PostNL has decided to continue to invest in the development of its Italian operation, Nexive, following the strategic review of its international activities that was announced in the beginning of May.
"Nexive contributes positively to PostNL’s results and has growth potential in the Italian market for mail and parcels with its own last mile delivery network," the Dutch postal utility announced today.
"PostNL supports local management and expects that they will be able to grow Nexive’s market share by expanding its customer base, increasing the geographical spread of the Formula Certa network as well as offering additional value added services to its customers. Also Nexive’s parcels network shows good prospects for profitable growth," the company added.
Nexive has been operating in Italy since 1998. Its more than 5,500 employees and partners currently handle about 500m items a year, reaching about 80% of Italian homes.
The strategic review of PostNL's activities in the UK resulted at the end of July in an agreement on the main conditions of an intended management buy out of Whistl. The strategic review of its German activities is ongoing.
In a separate development, PostNL said that the Dutch Authority for Consumers and Markets (ACM) had recently published a couple of decisions which regulate access of other postal operators to PostNL’s network. It added that "a clearer view on the possible measures of ACM in its conclusion on significant market power" had also arisen.
"PostNL is concerned that the consequence of these decisions and possible measures could hamper the reliability and accessibility of postal delivery in the Netherlands." It estimates that the financial impact for PostNL could add-up to €30 million-€50 million in a period of three to four years, with first effects expected to be visible in 2016.
Elaborating on the impact of the ACM's decisions on the postal market, it highlighted "possible adverse consequences" and "possible measures for the postal market as these stimulate the resale of PostNL services rather than competition between postal networks."
PostNL added: "This creates the possibility for postal operators to collect mail from smaller customers and offer these to PostNL for discounts that are intended for large customers. PostNL expects the erosion of its tariff structure, increased complexity and additional operating costs. On the longer term, this could result in price increases, accelerated decline of the postal market and pressure on future innovations."
Focusing in more detail on the financial impact of the ACM's decisions, PostNL said: "The decisions recently taken by ACM concern a tender of the Municipality of Rotterdam and the 2015 Tariffs. Following consultation, the details as to how these decisions will have to be implemented have become clearer to PostNL. With that, a picture has also emerged of the potential consequences of the proposed measures regarding significant market power. PostNL is now in a position to estimate the potential financial impact in the medium term. PostNL is making every effort to keep the financial impact at the lower end of the bandwith.
"PostNL is arguing for more proportionality and balance in the decisions and measures concerning the 24 hours bulk mail volumes. The challenge is to ensure that there is healthy competition without effects that will cause unintended damage to the postal market. This is particularly important in such a strongly declining market. The company is in ongoing talks with ACM about this. It remains our common interest to safeguard a reliable and accessible postal network in the Netherlands; also for the future."
