Deutsche Post banks on e-letter boost in 2010

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Thu Oct 8, 2009 11:14am BST

* Sees market impact from middle of next year

* No decision on tariff for electronic letter

* Deutsche Post shares up 2 pct

(Storifies, adds quotes, detail, background)

By Matthias Inverardi

DUESSELDORF, Oct 8 (Reuters) - German postal services company Deutsche Post (DPWGn.DE) expects its "e-letter" project, which it hopes will rival email, to hit the market by mid-2010, the manager leading the company's most important strategic project said.

The Bonn-based company is developing a format for an electronically sent letter, which is more secure and reliable than email, to make up for lower profits from the conventional letters -- one of its main products -- due to the use of email.

"We expect to be clearly visible in the market from mid 2010," said Johannes Helbig, manager at the company's letter division.

It was still too early to say how much the company would charge customers for sending an electronic letter, he said.

Deutsche Post will compete with a similar product from Deutsche Telekom (DTEGn.DE) and favours as much competition in the new market as possible, Helbig said, as the German parliament is developing standards for the electronic letter.

Sluggish consumer spending and shrinking business investments have been hurting postal companies around the world, and the World Trade Organisation has forecast global trade volumes would fall 9 percent this year, the sharpest decline since World War Two.

Deutsche Post's mail division, which generates more than half of the company's operating profit, needs to revive earnings as it may end up posting a loss over the long run, the unit's head, Juergen Gerdes, said on Aug. 30.

The company, right now, is benefitting from a market share of close to 90 percent in Germany's 6.5 billion euro ($9.59 billion) per year letter mail market, where it has little competition from providers such as TNT TNT.AS.

Shares in Deutsche Post were up 2 percent at 12.835 euros by 0944 GMT, outperforming a 1.2 percent gain in Germany's blue-chip index .GDAXI.

($1=.6775 Euro)

(Writing by Peter Dinkloh; editing by Simon Jessop)

((peter.dinkloh@reuters.com; +4969 7565 1345; Reuters Messaging peter.dinkloh.reuters.com@reuters.net)) Keywords: DEUTSCHEPOST/

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