Index of Postal Freedom Turkey (Click here for a printer-friendly version) Overview Turkey’s postal service -- the PTT -- was first established in 1840 as the Ministry of Post by the Ottoman Empire. PTT stands for “Post, Telegraph, and Telephone” -- the three roles it assumed in 1909. In 1939, the PTT was made a Directorate under the control of the Ministry of Transport. In 1984, PTT was reorganized as a so-called State Economic Establishment, and in 1995, the organization was restructured again into the General Directorate of Posts and Turkish Telecommunications Coop as a result of the deregulation of telecom service in Turkey. In 2000, the General Directorate of Posts was changed into the General Directorate of Posts and Telegraph. As a State Economic Enterprise, PTT is entirely government-owned, has its own Board of Directors, and is accountable to Turkey’s Department of Transportation under a basic Postal Law promulgated in 1950 and revised and reissued in 2000. PTT maintains over 4,000 postal outlets within Turkey including 1,056 centers, 2,226 branches, and 830 agencies. PTT employed roughly 28,000 individuals as of 2010.  Liberalization and Universal Service Although universal service is not regulated by current law, PTT is simply “recognized” as the universal service provider throughout Turkey. As of 2005, a national regulatory authority did not exist. PTT worked as both the regulatory and operational body under the control of the Ministry of Transport as defined by Law 5584. Sealed letters, unsealed letters, and postcards are subject to the reserved postal monopoly regardless of weight limits as of December 2005. PTT’s reserve area (monopoly) includes ordinary and registered letters, postcards, greeting cards, printer papers and newspapers, small packages, free-of-charge mailings, literature for the blind, notification papers, and insured letters. Following a Supreme Court ruling, credit card and bank statements also fall within the reserve area. Private firms involved in package delivery are regulated under a separate law No. 4925, but reports indicate that such firms also operate de facto in the area reserved for PTT. The USO delivery standard is set at a minimum of five days per week. Competition As of December 2005, there were 23 private firms (17 national and 6 international) in Turkey providing cargo and courier services transporting parcels, cases, and packages weighing less than 100 kg. Supervision of private firms is carried out by the Ministry of Transport, regional governments, and the police in accordance with the articles of the by-law on Road Transport. Planners are aware that PTT holds a dominant market position. Although apparently not embodied in actual law as of 2005, private deliveries outside of PTT’s reserve area are to be open and provided “without any discrimination.” The process for so-called “access conditions” (licensing of private carriers) had not been provided for in legislation as of 2005. Regulation According to a country report prepared by the Universal Postal Union in December 2005, there is not sufficient independent regulatory authority to ensure fairness in postal markets in Turkey. In the context of “harmonizing” Turkey with EU standards, the country enacted a major liberalization and competition law in 1994, which led to the appointment of a Competition Board. In that same year, the telecommunications industry was largely deregulated. Although studies have been conducted, no independent postal regulatory body had been established as of late 2005. As a result, PTT itself is tasked with setting and maintaining standards of delivery for domestic mail. International mail is subject to periodic audits conducted in collaboration with the Universal Postal Union and PostEurop. The Board of PTT is authorized to set postal tariffs. Domestically, there is no requirement that prices be calculated on the basis of costs. However, international mail tariffs must in part be geared toward the cost of providing service. PTT uses single-price delivery throughout Turkey. Planners are aware of the potential for cross-subsidization of products outside the reserved area by those over which PTT has a monopoly. Turkish officials admit that, as of 2005, price-setting for universal service is not yet tied to actual costs. Further, since there is no separate accounting system for reserved and non-reserved services, it is as yet impossible to determine whether there is in fact cross-subsidization by PTT. Postal workers are exempt from fares, duties, and taxes charged by public institutions and municipalities. The current regulatory state of affairs may perhaps be summed up by a 2008 report on the liberalization of Turkish markets by the European Commission: No progress can be reported in the field of postal services. The legal monopoly regardless of weight limits is still intact. No independent regulatory authority exists in the sense of the acquis communautaire [an EU term for the consensus of EU law and related court decisions]. The accounting system still lacks transparency for want of an appropriate accounting method for reserved and non-reserved services and of separation of accounts. The absence of transparent monitoring of State aid and of supporting policies to reduce distortion has an adverse effect on competition and competitiveness in the economy. Public procurement policies continue to be undermined by exceptions to the regulatory framework. Products and Services PTT provides the following domestic and international services: letter post, parcel post, express mail service (EMS), cash-on-delivery (COD), door to door delivery service (Alo Post), telegraph, telepost, money order, postal checks, bill collection, payment, foreign exchange, train ticket sales, and insurance transactions. Types of insurance sold through PTT include accident, life, liability, emergency health, and travel policies. Perhaps the most important PTT initiative is its PTTBank project, which offers banking services to individuals and corporations through