pay high prices for added value services provided by private enterprises. For the public postal operator, this leads to a fall in postal traffic, financial and economic deterioration, lack of investment, high costs and low quality. The sole beneficiaries are informal (garage) operators and large courier companies, to which citizens are obliged to pay high prices to access essential basic postal services. Citizens with no access to basic postal services and those for whom access is prohibitive are all penalized. Locked into the aforementioned vicious circle, the public postal operator is limited in terms of postal volumes and revenue, providing low quality services and with scant economic resources for investment. Lastly, the state has no alternative but to finance the public postal operator increasingly year on year, and often receives in return an expensive, low quality of service from a sector with a poor public image. There is no investment, as any potential benefits for the country generated by the national infrastructure network cannot be reaped. The IPDPs in the region to date have focused on the need to break the vicious circle and turn it into a virtu-ous circle, so that the postal sector can develop to its full potential. The vicious circle continually exacerbates the problem. In order to break it, action is required to generate a reverse trend, as shown in this image. Therefore, one priority is to raise awareness and convince national governments and international funding organizations of the real and potential importance of the postal sector as basic infrastructure for the country's social and economic development. Focus should also be placed on including the sector in national develop-ment plans, promoting its importance as a strategic activity for the country. In this way, the sector can benefit from access to national investment and, more simply, from sources of international funding.

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Accessing national investment and international funding sources for sector reform projects will, inter alia, allow the public postal network to be expanded and improved, postal services to be automated, and the public operator's operational processes to be streamlined. This does not preclude other reform in the sector. Annex 4.2 of this guide includes tables on various aspects of the postal sector in numerous Latin American countries, together with their impact on the country.

This is the result of the different experiences acquired in formulating the IPDPs, which the working team must fully utilize and adapt to the countries being analyzed.

The sector analysis in Annex 4.2 covers the legal and institutional framework, the market, the universal postal service and the public postal operator. 4 Obligations that can be assumed by the State to guarantee basic postal services in the country In this section the working party should set out the general content of the proposal, taking into account the designated operator's technical possibilities and existing funding capacities. These will be considered in more detail in subsequent sections of the guide. At this stage, there is no need for the team to develop the detail of the UPS characteristics proposed, but rather to establish the outline of the proposal, taking into account the baseline situation analyzed and the technical possibilities of implementation. Likewise, the general aspects of funding under the proposal should only be mentioned here, and dealt with in detail in subsequent sections. This table sets out the scope for development of this point.

Summary of the UPS proposal

Items Proposal

Services Indicate the services that the state will guarantee as UPS.

This is irrespective of which offices provide which services.

Access to acceptance

Indicate the total number of access points.

Indicate the number of additional access points that the team is proposing to cre-ate (in the Annex they may be disaggregated by province and municipality).

Access to home delivery

Indicate the number of municipalities with home delivery.

Indicate the number of municipalities which will be expanding or introducing home delivery (details to follow in Annex).

Delivery times Indicate the current situation, the objectives proposed and the justification thereof.

Using the current situation as a basis, the team should provide details of propos-als for additional structures which would be created, and should justify the objec-tives proposed.

Security of mail Indicate the current situation, the objectives proposed and the justification thereof.

Processing of inquir-ies

Indicate the objectives proposed and the justification thereof.

Using the current situation as a basis, the working team should provide details and justify the proposal with regard to the actions recommended for this point.

Price Indicate the current situation and the general price proposal, as well as the annual percentage variation where relevant and the criteria used to ascertain it.

These are general indications without going into detail.

Funding Without going into detail in this section, the team should indicate the current funding needs, their sources and the additional funding needs and possibilities of generating additional resources.

The details and projected income and expenditure will be set out in a different section.

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5 Specifications of conditions of State-guaranteed basic postal services Under this point, the team should specify the details of each element of the universal postal service, taking into account that a specific scenario will have been chosen in the previous stage. Amendments can still be made in this stage if the team deems them necessary, particularly as regards the funding possibilities of the measures proposed. 5.1 Scope of services included in the universal postal service In previous stages of this guide, it became clear that the basic services to be provided by the country are those set forth in the UPU Convention. Scope of guaranteed postal services

Letter-post items:

– Letters and postcards

– Printed matter and small packets weighing up to 2 kg

– Literature for the blind up to 7 kg.

