Correos y Telegrafos S.A.

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Correos y Telegrafos S.A.

Via Dublin 7
Madrid, Spain
Telephone: +34 91 596 30 60
Fax: +34 91 596 37 72
Web site: http://www.correos.es

State-Owned Company
Founded: 1889 as Ceurpo de Correos
Employees: 64,000
Sales: EUR 1.85 billion ($2.5 billion) (2005)
NAIC: 541990 All Other Professional, Scientific Technical Services

Correos y Telegrafos S.A. (known simply as Correos) is Spain's dominant postal service, providing deliveries of more than 5.5 million letters and parcels each year. Correos, a limited liability company wholly owned by the Spanish government, operates a national network of more than 10,000 facilities, including more than 1,900 multi-service branches, nearly 2,000 distribution centers, and more than 8,600 service centers providing postal and delivery service to the country's rural regions. The company also offers online fax, telegram, and digital delivery services. Altogether, Correos employs more than 64,000 people, and posts annual revenues of more than EUR 1.8 billion ($2.5 billion). In addition to regular mail delivery, Correos operates three subsidiaries. Chronoexprés is the group's express delivery wing, operating 57 offices and a fleet of 2,500 vehicles, with total deliveries of more than 1.2 million per year. Correo Hibrid specializes in providing mass-media communication services to corporations. The company's Correo Telecom provides telecommunications services, including internet access and e-commerce services.

ROOTS THE MIDDLE AGES

The modern Correos inherited a role as Spain's central postal service with a history stretching back into the Middle Ages when messenger services were placed under the authority of King Pedro of Aragon. Over time, the position of Royal Postmaster became an important function within the Spanish kingdom.

Spain played a role in the origins of the modern international postal system as well. In the late 15th century, the Tassis family, led by Francisco de Tassis (also known as Franz von Taxis) established a postal service in Italy. Tassis and brothers Ruggiero and Leonardo later extended their postal services to other parts of the Holy Roman Empire, while another brother, Janetto, was appointed Italy's Chief Master of Postal Services. The family then added postal service to Rome and Naples. At the end of the century, the Tassis' horse-based postal service linked Milan and Vienna; and by the beginning of the new century, the Tassis had added Belgium. In 1506, the Tassis were granted royal approval to establish and operate a postal service to Spain as well. Within a decade, the Tassis postal network been extended to Germany and France. By then, the Tassis's postal service had become indispensable to the Habsburg empire, and the family had been granted a monopoly on postal services throughout the Habsburg empire. This monopoly was extended to Spain after the split between the Spanish and Austrian Habsburgs in the 1520s. The Tassis family, which had already been granted titles of nobility in the early 16th century, remained in control of the Holy Roman Empire postal monopoly for centuries.

In Spain, the Tassis family sold their postal service to the new Spanish royal court, when the House of Bourbon, led by Phillip V, ascended to the throne. Under the new king, the Tassis postal service in Spain was placed under direct government operation, becoming a public service for the first time. The Spanish government soon began codifying the postal service's operations, enacting the first round of legislation in 1720. This was later reinforced by the Post Office Act of 1743. In 1755, under the leadership of Rodriguez de Campomanes, the Spanish postal service invented home delivery, establishing the new position of postman. De Campomanes became a prominent figure under the court of King Charles III, playing a important role in developing the country's economy. Under de Campomanes, the Spanish postal service established fixed postal rates and introduced such common features as mailboxes and post codes.

Through the 19th century, however, the postal service remained relatively small, in part because postal fees were more commonly paid by the recipient. This changed in 1850, when the postal service issued its first stamp. With fees now paid up front by the sender, the postal service grew rapidly.

Two years later, another major part of the later Correos y Telegrafos was established: the Spanish telegraph office. The first telegraph line, linking Madrid and Irun, was completed in 1854. In 1855, the passage of new legislation authorized the creation of a national telegraph network, with a mandate to extend the network throughout the country, as well as linking to France and Portugal. That same year, the first public telegraph service began operations. Just ten years later, Spain boasted more than 11,000 kilometers of telegraph lines and a network of 215 offices.

MODERNIZING INTO THE 20TH CENTURY

The creation of Spain's first railroads in the 1880s brought a new expansion to postal services, greatly reducing transportation times and costs. Into the later part of the century, the invention of the bicycle and the automobile provided still greater growth to the country's postal service. In 1889, this service was placed under a new government-controlled office, the Cuerpo de Correos, which took over the monopoly on the country's postal deliveries. In 1900, the company completed its transportation network with the takeover of the country's marine mail operations, controlled by the Spanish Transatlantic Company since the late 1880s. This extended Correos's reach to Spain's outlying islands, as well as to its colonial possessions in North Africa. Despite the introduction of the new transportation methods, horseback delivery remained a feature of the Spanish postal system into the 1920s.

A reform of the country's postal and telegraph sectors under new legislation passed in 1909 created a new organization, Servicio de Correos y Telegrafos. The post office then launched a modernization effort, which included the introduction of a number of new products. Among these were the creation of the Post Office Savings Bank and the introduction of postal money orders. In 1919, the service created a dedicated airmail delivery unit, just two years after the first airmail deliveries launched in Italy.

Still, the automobile became the group's primary means for transport during the early decades of the new century. From just 18 vehicles in service in 1906, Correos' fleet swelled to more than 1,600 by the 1931. The post office had also expanded its network of facilities and by the middle of the 1930s already operated from nearly 8,000 smaller branch and sorting offices, as well as nearly 1,400 main offices. The company's employee ranks had also topped 25,000 by then.

