ANACOM determines reduction in prices due to non-compliance with the universal postal indicators on quality of service in 2019

ANACOM has decided to apply the compensation mechanism provided for by law, which comes into play when the universal postal indicators on quality of service are not complied with. This consists of a reduction of prices which should benefit all the users of that service.

These compensation mechanisms aimed at users of the universal postal services shall be applied by ANACOM in accordance with the Postal Act and the Concession Bases in the event of non-compliance with the performance targets set, without prejudice to the penalties applicable. In fact, the Postal Act provides that non-compliance with the service quality parameters and the performance targets is a very serious administrative offence, punishable by a fine, without prejudice to the application of additional penalties.

In 2019, CTT did not comply with 23 of the 24 universal postal indicators on quality of service (IQS) (see table). In fact, they only complied with one of the 22 indicators regarding delays in mail handling and did not comply with the two indicators regarding waiting time in post offices. This is the fourth consecutive year in which CTT has been unable to comply with all the universal postal indicators on quality of service.

It should be recalled that ANACOM, aware of the current fall in the quality of the universal postal service and the increase in consumer complaints seen in recent years, established a new set of IQS in 2018, which came into force in 2019. The aim of this was to create the conditions to ensure a higher level of quality in the universal postal service, by setting more demanding targets for some IQS (a minimum value associated with each IQS, which was lower than the target value, was also removed), and the creation of additional reliability targets, which vary between 99.9% for the cases where speed and security are key (priority mail, registered mail and daily and weekly newspapers) and 99.7% for other mail (non-priority mail, parcels and fortnightly and monthly newspapers), to prevent traffic not delivered within the service standard from being delivered far outside this standard.

The results for the IQS observed in 2019 show that around 50 million postal objects did not respect the service quality standard in terms of speed of delivery (set at 3 business days for non-priority mail) and that around 8 million did not comply with the reliability goal (set at 5 business days for non-priority mail).

It should also be noted that, following the audit carried out by ANACOM on the system for measuring the indicators for 2016 and 2017, which concluded that the measuring system had several weaknesses, ANACOM determined a set of alterations for the procedures for measuring the indicators for CTT, in order to make the measurement more reliable. These alterations had to be implemented by 1 July 2019.

Under these circumstances, ANACOM determined a draft decision stating that the maximum price variation permitted for 2020, for the basket of services consisting of letters, newspapers and parcels, under the ambit of the universal postal service, will be reduced by one percentage point, and that the price for sending non-priority bulk mail should be reduced by 0.31%. Bearing in mind that according to the rules for updating prices, the maximum variation permissible in 2020 for this basket of services was 1.41%, the weighted average variation of the price of letter, newspaper and parcel services could not exceed 0.41%.

By applying the rules set by ANACOM in 2018, the aforementioned deduction of 1% corresponds to the maximum deduction applicable (deduction of 1 percentage point from the maximum price variation allowed for the basket made up of letter, editorial mail and parcel services that are part of the universal service).

In the case of the IQS applicable to non-priority bulk mail, which came into force for the first time since 2019, the price deduction is 0.31% as the IQS values did not meet their performance targets, and the negative deviation is less than 2 percentage points. According to the applicable rules, the maximum deduction (0.5%) applies when the values obtained for each one of the IQS is 2 percentage points or more lower than the performance targets.

ANACOM's draft decision, approved on 27 August, will be submitted to prior hearing by CTT for 10 business days.

As announced by ANACOM on 30.6.2020, the package of measures being prepared for the universal postal service provides for, in the context of the preparation of the procedure for designating the future provider(s) of the universal postal service, maintaining the set of IQS in force in 2019 and 2020, as well as the targets associated with these. ANACOM believes that there is no need to change the level of requirements, but rather to increase the compensation value for users to be applied for non-compliance with the IQS performance targets. Thus, non-compliance with the performance targets will imply a deduction in the annual average prices of the basket of services consisting of letters, newspapers, parcels and periodicals by the universal service provider in question, limited to a maximum value of 3% (currently standing at 1%).

Setting a higher deduction for non-compliance with the performance targets, going from 1% to 3%, is aimed at defining a compensation mechanism that is more of a deterrent for non-compliance with performance targets, without prejudice to the application of other penalty mechanisms provided for by law.