– "M" bags up to 30 kg (article 12.2.4 of the UPU Convention)

Parcels: Postal parcels up to 20 kg

If possible under the proposed scenario

Other services: Postal financial services 5.2 Level of access The level of access proposed for the country will depend on the type of office providing services at the municipality level. The number of inhabitants is the criteria normally used to assign a particular type of office, although there may be other circumstances which mean a specific type of office would be more suitable. The table below should complement the team's table, taking into account analysis of the information gath-ered. Type of office Population bracket (Example) Other circumstances

1 25,001 and above E.g. tourist environment

2 From 5,001 to 25,000

3 Up to 5,000 In view of the above, the team should propose the characteristics of the basic services to be provided, the type of office and its opening hours, as well as the postal delivery method. The type 1 office would be the most complete, offering the most services, regular opening hours and home delivery. The following is an example that could be used by the working party.

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Type 1 offices

Basic services provided: Maximum

Office type:

– Own X

– Rented X

– Outsourced (by third parties)

Acceptance and domestic delivery

Number of days per week Daily opening hours

1 2 3 4 5 6 7 Weekdays Weekends

X 8.00–17.00 9.00–13.00

External delivery

Minimum number of days per week Form of delivery

1 2 3 4 5 6 7 Home Office

X X The type 2 office would not offer the same conditions of service provision as type 1, nor the same opening hours or level of service. The following is a guideline table.

Type 2 offices

Number of existing acceptance points: Medium

Office type:

– Own x

– Rented x





9.00–14.00 10.00–12.00

External delivery



X X X

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The type 3 office offers the lowest conditions of service. The following is a guideline table. Type 3 offices

Number of existing acceptance points: Minimum

Office type:

– Own:

– Rented X





x 9.00–12.00 –

External delivery



X X X The working team should provide the number and type of offices for each of the country's municipalities, in two columns: current situation and proposed situation. 5.3 Quality of services This point will consider the four aspects of quality dealt with in this guide:

– Delivery times

– Inquiry processing

– User information

– Mail security As regards the delivery time objectives, the working team should obtain sufficient information on the current postal delivery times, as well as on the proposed universal postal service structure. These elements will allow objectives to be set, which should be modest at the outset, then subsequently modified in line with the results obtained. The objectives should be ongoing, in accordance with users' needs and the technical and financial possibili-ties. The following tables include the delivery time objectives: Delivery time objectives for a standard letter up to 20 g

2010–2012 Capitals Main cities Other

Capitals J+…for…% items J+…for…% items J+…for…% items

Main cities J+…for…% items J+…for…% items J+…for…% items

Other J+…for…% items J+…for…% items J+…for…% items

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Delivery time objectives for a standard letter up to 20 g

2013–2015 Capitals Main cities Other

Capitals J+…for…% items J+…for…% items J+…for…% items

Main cities J+…for…% items J+…for…% items J+…for…% items

Other J+…for…% items J+…for…% items J+…for…% items As regards the processing of inquiries, the working team already has information on the current situation, as well as proposals to reduce inquiry response times. As for delivery times, the objectives should take into account users' needs and the technical and financial possibilities of meeting these objectives (e.g. the possibility of reducing inquiry response times without need-ing to hire more staff). Inquiry response objectives

Items 2010–2012 2013–2015

Deadline for resolving national inquiries

Deadline for resolving international inquiries

Deadline for paying indemnities

Deadline for informing other designated postal operators with respect to international inquiries

Regarding information for postal service users, the working team should obtain information on the percentage of offices with information available to the public on supply of services, office opening hours and regularity, quality objectives and inquiry handling procedures. This information may be useful in establishing objectives for improvement. User information objectives

Items 2010–2012 2013–2015

Percentage of offices which provide users with basic informa-tion on services

As regards the security of mail, the working team should propose technically and financially viable objectives, taking into account the information available and the proposals made to improve this aspect of the universal postal service. Postal security objectives – Percentage of ordinary mail with security problems

Letters Packets

2010–2012 2013–2015 2010–2012 2013–2015

Theft

Loss

Damage 5.4 Price of services The team already has sufficient comparative elements to be able to propose prices for reference products. To this end, the basic reference product of the universal postal service is the ordinary domestic letter in the first weight step.

