Effects of changing the USO in Norway

The Norwegian government compensates Norway Post for the so-called net cost of providing postal services included in the universal service obligation (USO). Increased digitalisation and e-commerce is changing the need for postal services and thereby also the net cost of the USO. Against this background, Copenhagen Economics was commissioned by the Norwegian Ministry of Transport and Communications to (i) assess Norway Post’s calculations of USO net cost, which provide the basis for the compensation paid by the government, and (ii) assess the socioeconomic impact (i.e. the impact on USO costs and benefits) of three potential changes to the postal USO.

The main conclusions of our study are:

Based on our analysis of costs and benefits, the Norwegian Ministry of Transport and Communications has proposed to reduce the USO requirement to delivery every other day (i.e. 2.5 days per week).