COMPANY PERSPECTIVES

The aim of our company is to provide a universal postal service, by offering the maximum quality and regularity, affordably and efficiently This legal commitment is supported by its image as the established benchmark in the post office sector. We are focused on a service offer that meets the increasing needs of users and clients, along with trying to professionally train and develop its employees. The main priorities for all areas and for all the people in the Correos are quality, efficiency, and innovation. We are leaders in the post office sector in Spain in all aspects related to the non-urgent delivery of documentation and merchandise.

Correos became a central fixture in Spain, not only through its postal services, but also through its savings bank operations. By the outbreak of the Spanish Civil War, Correos already accounted for some 40 percent of the country's savings accounts.

The war cut sharply into the Correos's operations, precipitating an extended drop in deliveries, which continued through World War II, as well as the closing of a large number of offices. The service's operations remained on a reduced scale through the end of the 1940s, in large part due to the Franco dictatorship's isolationist policies. By the early 1950s, however, Correos's volumes once again returned to prewar levels.

The 1950s were to mark a new period of expansion for the service, as the Franco regime changed tact, adopting a policy of liberalizing the country's economy. As a result, Correos grew rapidly through the 1950s and into the 1960s, as its volumes more than tripled.

The liberalization of the Spanish economy provided a huge boost for the country during the 1960s and 1970s, further stimulating Correos's own growth. By the beginning of the 1980s, the service had already topped delivery volumes of more than 4.5 billion letters and parcels per year. Correos's growth came in spite of the fact that Spain was one of the first in Europe to liberalize the post delivery sector, allowing private postal carriers to operate since 1960. Nonetheless, Correos remained the country's dominant postal provider.

NEW STRUCTURE FOR THE 21ST CENTURY

The existence of private competitors encouraged Correos to develop new products and services. In 1981, for example, the post office launched its own express mail operation, Correos Exprés, which began operating both national and internationally. For the international market, the company developed a dedicated international rush service, Postal Exprés Internacional.

Into the 1990s, the Spanish government began taking steps to reshape the Spanish postal service in order to prepare it for the coming liberalization of the European market. In 1992, Correos restructured as an Autonomous State Entity, becoming a commercially oriented body for the first time. The service's restructuring continued through the decade, and in 1997, Correos's status was changed again, becoming a state-owned corporation. This led to a further restructuring in 2001, when Correos was transformed into a fully fledged limited liability company. Nonetheless, into the mid-2000s, the Spanish government retained 100 percent control of the post office.

Through the fist half of the new decade, Correos launched an large-scale investment drive in order to increase its delivery capacity while reducing its operating costs. In 2000, for example, the company began a EUR 240 million spending effort in order to upgrade its automated sorting capacity. The following year, the company spent nearly EUR 50 million opening 54 new branches; the company also began renovating a number of its existing offices.

KEY DATES

1506:: Tassis family granted monopoly to develop and operate postal service in Spain.
1720:: Spanish government under King Philip V buys postal service from Tassis family and institutes first postal legislation.
1755:: Postal service launches home delivery, hiring the first mail carriers.
1850:: Postal service issues first stamp in Spain.
1852:: Establishment of telegraph operations in Spain.
1889:: Creation of Ceurpo de Correos, which takes over state postal monopoly.
1900:: Correos acquires control of marine mail operations, including deliveries to Canary Islands and North Africa.
1919:: Airmail delivery service debuts.
1960:: Spanish postal sector is liberalized, and Correos faces competition from private sector.
1981:: Domestic express mail delivery service, Correos Exprés, is launched.
1983:: International express service, Postal Exprés Internacional, is launched.
1992:: Correos y Telegrafos is restructured as a commercial operation.
1997:: Operations are restructured as state-owned corporation.
2001:: Correos is restructured as limited liability company owned by Spanish government; it merges express service with France's La Poste express service in Spain, creating ChronoExprés
2006:: Correos launches network of 30,000 Telecentros Internet access terminals for rural market.

Correos also worked to develop new products and services. In 2001, the company signed an agreement with La Poste of France to combine their Spanish-based express parcel delivery services into a single entity, ChronoExprés. The company boosted that operation the following year, with the takeover of majority control of another express courier service, Servipack. Also that year, Correos turned to the Internet, opening an online office allowing customers to register parcels, print documents, send faxes, among other services. The company deepened its online operations in 2002, with a plan to launch Internet access, as well as fixed and mobile telecom, television, and other services through its national branch network. For this effort, the company formed a partnership with Telecom, owned by the El Corte Ingles group. In 2005, Correos continued to expand its telecommunications operations, contracting with Telefonica to upgrade and manage the company telephone and internet system. This enabled the company to launch a new online service in 2006, a network of 30,000 Telecentros terminals providing Internet access and online services to Spain's rural markets. With a history reaching back more than 300 years, a thoroughly modern Correos turned its attention to its growth into the future.

PRINCIPAL SUBSIDIARIES

Chronoexprés S.A.; Correo Híbrido S.A.; Correos Telecom S.A.

PRINCIPAL COMPETITORS

El Corte Ingles S.A.; LOGISTA S.A.; Solred S.A.; Telefonica Publicidad e Informacion S.A.; Atento Telecomunicaciones España S.A.; Telvent GIT S.A.; Teleinformatica y Comunicaciones S.A.; Grandes Almacenes FNAC España S.A.; Sociedad General de Autores y Editores de España; Conway, The Convenience Company S.A.; Tecnatom S.A.