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This is why a template table is included, featuring this element of the universal postal service. The team may decide to include more reference products.

Ordinary letter price proposal. First weight step56

2011 2012 2013 2014 2015

Ordinary domestic letter

Ordinary international letter 6 Economic support for the proposal. Sustainable funding and costs The working team should use the analyses and conclusions reached in the third stage when considering economic support. To this end, it should ascertain the costs of the chosen scenario and the forms of funding. It should be highlighted that the basis of the proposal has been discussed and approved by the regulatory authorities and the designated operator alike. In this stage, the following should be included:

i The most suitable scenario, according to:

a economic and technical capacity;

b legal practicalities of the scenario's implementation; and

c calculations of the simulations.

ii Funding mechanisms.

iii The legal and political implications for the sector. 7 Political support for the proposal First, the working team needs to be aware that even the most wonderful technical study is worthless if it does not sell the product. The team must understand the difference between giving a technical presentation of the study and its conclu-sions and giving a political presentation. Therefore, it must first decide on the target for the presentation of the work and results. Said entity must have influence and be known in the country's governmental and parliamentary spheres. The ideal candidate would be the supervisory ministry for the postal sector, as it would guarantee the study's image of independence. Once the technical study and results are available, the next step is to draft a detailed communication plan for the proposal, which could be included as an annex to the study. This communications plan should include the persons responsible, timeframes and the actions to be under-taken to support the study, and should also take into account the following considerations among others:

– Identify key actors in each sphere for presentation of the study: government; Ministries of Economy and Planning and the President's Office; the legislative branch; representatives on committees dealing with the country's postal policy; private postal operators' associations; representatives of trade union organizations and consumer organizations; the press; reputable legal advisers; and others.

– Draft executive summaries of the technical document, geared to the profile of the target audience. It should be borne in mind that people rarely have time to read long studies. The core ideas should be pinpointed and represented in graph form. Several executive summaries should be drafted, depending on the message to be conveyed.

56 In local currency.

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– Prepare information workshops and, in the first phase, invite key government players with influential capacity, as well as members of parliamentary committees responsible for postal sector issues. These workshops will yield information on the issues to be modified or further developed in the study. In a second phase, workshops will be organized for trade union organizations and consumer and user associations.

– Collate the suggestions made in the workshops into a document attached to the study and reflect on how they affect the document.

– Give presentations to private operator associations. Care should be taken with the messages issued regarding the study, as they should focus exclusively on improving the quality of the universal postal service.

– Draft press releases and distribute executive summaries to the media. Regarding sensitive content that the working team may use in presentations or notes, this can be based on information concerning the legal or institutional postal framework, the market, the universal postal service, and the public postal operator as the operator designated to provide basic postal services to all citizens of the country. However, when seeking political support for the proposal, the content should include specific data regarding the current situation of the postal sector in the country, and not merely statements or opinions. To this end, the team should highlight the most sensitive data for politicians, such as the percentage of the population that cannot:

– access postal services;

– post any kind of item at an office;

– receive postal items. Likewise, emphasis should be placed on the consequences or impact (use impacts from the tables) of the problems listed, namely that:

– citizens are forced to use the services of private postal operators, which are not affordable (in practice, this prevents people from enjoying a fundamental right);

– the designated operator is trapped in a vicious circle (which should be explained in detail by the team);

– the state, which has other priorities, is obliged to fund poor quality services with a poor image, and to annually increase the budget for these services.

Once they are aware of the need for change, politicians must be persuaded that this proposal is the most viable, that the various needs have been analyzed and prioritized, that three scenarios have been simulated for each solution, that the cost has been quantified, and that taking into account the criteria of maximum effi-ciency, a scenario has finally been selected, linking specific proposals for improvement to the various ele-ments comprising the basic postal services. They must also be advised that the funding needs have been quantified, that there are alternatives for investment, and that a progressive implementation plan has been drawn up. Presenters should explain that the entire plan is based on a working methodology geared to ensure that all proposals are financially viable (capacity to quantify the investments required for UPS implementation and maintenance) and operationally feasible (technical capacity and resources available for the universal postal service). To do so, the team should carefully select the tables/graphs in the proposal:

a Tables/graphs of indicators with the current population percentage without access to post offices or home delivery and how this differs from the proposed situation (see model in Annex 3.6).

b Tables/graphs of indicators of acceptance and home delivery, representing imbalances across regions and provinces and how they differ from the proposed situation.

c Improvements in the indicators for the remaining universal postal service elements (seen in stage two).

