The government is considering retaining equity stakes in postal services even after they are privatized, government sources said Tuesday.

The plan is meant to ensure that postal services remain in line with the Universal Postal Convention, of which Japan is a member, the sources said.

Article 1 of the convention says postal services should be provided permanently and at reasonable costs in any territory the convention covers.

In addition, Japan Post is legally required to provide universal service, which includes having post offices in all municipalities and charging uniform fees across the country.

But many post offices are located in underpopulated areas, making Japan’s postal business unprofitable for many years.

Japan Post was created in April 2003 to take over mail delivery, postal savings and life insurance from the government’s Postal Services Agency. Prime Minister Junichiro Koizumi’s Council on Economic and Fiscal Policy has called for the entity to be privatized in five to 10 years after 2007. If Japan Post is placed under completely private management, it will probably withdraw from unprofitable areas, compromising the principle of universal service, the sources said.

The Finance Ministry is expected to oppose any move to use public funds to ensure universal service for the postal sector, given the debt-ridden government coffers. As of the end of March 2003, the national debt reached 670 trillion yen.

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