The Federal Network Agency applies WIK tools for current price-cap proceeding in the postal sector © Photo Credit: lassedesignen - stock.adobe.com

The Federal Network Agency applies WIK tools for current price-cap proceeding in the postal sector

WIK-Consult has developed tools to determine the X factor by using benchmarks of companies in comparable markets.

In addition to the cost-based approach, the Postal Services Regulation Ordinance provides for a comparative market approach to determine the X factor. According to this, the productivity progress rates of companies in comparable markets with competition can be used when specifying measures. In 2020, WIK-Consult was commissioned by the Federal Network Agency to identify quantitative methods for measuring productivity progress rates and to examine their suitability for regulating tariffs in the German postal market. On this basis, WIK-Consult developed four examples for application in the postal sector, including the corresponding Excel tools, and discussed their strengths and weaknesses. In the summer of 2021, the Federal Network Agency opened the procedure for determining the parameters for the price cap regulation for letter mail items up to 1.000 grams from 1 January 2022. In this procedure, the Federal Network Agency is applying the tools developed by WIK-Consult for the first time in order to check the plausibility of the cost-based X factor with values from the comparative market analysis.

The study (only in German language) is available for download.