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B. Preparation of the proposal document 1 Definition of the methodology for drafting the proposal This stage is essential because of the complexity of the various issues to be covered by the document; it is vital that it be drafted accurately for each individual case, striking a balance between dealing with the subjects in sufficient depth and going into too much detail. In view of these circumstances, a prototype proposal document has been prepared, which is intended to guide the team step by step through each of the three parts comprising the document, and to enable it to understand the objectives of each chapter and the depth required. This prototype is contained in Annex 4.3. The three parts comprising the prototype are essential in order to explain the sector's situation to the authorities specifically and concisely, as well as the current national situa-tion, the scenario projected for the needs of society and, lastly, the specific UPS proposal, including its eco-nomic, legal and operational viability. 2 Distribution to team members of sections of the document as they are completed In this stage, the working team will play a more active role since the need for contributions from the support groups will be lower. The latter will be called on only if the team requires their services. As established at the outset, the working party will be made up of at least seven members, belonging to min-istries, the regulator and the designated operator. The coordinator must organize three subgroups of the working party with a minimum of two members per subgroup, taking care to integrate them in accordance with their knowledge in the relevant area. Once the team has been divided into the three subgroups, the activities comprising stage four can be exe-cuted simultaneously in order to draft the UPS proposal. It is recommended that the drafting of the different parts be split across the groups. The coordinator, with two members of the working team, will consolidate all the stages and harmonize the document. Once the document has been assembled, the remaining members of the team will revise it individually and supplement it as they deem necessary. 3 Drafting and execution of the schedule of activities The work in this stage is fundamental in setting out the country's UPS proposal and garnering support. It is recommended that the team should devote three or four weeks to this stage. For the extended period of working meetings, it is particularly important to obtain the document specifying the proposal. Defining the content of the document and correctly drafting the arguments supporting the proposal is not an easy task in a short space of time. It requires great discipline, organization and leadership from the coordi-nator. The entire team should meet for the first two days, taking the prototype as a benchmark. It should consider all the points included in the document and check that it has all the information necessary to draft the proposal. At the end of the second day of this stage, it should have a timetable, broken down into parts for each sub-group, together with their respective responsibilities. Each of the subgroups should be given five working days to develop the document, with the coordinator monitoring to ensure that things are on track. Once each subgroup has completed its task, it should present it to the other members of the working team for discussion. The coordinator and two members of the team should then harmonize the document within two working days.

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At the same time, the other members of the team should draft the PowerPoint presentation for presentation to the authorities. At the end of the second week, the team should be in a position to discuss the document and corresponding presentations. The persons responsible for each activity (proposal document harmonization and presentation preparation) should make the adaptations suggested by the other team members. They should be given one working day in which to complete this task, after which they should present the document and the definitive proposal. The coordinator should take steps to give the presentation to the designated operator and the regulator by the end of the third week. All the logistical aspects of the presentation should be taken into account. 4 Discussion of the document and PowerPoint presentation attended by the operator and

regulator The designated operator and regulatory authorities should be provided with the draft document for their input and observations. The coordinator should emphasize to the authorities the importance of their opinion and, where necessary, ensure that they hold discussions to enable the working team to make the relevant changes. 5 Printing of the amended document and presentation Once he has obtained the amended document, the coordinator should:

a Print the required number of colour copies of the final version, taking into account the number of authorities attending the presentation, as well as other protocol commitments;

b Present and distribute the document to the attending authorities;

c Prepare the administrative document which the government, through the supervisory ministry, will use when deciding to adopt the UPS.

The study can be presented differently, depending on the target audience. When defining these aspects, the coordinator should consider the information in the point on political support for the proposal. Together with the regulator and the designated operator, the coordinator should decide on the following:

– The number of presentations to be made and their target audience.

– Organization of the various presentations.

