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The impact of the USO on the profitability of postal service provision


  • Koski, Heli


This 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.

Suggested Citation

  • Koski, Heli, 2013. "The impact of the USO on the profitability of postal service provision," ETLA Reports 19, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:report:19

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    References listed on IDEAS

    1. Nikulainen, Tuomo & Tahvanainen, Antti-Jussi & Kulvik, Martti, 2012. "Expectations, Reality and Performance in the Finnish Biotechnology Business," Discussion Papers 1286, The Research Institute of the Finnish Economy.
    2. Hoetker, Glenn & Agarwal, Rajshree, 2005. "Death Hurts, But It Isn't Fatal: The Postexit Diffusion of Knowledge Created by Innovative Companies," Working Papers 05-0100, University of Illinois at Urbana-Champaign, College of Business.
    3. Hyytinen, Ari & Määttänen, Niku & Lassila, Jukka & Valkonen, Tarmo, 2010. "Eläkevaroilla vauhtia Suomen talouskasvuun?," Discussion Papers 1224, The Research Institute of the Finnish Economy.
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    More about this item


    universal service obligation; profitability; net cost; postal services;

    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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