TRAIN POST

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TRAIN POST The Universal Postal
Service
Module 2 Progress Test REFORM STRATEGIES
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1 - Privatisation
Please click on the correct statement Privatisati
on of a traditional government-owned postal
operator
....is an essential further step after its split
from telecommunications.
....cannot work effectively unless 100 of the
shares are free-floated.
....is a necessary part of postal market reform.
....is normally accompanied by a limited monopoly
in the postal market.
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You said that privatisation of a traditional
government-owned postal operator is an essential
further step after its split from
telecommunications.
That is wrong.
The split between telecommunications and post is
a prerequisite for privatisation, because the two
sectors have a quite different cost and revenue
nature, but just because they have been split
does not mean that either has to divest itself of
government ownership.
Try again
4
You said that privatisation of a traditional
government-owned postal operator cannot work
effectively unless 100 of the shares are
free-floated.
That is wrong.
Placing only part of the shares on the open
market is a sensible first step, and is the
position for the majority of countries who have
privatised successfully.

Try again
5
You said that privatisation of a traditional
government-owned postal operator is a necessary
part of postal market reform.
That is wrong.
Market reform can be fully successful when the
universal service operator is wholly
publicly-owned, provided that the postal
regulator is independent of the government.
Try again
6
You said that privatisation of a traditional
government-owned postal operator is normally
accompanied by a limited monopoly in the postal
market.
You are right. The monopoly consists of
reserving to the Universal Service Operator a
specific part of the letter post, so that there
is a guaranteed basic income to support the
mandated service.
Next question
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2 - Market Structure
Please think of the word which would best fit the
missing word in the following statement
The fundamental question for reform of the sector
is whether the universal service operator is
given exclusive rights to all services or whether
certain services are open to .........
.............. .
free competition.
When you are ready, please check your answer by
clicking the mouse button anywhere.
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2 - Market Structure
Please think of the word which would best fit the
missing word in the following statement
Services reserved to the USO may be legally
defined by the support price, the class or
service, or the ............ ...........
item weight.
When you are ready, please check your answer by
clicking the mouse button anywhere.
If you are not too clear on this point, please
look at Handout 2 , page 3
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2 - Market Structure
Please think of the words which would best fit
the two missing words in the following statement
A major question is whether, apart the
................ ........ services, any
further postal services are to be included in the
universal service.
mandatory core
When you are ready, please check your answer by
clicking the mouse button anywhere.
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2 - Market Structure
FINALLY, please think of the word which would
best fit the missing word in the following
statement
A key policy decision is how the
.................. function is to be assured
operational independence from the government.
regulatory
When you are ready, please check your answer by
clicking the mouse button anywhere.
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3 - Cost of the Reserved Services
Click on which of the following statements you
believe is correct.
Before finalising the structure of the universal
services, there must be a sound cost
assessment.The primary emphasis must be placed
upon ...
A. ..the current costs of the postal operator.
B. ..the costs of services in loss-making
geographical areas.
C. ..the estimated costs of a future level of the
universal service.
D. All of the above statements.
E. None of the above statements.
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Correct. The starting point of the analysis is
to assemble hard data on what are the current
costs.
Next question
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It is of course necessary to work out how much
the future level of service is likely to cost,
but the better answer would have been to first
make sure that you have clear figures about the
present operations.
Next question
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No, it is wrong to concentrate on the
loss-making areas. These are usually only a
small part of the whole story.
Try again
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You were asked what is the primary emphasis in
the costing process. You have to choose either
A, B or C.
Try again
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You said that none of the answers was correct.
Actually, two are quite reasonable.
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4 - Financing Mechanisms
Three models have been proposed for funding the
Universal Postal Service. Below are several
statements about this problem. Please consider
whether each of the statements below are TRUE or
FALSE, and when you have decided, click on your
choice
The Government Funding Model would be a good
solution if it were not for the danger of changes
in political leadership. Under the Industry
Funding Model, there has been plenty of
experience, but most of it with poor results. The
Reserved Service Area Model has been found the
best basis for sustainable financing in both
developing and developed countries. It is a
mistake to provide government funding to support
a reserved service system of financing.
False
True
True
False
True
False
True
False
If you are not too clear on any of these points,
please look again at Handout 3, pages 12-14
Next question
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You said it was true that the Government Funding
Model would be a good solution if it were not
for the danger of changes in political leadership.

• That is not true. Even if the government were
  stable and carried out its obligations
  consistently,
• the Government Funding Model has several other
  deficiencies
• Its long-term sustainability is doubtful.
• It tends to require increasing government
  funding to keep pace with rising costs.
• It is unsuitable for resolving efficiency and
  competitiveness issues
• It is inconsistent with the goal of building a
  financially self-sufficient postal operator.

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You said it was false that under the Industry
Funding Model, there has been plenty of
experience, but most of it with poor
results. That is not correct, the statement is
true. Enforcement of industry funding has been
difficult, costly to control, and it is often
evaded. .
Continue
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You said it was false that the Reserved Service
Area Model has been found the best basis for
sustainable financing in both developing and
developed countries. That is not correct, the
statement is true. There has been plenty of
experience that, properly designed, reserved
services are a viable option for financing the
universal service. .
Continue
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You said it was true that is a mistake to
provide government funding to support a reserved
service system of financing. That is not
correct, the statement was wrong. In the early
stages of introducing a reserved services system
it is often necessary to have some temporary
government financing to underpin the system while
it develops.
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Correct.
Even if the government were stable and carried
out its obligations consistently, the Government
Funding Model has several other deficiencies
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Correct.
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5 - The Service Agreement
On the right is a list of some of the aims of a
reserved area agreement between the government
and the Universal Service Operator. Can you name
two more? Think about this, then click the mouse
to see the answers.

• define the obligations and responsibilities of
  the two parties to the agreement
• ensure the financial sustainability of the
  operator
• ensure the continuity of universal postal
  service
• ensure payment of universal postal service costs
• specify the density of the postal network
• meet customer and public needs
• ?
• ?

establish price control
control service quality.
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6 - Free Market Pricing
Imagine that, as a senior member of the
designated Postal Regulators office, you are
attending a meeting called by the Government to
settle some remaining issues on the
liberalisation of the postal market. A
government representative states her concern that
with free market pricing there is the danger of
abuse or unfair practices by the private
operators, and there is nothing that the
regulator can do about that.
How do you answer this point? Please think about
this, then click to check your answer
In the postal sector, a fully free market is not
appropriate. It is standard practice
internationally for the national regulator to
intervene, and if essential to advise the
government to impose price control on the
problematic services.
Next question
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7 - Modernising the Public Operator

• To face up to the new demands of a liberalised
  market, the public operator will need to
  continuously modernise itself. The likelihood
  that this will be feasible depends upon three
  main factors. Here are two of them
• its financial situation
• the realism of its development and business
  plan
• Can you suggest the third factor?

• the state of its operational development

Final question
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8 - External Support

• To carry out a reform program, the postal sector
  in some countries may need outside technical
  assistance or financing.
• Who should you approach first to discuss the
  possibility of such assistance?

The Postal Development Action Group of the UPU.
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That is the end of this progress test. We hope
it confirmed your knowledge of reform strategies
for the postal sector.
Click here to finish the test
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