Press Releases

ANCOM: the Net Cost of the Universal Postal Service in 2014 Need Not Be Compensated

16.12.2015
 
ANCOM assessed whether the net cost incurred by the National Company Romanian Post (CNPR) for the provision of universal service in 2014 represents an unfair burden and ascertained that the return on capital employed for the universal service segment exceeded the level of reasonable rate of return. Therefore, the net cost for the provision of these services is not an unfair burden for CNPR, and the Authority considers that compensation of the net cost is not necessary.
CNPR is the designated universal service provider in Romania and it has the right to request compensation of the net cost for the provision of services within the scope of universal service, which is the difference resulted between the net costs incurred by CNPR in fulfilling its universal service obligations and the provider’s net cost in the scenario that it conducted its activity exclusively on commercial bases, without universal service obligations. According to the new provisions which entered into force in 2015, the net cost is deemed an unfair burden if it cumulatively meets two conditions regarding the level of the return of capital employed and the materiality threshold of the incomes from the provision of services within the scope of universal service.
ANCOM received on August 14th CNPR’s net cost compensation request, accompanied by a statement on the expenditures, the income and the capital employed corresponding to the provision of services within the scope of universal service for the year 2014, as well as the Factual Findings Report on verifying the request for compensation of the net cost of services within the scope of universal service, prepared by an independent auditor.
In assessing the unfair burden based on the above-mentioned conditions, ANCOM extracted relevant information from the separated financial statements prepared by CNPR for the year 2014.
The Authority evaluated whether the net cost is an unfair burden for CNPR by calculating the level of return on capital employed for universal service segment and ascertained that, in 2014, the universal service provider made a profit on the segment of services within the scope of universal service, and that the return on capital employed was above the reasonable level of return established by ANCOM for 2014 at 13.10%. Taking into account that the first criterion had not been met, and thus the second criterion needed no longer to be analyzed, the Authority concludes that the amount of the net cost is not an unfair burden for the universal service provider, and therefore it will not be compensated.
Access to universal postal service is a person’s right to benefit from the uninterrupted provision of basic postal services, at a certain quality level, at any point on the territory of Romania, at affordable tariffs. A designated universal service provider has the obligation to provide services at affordable tariffs throughout the territory for which it has been designated, including areas situated in exceptional geographical conditions or with low population density, where the volume of correspondence is low and its activity may be therefore unprofitable.
The draft decision regarding the request for compensation of the net cost for the provision of postal services within the scope of universal service in 2014 is available, in Romanian, here. The interested persons are invited to send their suggestions and comments, by 11 January 2016, to the ANCOM headquarters (2 Delea Nouă Street, Bucharest 3), or directly to the ANCOM Registry Office. Comments may also be sent by fax to +40.372.845.402 or by e-mail to consultare@ancom.org.ro.
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