In-principle agreement on the Universal Postal Service Pricing Convention to be concluded between ANACOM, DGC and CTT

In accordance with paragraph 4 of article 14 of Lei Postal (Postal Law - Law no. 17/2012 of 26 April), as amended by Decree-Law no. 22-A/2022 of 7 February¹, the criteria governing the pricing of postal services that comprise the universal service are established by a convention. This Convention, which applies for a period of 3 years, is concluded between ANACOM, DGC - Direção-Geral do Consumidor (Directorate-General for Consumers) and CTT (as universal service provider). In the event of an agreement, the Convention must be concluded, signed by the parties and notified to the member of the Government responsible for the area of communications. This must be done no later than 30 July of the year preceding the year in which the criteria are due to apply (paragraph 6 of article 14 of the Postal Law).

ANACOM is responsible for coordinating preparation of the Agreement and is responsible for liaising between the parties during the negotiation, under the terms of paragraph 5 of the same article 14.

Following the negotiation between the parties (ANACOM, DGC and CTT), an agreement was reached on the Convention’s draft text.

ANACOM considers it useful to collect contributions from interested parties (end-users, including consumers, other postal service providers and other organizations) on the in-principle agreement which has been reached on the terms to be agreed within the scope of the Convention;  ANACOM has therefore published the text of the draft Convention  Annex.

The Convention will be valid for three years (from 01 January 2023 to 31 December 2025), in accordance with the provisions of paragraph 4 of article 14 of Lei Postal (Postal Law).

The most important provisions of the draft Convention are briefly summarised below.

In terms of scope, the Convention continues to cover the same services that were covered by previous ANACOM decisions on the criteria governing universal service pricing. As such, the Convention continues to cover the services of correspondence, parcels and newspapers and periodicals that are part of the universal service, including the registered mail service used in judicial or administrative proceedings. Likewise, the Convention excludes special prices and conditions associated with postal services that are part of the universal service offer² but which are governed by the specific regime provided for in article 14-A of Lei Postal (Postal Law).

The pricing of postal services covered by the Convention continues to comply with the following tariff principles:

a) Affordability for all users;

b) Cost orientation, so that prices encourage efficient provision of the universal service.

c) Transparency and non-discrimination.

As regards the price regime applicable to services covered by the Convention, as in the past, these prices are subject to a maximum variation, in each year that the Convention applies.

As such, overall, the prices of the basket of services covered by the Convention are limited to a maximum annual variation calculated in accordance with the following formula:

Where:

CPI  corresponds to the average rate of change in the Consumer Price Index (CPI) over the last 12 months up to June of the previous year, published by INE (Statistics Portugal);

Traffic corresponds to the variation in the traffic of the services covered by the Convention, reported in the 12 month period ending in June of the previous year, compared to the same immediately preceding period;

VC corresponds to an indicator of the weight of variable costs (VC) as a proportion of the total costs associated with the provision of the universal service - its value is set at 16% for each year of the Convention’s validity;

E represents an efficiency factor associated with CTT's activity within the scope of universal service provision - its value is set at 0.5 percentage points for each year of the Convention’s validity;

K corresponds to a factor to be applied in the event of significant changes in the context related to the conditions of universal service provision - its value is determined by agreement subsequent to a proposal from any of the parties to the Convention.

Notwithstanding the maximum price variation applicable to the overall basket, maximum variations are established for each price, on an annual basis and over the overall duration of the Convention.

Bearing in mind the principle of affordability and as a guarantee of protection of the rights and legitimate interests of users, in particular consumers, a maximum annual variation remains applicable to the price of national non-priority mail for items weighing up to 20 grams. This constitutes the service with the greatest relevance in terms of traffic for the occasional user segment (maximum variation of 4 cents per annum).

It is also established that CTT will provide free-of-charge postage (national and international) for items sent to or by blind and partially sighted users or sent to or by organisations representing blind and partially sighted people (excluding air surcharges where applicable).

The principle of tariff uniformity continues to apply, with a single price applied throughout the national territory for national correspondence (items weighing less than 50 grams) sent by occasional users, and for national correspondence (items weighing less than 50 grams) of the service of registered mail and postal notifications.

Comments on the agreement in principle should be sent no later than 15 July 2022, in writing and in Portuguese, by email to convenioprecos@anacom.ptmailto:convenioprecos@anacom.pt.

 In-principle agreement on the Universal Postal Service Pricing Convention to be concluded between ANACOM, DGC and CTT- Full PDF version