New Zealand Post says its mail volumes are falling faster than it had forecast.
Volumes are now dropping at a rate of about 80 million items a year, which the organisation says is resulting in substanial loss of value to the core part of the business.
Earlier this year the New Zealand Post Group submitted a proposal to the Government to change its Deed of Understanding, which has been in place in its current form since 1998.
The state-owned enterprise wants to cut the number of days it is required to deliver mail to most addresses from six to three days a week and replace some of its 880 stores with electronic self-service kiosks.
New Zealand Post Group chairman Sir Michael Cullen says the rate of mail decline is faster than the organisation had been planning for, and is running at 7.5% per annum compared to 6% a year ago.
"That may step up again, because we know the banks and many others are looking to proceed further down the track of communication via the internet rather than communication via the letterbox."
Sir Michael says a change to Deed of Understanding is vital for the health of the business.