An Post gets green light for stamp price increases

The cost of a standard postage stamp is set to rise by 5c to 60c.

The increase, approved yesterday by the Commission for Communications Regulation (ComReg), is half the 10c increase originally sought by An Post.

The standard stamp for foreign mail will rise 8c to 90c, with a range of other charges also to rise.

ComReg claimed the sought-after 10c increase could have accelerated the decline in mail volumes.

According to An Post, revenues from postal services have declined by 28% since 2008 and it has forecast annual declines of a further 5% per annum over the next two years.

ComReg estimates the price hikes will generate €19m extra revenue in the first year for An Post. But it warned this figure will decline over subsequent years due to a predicted reduction in mail volumes.

An Post’s financial position remains precarious as the extra revenue will cover less than one third of its expected losses of €65m in 2012.

ComReg also expressed concern that An Post’s cash reserves have been declining at a rate of €50- €90m per annum since 2008.

It noted staffing levels had remained largely the same since 2007, despite mail volumes decreasing by 23% over the same period.

An Post has attributed its ailing finances to a sharp decrease in mail volumes due to the economic downturn and the trend towards electronic mail substitutes.

ComReg said that price increases could, at best, only form part of an overall solution to An Post’s financial viability.

It stressed An Post also had to address measures such as cost containment and the development of new revenue streams as “a matter of urgency” to ensure the provision of a universal postal service at an affordable price for all.

The new prices will come into effect on Apr 2.