Eesti Post seeking one-third hike in postal rates
Eesti Post wants to raise the rates of universal postal services by a third, which would bump postage for a standard domestic letter from the current €1.30 up to €1.70. The Estonian-state owned postal operator, which operates under the Omniva brand, hopes that this planned price hike will mean a significant reduction in losses incurred by universal postal services.
Postage for standard letters most recently went up last May, when it rose from €0.90 to €1.30. If the Competition Authority approves Eesti Post's request, the new postage rate of €1.70 will enter into effect from January 1 of next year.
"The prices of all of our inputs have gone up," said Eesti Post board chair Mart Mägi. "That's also why we're asking for higher prices again. But when it comes to the price hike, we're trying to ensure that the price will remain affordable for Estonian residents."
Fees for package delivery would go up as well. Currently, sending a three-kilogram package costs €7.10. If the changes are approved, this will increase to €9.15.
"I'd like to remind everyone that we've actually been providing universal postal services at a loss both in previous years and currently," Mägi highlighted. "Meaning that in reality, the price we charge is still below the actual cost of the service."
Namely, the universal postal services provided in Estonia account for only a small share of the state-owned company's operations, which has grown into an international business. Last year, the company's revenues reached €131 million, with universal postal services accounting for €12 million of this. At the same time, universal postal services resulted in €1.8 million in losses for the company.
Eesti Post is forecasting similar losses for this year. Mägi, however, has higher hopes for next year.
"If the price hike passes as planned, we expect losses to decrease significantly," he explained. "Even as our rates go up, we'll also be trying to implement various efficiency measures. Whether losses will total a couple hundred thousand euros or half a million is very hard to say at the moment."
The postal operator's board chair has also long since awaited changes to the Postal Act that would give the company more flexibility in making decisions regarding the provision of services. For example, he has proposed that letters not be delivered every weekday, but possibly three days a week.
"We hope that, together with expected changes to the Postal Act, we can also move to cost-based pricing in 2026," Mägi added.
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Editor: Mirjam Mäekivi, Aili Vahtla
