The Postal Sector and the Information Society UPU Strategy Conference Dubai, November 14th, 2006

1
The Postal Sector and the Information
SocietyUPU Strategy ConferenceDubai, November
14th, 2006
Mohsen A. Khalil Director Global Information and
Communication Technologies Department
2
Our Key Message

• The Information Society lies at the heart of the
  development agenda
• Widespread access to affordable postal services
  is an important building block in achieving this
  Information Society
• This will only be achieved through serious reform

3
Postal services are an important part of economic
development
300
9.1 letters/capita/year in Sub-Saharan Africa
200
Letters/Capita/Year
100
224 letters/capita/year in Industrialized
Countries
0
0
5000
10000
15000
20000
25000
30000
Source World Bank, 2005 (UPU)
GDP per Capita (USD)
4
Postal Services are an important part of the
Information Society
Information Society requirements
How Postal Services can help

• Information for all
• Efficient use of IT
• Adoption of new IT-based services

• Services in less densely populated areas
• Postal services
• Financial services (e.g. mobile banking, money
  transfer)
• Information
• Adoption of new ICT-related services
• Parcel delivery for e-commerce
• Value-added financial services
• e-signature for payments traditionally paper-based

5
There has been a revolution in ICT in developing
countries
Total Phone Lines
4.0
3.5
3.0
2.5
(in Billions)
2.0
1.5
1.0
0.5
-
1980
1990
2000
2005
LowMiddle Income
High Income
Global Mobile Subscribers
1,400
1,200
1,000
Million Subscribers
800
600
400
200
0
1992
1994
1996
1998
2000
2002
2004
LowMiddle Income
High Income
Source ITU
6
but these countries have seen no equivalent in
the postal sector
Index of domestic letter volumes (2001 1)
Postal volumes have been stable in middle and
high-income countries but falling in low-income
countries
Source UPU
7
What are the implications of this ICT revolution
for the postal sector ?
8
ICT may be substituting for some types of Post

• Some types of mail are expected to decline (e.g.
  bank statements and bills) by up to 20
• But, some types of mail have grown dramatically
  despite widespread use of email and internet
  (e.g. direct mail)
• Other types (e.g. magazines, catalogues,
  addressed Direct Mail) are expected to remain
  stable or grow

Email is not a good substitute for all types of
mail
Customer preferences for direct marketing
channels in Finland, Elkela 2005
Source Ecorys/EC
9
ICT and Post can be complements

• In the US ICT has boosted some types of mail
• 55 of consumers shop online with a catalogue
  in-hand
• Households with internet sent 80 more packages
  and received 60 more packages than those without
  a connection

From European Commission
Source Nader and Jimenez, 2005
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ICT is also an increasingly important input into
postal services

• In theory
• Improvement of sorting technology ? lower costs
  and higher quality
• Product innovation (e.g. through track and trace
  systems)
• Better data ? improved logistical and network
  management
• MIS, ERP, CRM ? improved governance, management
  and customers care
• Better integration of networks ? facilitating
  competition
• and in practice
• The use of ICT has already improved the
  performance of the postal operator in a number of
  developing countries (e.g. Malawi, Trinidad
  Tobago)
• Private postal and courier operators are already
  using advanced technologies to improve the
  quality and range of services (e.g. use of GPS
  systems to map customer addresses in Jordan)

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Strategies for the postal sector in developing
countries
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Improve the quality of service
Trust in postal services in developing countries
is low
GIT Postal Trust survey response to question Do
your trust your countrys postal system
sufficiently to have a friend mail a small
package worth 100 to you (1not at all, 7yes)
Source World Bank, 2005
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Encourage competition

• Recognize existing competition from couriers,
  informal operators and electronic alternatives
• Transparent licensing process

• Reduce market distortions
• Improve operator efficiency
• Allow operators to charge commercial prices
• Allow operators to adopt a differentiated pricing
  strategy to reflect cost structure and market
  considerations
• Minimize market-distorting subsidies

Competition is already a reality in both
industrialized and developing countries
Market share of incumbent operator
Source EC, Lara et al, 2006
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In the context of ICTs

• ICT is both a threat and an opportunity for the
  postal sector
• The future for the postal industry
• Completion of e-commerce transactions
• Delivery of innovative services that harness the
  transformational capabilities of ICT
• Using its network for logistics and distribution
• Reform is needed
• Reform of operators ? quality, efficiency and
  customer focus
• Sector reform ? allow in private participation
  through transparent regulatory framework, allow
  competition to drive investment and innovation
• Use creative mechanisms to ensure services for
  the poor and in rural areas

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The role of the World Bank ?
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World Bank has helped many countries reform their
postal sectors

• 1980 today
• Approx. 50 postal reforms
• Themes SOE (Post Telcoms) restructuring,
  access to finance, e-agenda
• Analytical work on postal reform and economic
  impact
• Current portfolio
• Annual lending commitment mostly in Africa and
  MENA
• Africa Senegal, Niger, Cameroon, Burkina Faso,
  Cape Verde, Nigeria, Rwanda
• MENA Algeria, Egypt, Bahrain, Jordan
• East Asia Pacific SA Samoa, India, (Vietnam)
• Europe Central Asia Azerbaijan

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Some developing countries have succeeded in
reforming their postal services
World Bank Reform in Trinidad and Tobago
Percentage/Index
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The demand for World Bank engagement remains

• Senegal 2004-2008
• Financial restructuring capacity building
  through a private investment promotion project
  updated policy and regulatory framework
• Egypt 2006-2007
• Technical assistance to strengthen postal
  financial services, and PPPs, identify new human
  resources needs and capacity building plans, and
  strengthen policy unit in MCIT
• India 2007
• Technical assistance to India Post - how to
  leverage the postal network through PPPs, and
  scale up service diversification.

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In future, World Bank assistance to the postal
sector will increasingly include ICT

• In Senegal, Niger, Rwanda, Azerbaijan and Malawi
  we advise and provide support to computerization
  and interconnection equipments of post offices

Electronic network
Physical network (post offices)
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Thank You!