– Dates, venues and other logistical matters. For each country, it is necessary to establish which authorities should attend this presentation. The presenta-tion date should therefore fall in line with the authorities' availability. This communication must be made in writing. Similarly, the official distribution of the documents to the authorities must take place during the presentation. Care should therefore be taken to publish enough copies for the main authorities.

Annexes

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Annex 4.1 Table outlining the postal sector's contribution to the Millennium Development Goals

Postal sector's contribution to the Millennium Development Goals

Millennium Development Goals

Country data (Millennium Development Goals, Country Progress Report)

Postal sector contribution

Eradicate extreme poverty and hunger57

Halve the proportion of people whose income is less than 1 USD a day (extreme poverty).

Indicate the percentage of the country's population living in extreme poverty.

The Post can be used as a payment service, in particular in rural areas where financial entities do not have their own branches.

Achieve universal primary education

Ensure that, by 2015 children everywhere, boys and girls alike, will be able to complete a full course of primary schooling (10 years).

Indicate the percentage of schoolchildren with a basic level of education.

Set up address systems and databases which provide individuals with their own postal address in places where this is not yet the case.

Send textbooks via the postal network to remote areas, availing of the national coverage.

Promote gender equality and empower women

Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015.

Indicate the country's data.

The postal service can be used as an employer of women and information centre.

The postal sector provides many opportunities for development, resulting in a well-qualified workforce.

Reduce child mortality

Reduce by two thirds the under-five mortality rate between 1990 and 2015.

Indicate the number of deaths of children under five for every 1,000 births.

The postal network is a very practical means of delivering information and medical supplies, and of imparting simple instructions to mothers regarding care of their young children.

Improve maternal health

Indicate the number of deaths per 100,000 live births, and the percentage of births which are attended by skilled care staff.

Postal services are a logistical means of distributing goods and information, as well as medicines and other essential elements for maternal care in low-income and rural areas, at a low cost and in a timely manner. Medical care and government healthcare programmes could consequently see significant improvements.

Combat HIV/AIDS, malaria and other diseases

Indicate the percentage of women and men who have contracted or died from diseases such as HIV/AIDS, malaria, tuberculosis, and dengue fever.

Provide information on the supply of antiretroviral medicines.

The postal network can distribute various vaccines, information campaigns and other materials for the prevention of many diseases, since it boasts the infrastructure to meet this goal.

Many post offices distribute AIDS prevention mechanisms and anti-malaria medication.

57 Extreme poverty is defined as the percentage of the population which survives on income below one dollar a day, adjusted to purchasing power parity.

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Postal sector's contribution to the Millennium Development Goals

Millennium Development Goals

Country data (Millennium Development Goals, Country Progress Report)

Postal sector contribution

Ensure environmental sustainability

Provide data on environmental issues (sectors which need to bring their policies in line with sustainable development, percentage of protected land).

The designated operator can set up addressing and database systems which will allow citizens to have their own postal address. They can then distribute the information required to improve citizens' standard of living.

Develop a global partnership for development

Consider building a global alliance for development and agree upon a national human development strategy, aimed at achieving: economic growth and equality, promotion of investment, poverty reduction, stimulation of production and generation of employment, social integration and governance, development of competitiveness and social protection.

Indicate regional or global organizations of which the country is a member, as well as developments in the servicing of public debt.

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Annex 4.2 Diagnostic table of the postal situation Legal and institutional framework

General situation

The postal sector is considered neither as a strategic activity, nor as essential infrastructure in the government's economic programmes or in national development plans.

There is no sectoral policy or postal sector regulatory authority.

The country has no updated legal standards and any existing standards are spread across different laws.

The postal sector is not regulated as a whole. Only the public operator is regulated.

Only the public operator's mail services and operational processes are regulated.

Only domestic postal operational processes are regulated, but not postal operators' obligations with respect to access (acceptance and home delivery), quality and pricing of postal services.

Regulation of express services is limited to customs matters.

The country has not incorporated into its legislation commitments made under the Universal Postal Union Postal Convention, and has not ratified the Acts of the last Congresses.

Impact

Failure to consider the postal sector as a strategic activity and its exclusion from government economic programmes impedes access to national and international sources of funding (such as the World Bank or the Inter-American Development Bank) for the public operator and for the entire sector.

