February 15, 2007
Postal reform has stalled in many countries, but last week Singapore proved a happy exception. The city-state committed to open its market for "basic mail" service to foreign and domestic competition, says the Wall Street Journal.
- The announcement mandates Singapore's media and communications regulator to end Singapore Post's (SingPost) monopoly on delivery of letters and postcards on April 1.
- The move completes a cycle of privatization that started in the 1970s, when the city-state liberalized mailing of printed papers and parcels.
Despite the liberalization, not all barriers were broken down; the announcement did come with a few caveats, says the Journal:
- SingPost will keep a firm grasp on the so-called "master keys" that provide access to apartment-building mailboxes.
- Any new delivery service will be obliged to either spend the money to go door-to-door or pay SingPost a carry fee to deposit letters in mailboxes.
- Anyone who wants to set up a full-blown competing mail service must acquire a license that will require the company to set up a collection and distribution infrastructure to rival SingPost's -- a prohibitive cost that's expected to deter many new entrants from undertaking island-wide mail service.
Nevertheless, the move will benefit many businesses, most of which are concentrated around the city-state's downtown strip. The liberalization of basic mail marks a major step toward competition, which could see SingPost losing as much as 15 percent of its current market share by 2001.
Source: Editorial, "SingPost Smarts," Wall Street Journal, February 14, 2007.
Browse more articles on Tax and Spending Issues