DHL 2000 Annual Report Download - page 37

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Group Management Report
29
in order to be able to respond swiftly. In support of this objective we use a
standardized IT-based system of opportunity and risk management. This
system, as well as the processes associated with it,is currently being extended
successively to include our international acquisitions.
Special regulatory parameters for the M AIL corporate division
Significant risks for the Group arise from the special regulatory parameters
governing the mail market. Overall, an increasing liberalization with greater
competition and the loss of market shares is expected. The consequences
would be falling sales and declining per unit earnings.Furthermore,stag-
nating volumes are possible in the case of mail as a result of increasing elec-
tronic communication.We are countering this risk with a strategic reorien-
tation.With our strategy of internationalization and expansion of the product
range beyond the classic postal services,we hope to reduce the share of Group
revenue and Group profits accounted for by the mail business.The higher
the share of the competing business areas is,the more independent we shall
be of regulatory influences.
The EU Directive on competition in the European postal market provides
for an upper limit of 350g, up to which transportation of letter items must
be reserved for the traditional postal companies.According to the German
Postal Act,the area of the exclusive license,which is currently scheduled to
disappear at the end of 2002,is much smaller and more restrictive than is
foreseen in the EU Directive.Furthermore,the Postal Act allows for several
exceptions on the basis of which competitors are able to work even within
the exclusive license area,for example on city mail.The increasing pressure
from competition can be seen from the approx.3,000 licenses that the reg-
ulatory authority has issued to around 800 licensees.In the EU further lib-
eralization of the postal markets is currently under discussion. Deutsche
Post World Net welcomes the controlled and gradual opening of markets
and calls for harmonization of market entry conditions within Europe.
Deutsche Post has to request approval for prices of services that fall under
the exclusive license.The current tariffs are approved through December 31,
2002.Deutsche Post World Net will submit an application for relicensing to
the regulatory authority well before the deadline arrives.The possibility of
future approval procedures leading to lower tariffs and therefore to reduced
revenues in the area subject to the exclusive license cannot be ruled out.