Watchdog to consult over Royal Mail's future

16-08-2006

Postal regulator Postcomm has announced that it is to consult on the future of postal services in the UK, including plans to split the Royal Mail in two in order to boost competition across the letters market.

Royal Mail lost its monopoly over the country's postal services market at the beginning of the year and the state-owned operator has faced growing competition from commercial rivals such as TNT, DHL and Business Post.

Postcomm says that it now wants to determine whether more can be done to ensure consumers reap the benefits of increased competition.

Among the issues to be considered by the regulator are whether the Royal Mail's access service - under which other operators pay the company to access its "final mile" delivery network - hinders the development of full collection and delivery services by rivals.

Postcomm will also examine Royal Mail's "one-price-goes-anywhere" universal postal service and how best it can be secured in the future.

The consultation, which will last for three months, will see the regulator consult with both domestic and business customers, the Royal Mail itself and other postal operators.

Feedback on the exercise will be published next year, with the responses set to help Postcomm "frame its regulatory strategy in the lead up to 2010 and beyond".

Announcing the review of UK postal services, Postcomm chairman Nigel Stapleton said: "Now is the time to ask some fundamental questions – such as ensuring we continue to meet people's needs for a quality universal postal service against the background of some significant trends such as the increasing use of emails and on-line shopping.

"We are also asking questions about whether Postcomm, whilst still promoting deregulation, can do more to ensure customers benefit from competition," he added.


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