Postal service shows potential

The domestic postal service has great potential to develop, but first urgent solutions must be found to overcome the existing market difficulties, experts said.General director of Vietnam Postal Corporation (VNPost) Do Ngoc Binh said the domestic postal service market has an average growth rate of 10-25 per cent per year, which has attracted the attention of many enterprises that trade postal and express mail services mainly in large cities such as Hanoi and HCM City.Vietnam is now integrating into the world economy, and the postal market would have new chances to develop, he said.According to the commitments that accompanied World Trade Organisation membership, Vietnam must open the domestic postal service market this year.The move would permit foreign-invested enterprises to enter the local market and spark competition, meaning that local providers would have to improve the quality of their services, Binh said.Vietnam has 44 enterprises that are licensed to trade express mail services, although many others have provided the same services without licences.Nguyen Thai Khang, Information Technology editor at the Vietnam Post newspaper, said many foreign firms were expected to acquire shares at equitised State-owned postal enterprises.However, local express mail service providers were not prepared to co-operate with other local firms in order to develop, due to a lack of investment and low-quality delivery networks, Khang said.Luong Ngoc Hai, general director of Viettel Postal Joint Stock Company (Viettel Post), said the existing economic crisis has affected the local postal service market.Postal firms have not dared to increase their service fees to compete with rivals although the cost of petrol and transport has increased sharply o­n the market. Instead, they have had to restrict operation costs to reduce losses.In the future, Hai said local post firms would have to compete with four global express mail service providers: FedEx, UPS, TNT and DHL. These firms would expand their market shares in Vietnam after the local market opened under the WTO commitments.Hai said it is necessary to build an association of postal and express mail service providers ahead of time, in order to help local firms improve the quality of their services and compete against their larger rivals.Nguyen Thanh Hung, deputy minister of Information and Communications, said the ministry would support the establishment of the association. Local firms should carefully consider the advantages and disadvantages of the proposal to succeed in future business endeavours.Hai also said the State should build a strategy for the development of human resources within the larger scheme to improve Vietnam's postal services.