The document summarizes Algeria's legal framework for financing universal postal service. Key points include: 1) Postal operators contribute 3% of their turnover to a universal service fund managed by the independent postal regulator. The fund finances universal service programs and compensates the designated postal operator for any deficits from providing universal services. 2) The state may also provide funding according to amounts set in financial laws. 3) Challenges include the designated operator's lack of cost accounting and the joint nature of the universal fund, which finances both postal and telecom universal services.

1. Financing of the universal postal
service (Algerian legal framework)
CA Committee 1 (Governance and Regulatory Issues), 9 April 2014

2. Introduction:
• Discussion before the reform (concepts of public service/universal service)
Some expressed concerns regarding the postal reform (planned by the state) and
thought that alignment (bias) towards the concept of "universal service" would
hasten the disappearance of the public service
Justifications
 Concept of public service a consequence of state monopoly
 Relinquishment by the state of certain services (privatization of public
companies, non-financing of services deemed to be too expensive, etc.), shares
valued at different rates (moving towards less of a monopoly, hence the gradual
disappearance of public service)
• Declaration of government sectoral policy (allaying concerns)
 Policy of cautious opening up of the Algerian postal market
 Preservation of a universal service (seen as the other side of public service)

3. • Implementation of a legislative (2000–2003 law laying down the general rules
for the Post and telecommunications) and regulatory (decrees) framework
which takes into account five key aspects
1 The need to maintain a minimum service for all citizens
2 Definition and implementation of the universal service (rollout programme
so there is a state presence in remote areas)
3 Independent regulation through an independent authority
4 Legal systems which conform to the features of the reform (implementation
of three systems to organize the postal market)
5 In addition, the state guarantees the financing of services deemed
necessary to citizens (creation of a fund to finance the universal service)

4. The regulations provide for a mixed funding method for the universal postal service
Contribution of postal operators: Contribution of 3% of turnover for operators in
the authorization and simple declaration schemes, including the designated
operator, minus any costs relating to the exchange of national and international
accounts. These costs relate to transport costs, transit charges and terminal dues
The operators concerned are:
• Five operators (international express service)
• Fifty operators (domestic mail)

5. – The contribution is paid annually in one payment
– Payment dates are set by the regulatory authority
– A detailed statement of accounting operations, certified by their auditor, is sent
by postal operators to the regulatory authority at the latest four months after
the end of the financial year
Possible state contribution: Possible funding from the state for which the amounts
are set by financial law
These contributions are paid into a special fund dedicated to the financing of the
universal service

6. Regarding the universal service fund
– The management of the universal service fund is entrusted to the regulator.
The financial resources allocated to the universal service are included in the
regulatory authority's budget. These resources are reserved for the exclusive
financing of the universal service
– The fund is a joint fund for both the Post and telecommunications (telecom
operators contribute more than 98%)

7. •Contribution of operators
under the authorization
scheme (international
express service)
3% of turnover
• Contribution of operators
under the simple declaration
scheme, including the
designated operator
(domestic mail over 50 g)
3% of turnover
• Possible state
contribution
Financial law
Universal service fund
managed by the ARPT

8. In the framework of the universal service, the regulator has the following
prerogatives
• Produce the annual plan of operations considered under the universal service
(development plan)
• Request additional funds, when necessary
• Implement the universal service plan and allocate the funds collected for this
purpose. In order to do so, the regulator carries out the following actions:
 Approves the universal service's annual budget for operations and programmes
 Authorizes the expenditure commitment for the universal service
 Prepares and approves separately the universal service accounts
 Presents a report to the Minister of Posts, each year, on the development of the
universal service, including the points outlined above. The report is made public

9. Compensation for the provision of the universal service
Compensation of the designated operator has been delayed (mainly due to the
lack of terms of reference)
Policy:
The Minister of Posts gave a second wind to the project (2011)
 Development of terms of reference (committee comprising representatives of
the regulator, the Ministry of Posts and the designated operator)
 Evaluation of costs (working group made up of financiers and postal workers)

10. Compensation for the provision of the universal service (continued)
– The terms of reference for the provision of the universal postal service
(prepared in 2011) require the operator to maintain a cost accounting system,
allowing for the determination of the actual costs, income and results
associated with each segment provided
– Otherwise, activities need to be accounted for separately, in order to calculate
costs
– The compensation procedure is clarified in the terms of reference and takes
into account the deficit in the provision of the universal postal service

11. The regulator faces constraints regarding the compensation of the designated
operator
– Lack of cost accounting by the designated operator
– In addition to financial compensation for the deficit recorded in the provision of
universal service, the designated operator is granted a national monopoly on
mail under 50 g
– Management of the universal service fund due to its joint nature (Post and
telecommunications) – the contributions of the telecom operators finance the
universal postal service

12. Handover of third cheque to the designated operator (Algerian Post)
The working group began its evaluation of the costs of the universal postal
service, borne by the designated operator, in 2011, for the financial year 2010
The regulator gave the third cheque to the designated operator in January
2014 for the financial year 2012
Among the goals set this year:
Proposed revision of the contribution to the universal service fund given by
operators under the simple declaration scheme (annul this contribution for
operators with a poor turnover/negative net result or else put in place a scale)

13. Thank you
for your
attention