Discussion Papers

Alex Kalevi Dieke, Petra Junk, Sonja Schölermann

Hybrid Mail in Germany: Market Trends, Business Models and Regulatory Implications

No. 341 / August 2010


The objective of this study is to analyse the developing market for hybrid mail services. Furthermore, is analyses implications of hybrid mail for traditional letter markets, and implications for regulatory policy. The study is based on desk research and interviews with providers of hybrid mail and trade associations. This study is the first comprehensive publication on hybrid mail in Germany.

We define hybrid mail as services that are transmitted electronically to a service provider who then prints, envelops and franks the letter. Final delivery can be by this service provider or by a different delivery firm on its behalf. Unlike letter shops, hybrid mail providers offer a combined service that includes both production and delivery.

The study identifies three typical business models of hybrid mail providers: online portals, customised solutions and international hybrid services. To date, all providers of online portals and customised solutions produce letters at a single printing site in Germany. Providers of international hybrid mail predominantly print letters in the country of destination where local partners deliver the mail. This study includes a price comparison of online portals in Germany. A hybrid mail product launched by Deutsche Post AG (DPAG) in July 2010 (‘E-Postbrief’) ranks among the least expensive products.

This study concludes that hybrid mail is unlikely to have any impact on overall volumes of physical letters. Hybrid mail has little influence on the costs of delivery firms. If at all, only the cost of mail collection might increase due to hybrid mail. As almost all postal access points in Germany are agencies operated by third parties, we do not expect any reductions of the postal access network due to hybrid mail. Senders, especially small and medium-sized businesses, substantially benefit from cost savings by using hybrid mail rather than physical letters. Finally, the study concludes that hybrid mail tends to promote competition on the letters market and on upstream markets.

DP Com, the subsidiary of DPAG that offers the hybrid mail product "E-Postbrief", uses downstream access to the delivery network of DPAG. The main regulatory issue is whether the conditions of this downstream access are compatible with existing downstream access products available to other users – i. e., whether DPAG offers downstream access non-discriminatorily to all competitors and customers. The German national regulatory authority Bundesnetzagentur should carefully examine the contracts between DP Com and DPAG in this respect. Another regulatory question is whether the bundling of upstream services and traditional letter services leverages market power of DPAG into upstream markets. Again, this calls for careful review by Bundesnetzagentur. Finally, the study analyses whether contents and personal data sent by hybrid mail are sufficiently protected by existing legislation – and concludes that they are. Indeed, hybrid mail providers commit themselves to protecting contents above what is legally required. Therefore, we see no need for regulatory interaction in this respect at present.

(Full version only available in German language)

Discussion Paper is available for download.

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