Postal Markets and Electronic Substitution: What is the Impact of Intermodal Competition on Regulatory Practices and Institutions

The European postal markets are undergoing a reform which aims at promoting competition on the one hand and protecting the benefits of public services on the other. The important topics concerning postal regulation and the development of markets are: (1) market regime, (2) definition and financing of universal services, (3) market power control, and (4) emerging electronic substitution of postal services. The decrease in mail volumes due to electronic substitution is discussed in the literature (e.g., Nikali, 2008) and experts agree (see CIFS, 2009) that it will strongly impact the development of postal markets in the future. Crew et al. (2008) noted that finding an appropriate co-evolution of regulation and market development is one of the primary challenges of postal reform. The crucial question therefore is how the increasing convergence of postal and telecommunications markets can be mirrored by appropriate regulation (see also Crew and Kleindorfer, 2010).