The lack of regulatory authority and of appropriate legislation for the entire sector results in:

– Market disorder (given the lack of rules and of monitoring compliance with what rules there are), meaning that the sole beneficiaries are informal operators which work without rules or obligations and which do not invest in the sector.

– Loss of income for the public and legal operators, which hinders investment, the introduction of technology and sector growth.

– No protection for postal service users, which keeps them in the dark as to their rights and how to claim them.

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Market

General situation

– Lack of knowledge of the country's postal market and of its potential development:

• There are no data (mail volumes and revenue) for the postal market. Information from the public postal operator is incomplete.

• Lack of information on the number of postal service providers which exist in the country.

– No control of private postal operators, allowing them to operate in a sector that should be reserved for the public postal operator.

– Fragmentation of supply with a large number of small operators providing services in the postal sector with no obligations and only in profitable segments (garage operators).

– The public postal operator has a low market share in the basic postal services market (poor image and lack of trust), focusing on the basic letter-post segment (letters and postcards).

– The parcels market is developing and providing opportunities for growth. The designated operator's market share in this segment is almost non-existent.

– The majority of the market value lies in express postal services, which have low volumes but are highly profitable and are operated by the big international courier companies (DHL, FEDEX, TNT, etc.). 50% of the total revenue is generated by around 5% of the market volume.

– A high percentage of self-provision by large public utilities (water, energy, telephone) and financial companies due to a lack of trust in the postal operators. Consequently, proof of delivery with the recipient's signature is required for all items, which increases the cost of service provision.

– A lack of technological development in the supply of basic services. Manual processes.

– No reliable addressing and postcode system.

Impact

– Given the lack of information, it is difficult to take decisions to regulate the postal market.

– Poor quality of basic services.

– High prices of added-value services.

– Poor monitoring of conditions governing the provision of postal services.

– Difficult to establish plans to improve access to, and the quality of, basic postal services.

– The lack of addresses and postcodes makes it difficult to provide an efficient postal service, thus passing on higher costs to customers.

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Universal postal service

General situation The universal postal service is not defined, and details of the postal services comprising it have not been included in the legal framework. No minimum objectives for expansion of the post office network have been set, nor are there any objectives pertaining to home delivery. The basic service provision conditions for the country have not been specified, in terms of delivery times, inquiry processing and mail security. Therefore, no goals have been set for growth and development of postal infrastructure and activity. There is limited understanding of the cost of providing basic postal services and of the indicators which would enable simulations of future changes. In the light of the foregoing, the state has no elements to assist it in deciding on the required sustainable funding scenarios. It is unaware of the objectives of the economic contributions it makes, and does not see what a return on investment in the sector would consist of. The acceptance and home delivery network is gradually shrinking, especially in areas with low population density and low mail volumes. Impact Failure to meet the country's commitment to set up the universal postal service under the UPU Convention. It is estimated that only X% of the population has sufficient access to sending mail and X% of the population has access to receiving mail through daily, regular home delivery. The scarcity of offices and lack of mailboxes and franking machines makes it very difficult to access the public postal network in certain areas of countries, particularly in areas with low population density and low mail volumes. The postal divide between profitable urban areas and rural areas with greater costs is widening, thus reducing socio-economic cohesion across the different areas of the country and hindering economic development in these areas.

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Public postal operator

General situation A national postal network that is very limited in terms of geographic and demographic coverage (include figure if known). Very low share in the national postal market (around 5–10%). Low operational volume, propped up by international basic service operations which, together with state contributions, are the largest sources of income. Manual operational processes, with distortions in the basic letter-post segment, combined with unnecessary and expensive processes. Existence of a strategy based purely on cost reduction and lack of investment (process automation, equipment, infrastructure, marketing). No independence, requiring authorization from other state bodies to:

– decide upon and modify the organizational structure;

– establish staff policy (salaries, recruitment, dismissal, mobility);

– contract suppliers;

– manage assets or take out loans;

– forge alliances with other operators. Impact Limited income-generating capacity with recurring losses, rendering investment in the public postal network impossible. Low quality of service provision. Poor corporate image for service users and major customers. Difficult to take autonomous decisions, resulting in:

– little flexibility in meeting market needs, with an ensuing increase in competition in the postal market;

– limited possibility of sharing costs with other operators;

– promotion of compliance with standards and limited individual initiative;

– diluted sense of responsibility;

– unmotivated staff, preferring to meet standards rather than increase profit;

– difficulties in hiring specialized staff;

– difficulties in negotiating special contracts with major customers.

