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2019 Universal Postal Service Net Cost Meets Compensation Conditions

14.10.2021

 

During an online session of the Consultative Council, ANCOM adopted the decision on compensating the net cost of CNPR’s providing postal services under the universal service obligation in 2019, by RON 9,640,585. The Authority’s assessment showed that the provision of these services constituted an unfair burden for CNPR in 2019, the two conditions provided by the law being cumulatively met.

CNPR is the designated universal service provider in Romania and, in this capacity, has the obligation to provide the services within the scope of universal service throughout Romania, being entitled to requesting the compensation of the additional costs incurred by this activity.

The net cost of universal service provision

The net cost of the universal service obligation is the difference between the net cost borne by the designated universal service provider as a result of fulfilling the universal service obligations and the net cost incurred by the same provider if it operated exclusively on commercial bases, without the universal service obligations.

According to the legislation in force, the net cost is an unfair burden for the universal service provider only if two conditions are cumulatively met: the level of return on average capital employed recorded from the provision of services within the scope of universal service under the legal obligations is below the weighted average cost of capital determined by ANCOM and the value of the net cost determined by the Authority exceeds the materiality threshold of 3% of the revenues registered by the designated universal service provider following the provision of services within the scope of universal service.

The Authority analysed whether these two criteria have been met in order to assess the unfair burden character of the net cost incurred by CNPR in the provision of services within the scope of universal service in 2019.

Net cost compensation

ANCOM analysed in detail the data and the assumptions used by CNPR in preparing the net cost compensation request, the calculation methodology and the net cost actual calculation, as well as the additional information provided by CNPR. Where necessary, the data and the actual calculation of the net cost value were adjusted. Thus, CNPR’s obligations as a designated universal service provider were an unfair burden in 2019, the value of the net cost registered by this company in 2019, including intangible benefits, being RON 18,372,178. The maximum amount that can be compensated is RON 9,640,585, representing the value of the net cost that could be compensated until reaching the reasonable level of return on average employed capital registered from the provision of services within the scope of universal service.

Net cost financing

The net cost compensation mechanism is to be established by Government Decision, by resorting to one of the following financing sources: from state budget funds, in compliance with the national and European legal framework in the field of state aid, or by sharing the net cost among postal service providers and/or users, in compliance with the national and European legal framework in the field of state aid.

Universal postal service

Access to the universal postal service is a person’s right to benefit from the uninterrupted provision of certain postal services (the services within the scope of universal service), at a certain quality level, at any point on the territory of Romania, at affordable tariffs.