Penalty threat forces Itella to reduce postage stamp tariffs

print this

In what is widely seen as a small blow on behalf of consumers, Itella - formerly known as Finland Post - is to reduce the prices of postage stamps from the beginning of August.
      Letters sent as First Class Post will in the future cost 75 cents instead of 80 cents. Stamp prices for Christmas cards will be reduced from 60 cents to 55 cents.
     
Itella agreed to reduce its postage stamp tariffs after the Finnish Communications Regulatory Authority (FICORA) had threatened to impose on it a hefty penalty payment of EUR 35,000 per day from June 2nd onwards unless Itella cut its stamp prices before that date.
      According to FICORA, Itella has been overpricing its services by 25 per cent.
      However, FICORA is willing to settle for the promised reductions for the time being.
      ”Imposing penalty payments is no longer necessary. Itella will be liable for making sure that the reductions are sufficient. We will monitor the prices from here onwards”, notes Marja Lehtimäki from FICORA.
     
The dispute over moderate pricing between the Regulatory Authority and Itella is still pending at the Helsinki Administrative Court.
      In other words, the decision to reduce the prices will not resolve that confrontation.
      According to FICORA, the delivery of letters and parcels up to ten kilos are part of general statutory services, which should be provided at cost price.
     
According to Itella, the company cannot afford to reduce its prices, as the profitability of postal services has collapsed after electronic mail has become an increasingly used communication tool, and "snail mail" volumes have fallen away.
      ”The dispute over prices has caused so much confusion and uncertainty among our clients that we have decided to try to clear the situation at least for the time being”, reports Kari Kivikoski, Senior Vice President responsible for Itella Mail Communication.
     
The changes that take effect from the beginning of August will reduce the tariffs for individual consumers, but they will not affect the contracts between Itella and its corporate customers.


Previously in HS International Edition:
  Itella to begin opening letters and delivering them via email (31.3.2010)
  Over-75s will get their mail delivered to front door after all (29.1.2010)

Links:
  Itella
  Finnish Communications Regulatory Authority (FICORA)

Helsingin Sanomat