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Annex 4.3 Prototype UPS proposal – Content template Part one – Basis of the proposal 1 Universal postal service

1.1 Basis elements of the concept (fundamental rights and constitutional legislation).

1.2 Commitments under international conventions (establishment and inclusion in national legislation). 2 Integrated postal reform plan for the country

2.1 Current situation of the postal sector in the country (market supply and demand, operator's situation and legal framework).

2.2 Postal reform objectives.

2.3 Characteristics and components of the plan (characteristics, focal points and main actions). Part two – Basis for analysis 1 Issues for analysis (current supply, market and costs) 2 Scenarios for simulation

2.1 Decisive elements and factors (services and conditions of service provision – access, quality and price)

2.2 Definition of the scenarios 3 Calculation of costs and simulations 4 Conclusions Part three – Universal postal service proposal 1 Guaranteed basic postal services 2 Conditions of service provision

2.1 Access

2.2 Quality (speed, reliability, security, liability, customer satisfaction)

2.3 Price 3 Costs of service provision 4 Forms of financing 5 Political and economic support and sustainability Annexes

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Part one – Basis of the proposal 1 Universal postal service 1.1 Basis of the concept (fundamental rights and constitutional legislation) The core of the proposal being the universal postal service, it is worthwhile to briefly set out the concept of postal services and the universal postal service as a fundamental right and commitment made by the state, enshrined in constitutional and national legislation. 1.2 Universal postal service commitments under international conventions (establishment and inclusion

in national legislation) Make a reference to the universal postal service as a commitment under international postal agreements, indicating the most relevant articles, and briefly describe the most important postal organizations and the commitments made by their member countries. See stage four of the guide (Formulation of the UPS proposal and its support) and chapter 2 of Module II of the Guide to Postal Reform and Development. 2 Integrated postal reform plan for the country 2.1 Current situation of the postal sector in the country (supply and demand, situation of the public

operator as the designated operator and legal framework) This section brings together conclusions in respect of the following: the market; the legal framework; the designated operator and the postal services available in the country. These conclusions will be drawn from the formulation of the IPDP, on the basis of which the sector's situation will be diagnosed. 2.2 Postal reform objectives

This part should set out the main objectives of the reform, and explain how a quality universal postal service will be guaranteed. These objectives, which should be consistent with the main characteristics established during the IPDP formulation phase, should show how the national economy stands to benefit from the reform. Under this point, arguments set forth in stage four of this guide may be used (Formulating a UPS proposal and its support), or Module I of the Guide to Postal Reform and Development and chapter 1 of Module IV. Basic reference guidelines for this subject are contained in Module II of the Guide to Postal Reform and Development. Refer to the IPDP for the country. IPDP objectives are the long-term goals which a national government sets when it commits itself to a process of postal reform and sector development. It is important to be aware that the IPDP is a national initiative which is likely to continue beyond the current government's mandate. The main focus of the IPDP should be to modernize and develop the country's postal activities. The key objectives of IPDP reform will be sector modernization and development of basic postal services, in line with each country’s situation. IPDP implementation should aim to ensure that investment resources are obtained for the country's UPS, so that it can be modernized and rolled out to the whole population. 2.3 Characteristics and components of the plan (characteristics, focal points and main actions)

It should be taken into account that the IPDP is adapted to the national postal sector scenario and must have the following characteristics:

a Be comprehensive, in that it considers all the areas for reform (legal, operational, technological, economic and commercial).

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b Make provision for both the short and long term.

c Be approved by all postal sector stakeholders. The IPDP sets out what needs to be done. It details the studies that should be conducted, the areas where decisions should be taken and the initiatives, actions, plans and projects that should be developed during the reform process.

