Joe Sherlock (Cork East, Labour)
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Question 100: To ask the Minister for Communications, Marine and Natural Resources the prospects of market deregulation in the postal sector; his proposals in this regard; and if he will make a statement on the matter. [27879/05]

Noel Dempsey (Meath, Fianna Fail)
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With globalisation, liberalisation and developments in technology which are changing the way people communicate, all national postal operators, including An Post, have to change very rapidly to stay competitive and commercial in the European postal market. This reflects the change in the market from one dominated by letters to one dominated by parcels and direct mail. Both of these areas are much more open and attractive to competition, especially international competition, than the traditional letters business. Competition in the sector is growing and at present there are 26 firms operating in Ireland with a postal service authorisation from ComReg.

Ireland has fully implemented European Directives 97/67/EC and 2002/39/EC, which set out the requirements for member states on the provision of high quality postal services and liberalisation within their postal networks. Under the directives, each member state is obliged to provide a universal service whereby a minimum level of service must be provided. Both of these directives have been transposed into Irish law in Statutory Instrument 616 of 2002 European Communities (Postal Services) Regulations. The statutory instrument also provides for further liberalisation of the postal market. Since the transposition of the directives, the weight limit applying to postal items falling within the reserved area and therefore not open to competition has been reduced to 100 g from 2003 with a price limit of three times the basic tariff for domestic and inbound international. The reserved area will be further reduced to mail weighing 50 g or less and two and a half times the basic tariff from 2006 for domestic and inbound international. Outbound international mail was fully liberalised on the 1 January 2004.

The second directive also stipulates that the postal sector is to liberalise across the EU in full on 1 January 2009 subject to political agreement. I understand that the next steps for the Commission include a study to be completed on the impact on the universal service of the full accomplishment of a liberalised postal market. Based on the outcome of this study, the Commission will present a report to the European Parliament and Council by 31 December 2006 accompanied by a proposal confirming, if appropriate, the date of 2009 for the full liberalisation of the postal market or to determine alternative steps in light of the study's conclusions.

Furthermore, under the statutory instrument, the Commission for Communications Regulation, ComReg, has been designated as the national regulatory authority for the postal sector. Ireland has adopted a light regulatory approach to liberalisation so as to encourage and maximise the number of postal operators that might wish to enter the market.

The postal sector in Ireland needs competition especially in light of the many internationally traded sectors operating in the country but it also needs An Post to be competitive. I believe that liberalisation and the expected increase in competition will ultimately be good for both An Post and consumers and that the company can continue to be a significant and strong player in the market post-liberalisation.