The Swiss cabinet has decided to partially liberalise the country's letter delivery service from April 2006.
It is the latest step towards privatising the state–owned company and opening the postal market to other licensed competitors.
Swiss Post, which currently holds a monopoly on all letters delivered in the country, will face competition for the delivery of letters over 100 grams from April next year.
Companies wishing to offer a delivery service need a licence from the authorities.
The communications ministry said the government's decision was based on a report by consultants. In their report, published last month, experts said a partial liberalisation of letter delivery services would not threaten the country's mail service.
The study estimates that competitors would only capture a small part of the letter market and that the measures would apply to one in every ten letters, or 17 per cent of Swiss Post's revenue from mail deliveries.
Calls, notably by the business community, to set the limit at 50 grams or grant unlimited access, were rejected, the statement said.
In 2002 parliament came out in favour of a gradual liberalisation of the delivery of letters.
The cabinet has asked the communications ministry to present a report early next year on ways to further liberalise the letter delivery service.
Trade unions have warned that any further opening of the market should not go beyond what was approved by parliament three years ago.
Swiss Post said the cabinet decision was reasonable. It added that it was examining whether prices will have to be adapted because the liberalised delivery services will be subject to value added tax.
Restrictions for package deliveries were completely lifted in 2004, and letters headed for abroad or express mail can also be sent by other companies since 1998.
The state-owned Post Office, with a 52,000 workforce, became autonomous in the same year.
swissinfo with agencies
The monopoly on letter deliveries will be partially lifted from next April. The measures applies to letter over 100 grams.
A report, published in August, said that an opening up of the market would promote competition, benefiting customers and creating new jobs.
Trade unions are concerned that a complete liberalisation will result in cuts to the public service.