Basic reference guidelines for this subject are contained in Module II of the Guide to Postal Reform and Development. Refer to the IPDP for the country. Part two – Basis for analysis 1 Issues for analysis (current supply, market and costs) Clearly indicate the information enabling analysis of each issue (supply of services; market and costs). When analyzing the service offering, present the information and tables on the status of services and the conditions governing their provision (access, quality and price); indicate the needs with regard to the service offering and the conditions governing the provision of services; and present postal indicators and conclusions on the current service offering. All the information available regarding the market must be prepared in graph form, including information on market volume and value, as well as conclusions on the national postal market and existing basic services. The information obtained should be presented in the costs section, as should tables containing the current service costs and other essential parameters. Cost projections and conclusions on the information and data obtained should also be presented. 2 Scenarios for simulation 2.1 Decisive elements and factors (services and conditions of service provision – access, quality and

price) Briefly mention the methodology used and the selection of fixed and variable factors and elements which will be key in simulating the various scenarios. Describe the universal postal service elements which were adopted as essential for decision-making:

– basic services;

– postal acceptance network;

– sorting network;

– transport network;

– postal delivery network;

– delivery times;

– mail security;

– inquiry processing;

– basic postal service prices. 2.2 Definition of the scenarios Once the data on the decisive elements and factors have been revised, the scenarios can be defined. The factors of each universal postal service element established shall be included in each proposed scenario. This information should be basic, so that a plan for implementing the proposals can subsequently be drawn up.

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The definition of scenarios should be accompanied by summary tables, which should include all the aspects of the universal postal service to be considered, the current scenario and the proposed scenarios for improving each aspect thereof. 3 Calculation of costs and simulations A brief explanation of the cost calculation model should be included, together with the elements and factors taken into account which will affect the various simulation scenarios. Clearly highlight how the various elements have an impact on the UPS costs and investment requirements, which is why it is particularly important for the cost calculation system to be reliable. Briefly present the quantitative considerations used to obtain the UPS cost results in the scenarios simulated. The model can be used to calculate the cost of the UPS for the scenarios established. The proposal adopted will be the one which is deemed to be the most viable, in line with the country's needs and possibilities. A brief explanation of the methodology is required for simulation of the scenarios. The results of the simulation should be set out in such a way as to give a clear idea of the various options available. 4 Conclusions The conclusions obtained from the simulations should be clearly outlined. They should form the basis for recommendation of the best UPS situation for the country. Part three – Universal postal service proposal 1 Guaranteed basic postal services Provide specific details on the level and scope of basic services that the proposal aims to guarantee. 2 Conditions of service provision The details of each UPS element included in the proposed scenario should be outlined, using tables listing the details of the basic domestic postal service specifications. Among the conditions of service provision, the following should be mentioned:

2.1 Access

Highlight the details of basic service provision, as regards acceptance and home delivery of mail.

2.2 Quality (delivery times, security of mail, handling of inquiries)

Include details on the quality of basic postal service provision.

2.3 Price

Indicate the price per level of service and weight step. 3 Costs of service provision Provide details of the costs of providing the basic services guaranteed under the UPS proposal, using information obtained from the cost model and simulations. The costs should be disaggregated and the total estimated cost included.

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4 Forms of financing The proposal must introduce sustainable funding alternatives which would allow implementation of the chosen scenario, as well as the required investment. Sources of funding for the UPS proposal should be pinpointed, and the following indicated:

a Revenue generated by the designated operator, taking into account the financial projections made.

b Additional sources of funding, where the designated operator's own income is not sufficient to finance the UPS:

– reserved area;

– state contributions;

– postal industry contributions;

– alternative sources. 5 Political and economic support and sustainability In addition to being technically viable, the proposal must also be economically sustainable. To this end, the total estimated cost must be detailed and disaggregated, together with the distribution of costs over time and the contributions required to cover costs. It is advisable to present the unit costs for each action provided for in the UPS proposal, so that the activities and costs of both investment and maintenance can be spread over time. All this information should be presented in graphs and tables so as to permit better understanding of the economic support for the proposal. It is also important to achieve the expected outcomes of the proposal. Not only should the proposal be justified from a technical and economic standpoint, but analysis should also be undertaken to achieve the necessary political support. Ultimately, political decisions will either bring the proposal to life or result in it remaining dormant. Awareness-raising should be carried out to garner support for the proposal and to minimize resistance to it on the part of political and social sectors. The plan to achieve political support for the proposal must include at least:

– The main driving force behind the proposal.

– Identification of key partners (government, parliament, regulator, operators, consumers, civil society, etc.).

– Executive summaries.

– Information workshops.

– A communication plan.