post offices. Prominent in this effort are PTTmatic bank kiosks and PTTcards for postal checking accounts, with electronic tie-ins to conventional credit card systems. Money transfer and bill payment, especially in rural areas where there are no conventional bank services, have allowed PTT to put down deep roots within the nation’s financial infrastructure. By 2010, 1,997 PTT post offices had been upgraded to banking outlets. In 2009, PTT derived 123 million TL in revenue on commissions from financial transactions. That commission revenue rose by 31 percent in 2010. As in many other countries, the Turkish post office processes financial transactions including pensions, bill distribution and collection, ticket and subscription sales, lottery entries, prepaid cellular cards, and cross-border payments. In 2009, PTT derived 23 million TL on basic banking services alone. In total, commission revenue came to 64 million TL in 2010. PTT has also invested heavily in advanced sorting and electronic processing, scanning, and tracking technologies. In 2010, Turkey started to roll out a hybrid-mail system whereby mail can be electronically scanned at one post office and remotely printed for delivery at a destination printing center. The post claims that such techniques cut delivery times and transport costs. PTT is moving quickly into the e-document business by guaranteeing via software systems the integrity, tracking, delivery, and signatures on documents. New computer software allows post offices to provide customers with delivery dates for mail. Since 2008, PTTcargo has been competing in corporate logistics, introducing advanced software and facilities for state-of-the-art processing, tracking and transport. This business produced 60 million TL in revenue in 2010, an increase of 65 percent over the previous year. PTTcargo even has a special unit to cater to the large number of Turkish citizens who make the pilgrimage to Mecca. PTT’s Express Mail service, begun in 1983, delivers throughout Turkey and to 110 foreign countries. EMS generated 56 million TL in 2010, a 17-percent increase over 2009. It includes what the Turks call door-to-door delivery, whereby information sent into the postal service via telephone or Internet can be delivered to the recipient’s door and tracked within a guaranteed time period. The total revenue for all PTT logistics services in 2010 was close to 130 million TL. PTT also offers a service whereby a consumer may retrieve a printout of important mail from an automated kiosk 24 hours a day, 7 days a week. PTT is also rolling out promotion and marketing services which use the mail to drum up business for PTT clients and installing call centers which will process inquiries and tracking on a 24/7 basis. Structure and Mail Volume From 2009 to 2010, total PTT profit fell from 230 million Turkish lira (TL) to 144 million TL. Operating income for 2010 increased 9 percent while non-operating income decreased 32 percent. The decline in profit represents a drop of 38 percent from 2009. Operating costs rose 11 percent, with an 18 percent increase in transportation costs for the year. PTT processed 1.015 billion domestic letters in 2010, a decrease from 1.066 billion items in 2009. It handled 17.2 million international letters in 2010. International traffic -- especially money transfers -- was concentrated in the sizeable Turkish expatriate communities in Germany, Austria, and Belgium. PTT breaks out its revenue and expense numbers into Postal Services, Telegraph Services, Logistic Services, and Non-Operation and Other. In 2010, Postal Service revenues were 936 million TL with expenses of 871 million TL. Telegraph Services posted a loss, with revenues of 6 million TL and expenses of 11 Million TL. Logistics also posted a loss, with 129 million TL in income and expenses of 172 million TL in expenses. Parcel Post reported 333 million TL in revenue compared to 306 million TL in expenses. Non-operation revenue came in at 162 million TL, with 62 million TL in expenses. Total revenues were 1.566 billion TL against total expenses of 1.423 billion TL to produce 2010 profit of 144 million TL. Turkish postal services are subject to value-added tax. On a comparative year-by-year basis, Postal Service revenue shows major growth -- going from 554 million TL in 2003 to 2010’s 936 million TL. However, expenses have been rising as well. Telegraph revenues have been stagnant despite sharply rising expenses. PTT profits have declined from a high of 377 million TL in 2008 to 2010’s 144 million TL. A 58-million TL increase in investment over that period -- much of it coming in Anatolia in the east -- accounted for only part of this reduction. Investments of 140 million TL are projected for 2011. Letter mail volume in 2009 was 1,087,295 pieces, which produced a revenue stream of roughly 800 million TL. In 2010, letter volume decreased by 5 percent. However revenue increased by 6 percent. Oddly, telegraph services -- e-telegraph -- are offered via internet connections and generated close to 4 million TL revenue in 2010 on declining volume. PTT offers inbound and outbound tracking for express mail (76 countries), parcels (81 countries) and letter post (41 countries). Future Like the rest of Europe, Turkey has been affected by the economic downturn. For a period, government enterprises were given the opportunity to take out special loans from the central government. According to a 2008 U.S. State Department cable made public by Wikileaks, the president of Turkey’s Privatization Agency, Metin Kilci, said that his agency was planning to privatize PTT over the next two years. Obviously, that has not happened, as the post remains entirely state-owned. In its latest publications, PTT projects that current investments will pay off in future revenues. It predicts a profit bounce to 325 million TL for 2013. Useful Links PTT 2010 Annual Report (in Turkish and English) PTT 2010 Statistical Report (in Turkish and English) A 2008 EU Report on Turkey’s progress towards EU standards