The impact of the USO on the profitability of postal service provision
AbstractThis study aims at investigating the order of magnitude of financial burden of the universal service obligation for the universal service provider, Itella, in the Finnish postal sector. It evaluates the difference between universal service provider’s profitability with the universal service obligation and without it. The data suggest that the provision of universal letter services in compliance with the law causes a notable financial burden for Itella. The profitability of the universal service provider is clearly lower than that of other firms active in the Finnish postal and courier activities sector. During the years 2005–2012, the annual loss due to the universal letter service obligation was about 76 million euros, or 5–8 percent of the turnover of the universal service provider.
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Bibliographic InfoPaper provided by The Research Institute of the Finnish Economy in its series ETLA Reports with number 19.
Length: 20 pages
Date of creation: 18 Nov 2013
Date of revision:
Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services
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