Gay Mitchell (Dublin South Central, Fine Gael)
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Question 83: To ask the Minister for Communications, Marine and Natural Resources if he is satisfied regarding the adequacy of the postal service to meet the challenges of technology and competition in the future; and if he will make a statement on the matter. [11452/07]

Noel Dempsey (Meath, Fianna Fail)
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The ability of the existing postal service and An Post to meet the future challenges of full market opening and electronic substitution are in the first instance, a matter for the board and management of An Post and other companies operating in the market.

Competition has arrived in the postal sector in Ireland and across the EU. The weight limit applying to postal items falling within the reserved area and therefore not open to competition, has been reduced on a phased basis since 2003. The reserved area currently only applies to mail weighing 50g or less and two and a half times the basic tariff for domestic and inbound international mail. Outbound international mail was fully liberalised on 1 January 2004 and the parcels business is fully liberalised, with major international players operating in the Irish market.

To date Ireland has adopted a light-touch regulatory approach to liberalisation so as to encourage and maximise the number of postal operators that might wish to enter the market. Currently, there are 29 firms operating in Ireland with a postal service authorisation from the Commission for Communications Regulation, ComReg. The level of competition is likely to intensify in the coming years. Full market opening of the postal market is due to take place across the EU from 1 January 2009, subject to political agreement.

A vibrant, efficient postal service is an important aspect of any successful economy and it is vital therefore that An Post continues its return to a secure financial footing and prepares to meet the challenges ahead.

The Government is confident that once the initial challenges have been overcome, full competition in the postal market will ultimately be good for both An Post and Irish consumers. It is however, imperative that the company restructures itself effectively and that management and trade unions in An Post work together to transform the company into an efficient and modern service provider by implementing the agreed restructuring programme.

By embracing the necessary changes in a positive manner, management and staff in An Post will help move the company in the direction it needs to go if it is to maintain current contracts and compete for further business.