DHL 2001 Annual Report Download - page 35

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35
The Group
Group Management Report
The resulting competitive pressure can be seen from the more than 4,200 licenses
issued by the regulatory authority to over 1,000 licensees. Further liberalization
of the postal market in the European Union is currently under discussion.At
present, a reduction of the weight limit stipulated by the EU Postal Services
Directive to 100g as of 2003 and 50g as of 2006 seems realistic. This opens up
additional business opportunities for Deutsche Post World Net on the European
mail markets.As yet, no agreement has been reached at the political level on a
concrete deadline for full deregulation.The prices of services falling under the
exclusive license have been approved until December 31, 2002. The possibility
of future approval procedures leading to lower tariffs cannot be ruled out.
Due to strong growth in electronic media,we expect losses through substitu-
tion in the mail segment.To a large extent we will be able to contain these losses
through advertising campaigns promoting mail communication, an attractive
product range and high-quality sales activities.
Furthermore, customers and competitors may obtain partial access to our
networks.Access and other conditions have been determined by the regulator.
Competition in express and logistics markets has heated up, particularly in
Europe.Nevertheless,continued globalization and stronger world trade present
further growth opportunities.As Deutsche Post World Net has sufficient critical
mass, we will emerge from this competitive environment stronger than before.
In the financial services market, we distinguish between credit risk, market
price risk and operational risk. Postbank uses standard hedging instruments
to offset bank-specific risks. Liquidity risk is monitored in accordance with
the provisions laid down by the German Banking Act and the Federal Banking
Supervisory Authority (BAKred). Compliance with specified limits is moni-
tored daily. A risk system for operational risks is currently being established at
Current regulation in Germany
until Dec. 31, 2007 200g 50g
Current EU Directive 350g 350g
EU proposal: Jan. 1, 2003* 100g 100g
EU proposal: Jan. 1, 2006* 50g 50g
EU proposal: by Dec. 31, 2006
Prospective study** and proposal of European Commission
EU proposal: Dec. 31, 2007 Decision by European Parliament and Council of the
European Union on “decisive” step
EU proposal: Jan. 1, 2009 Decisive step, if approved
Letters Addressed
advertising mail
EU Council of Ministers’ proposed rollback of monopoly areas
* For outgoing cross-border mail, the limit will in principle be 0g. Exceptions (as of 2003: 100g, as of 2006: 50g) are possible if certain
market sectors in individual countries have already been deregulated, or in the case of situations specific to member states.
**Estimate of the effect of complete deregulation as of 2009 on the universal service in each member state.