Monitoring developments in the UK postal market

Survey recommends speeding-up postal competition
A survey commissioned by Postcomm into the non-residential postal market and attitudes to the introduction of competition could have important implications for Postcomm’s plans for the next stage of market opening.

The survey found that business customers were generally not well informed about competition and most had not approached or been approached by a potential new operator. But a third of the companies would consider switching some or all of their mail to new entrants. It concludes that Postcomm should consider speeding-up the introduction of full competition.

Postcomm chairman, Nigel Stapleton said:
“It is disappointing – but not perhaps surprising — that almost 18 months into the first stage of a UK competitive mail market, Royal Mail still has more than 99% of the letters business.

“With Royal Mail back in profit and customer service suffering, we see additional reasons for ensuring competition bites. The commission will look very hard at the survey’s recommendations that we speed up the introduction of competition in postal services, before we issue our competitive market review in September.”

Postcomm commissioned the survey, by consultants Roland Berger, as part of its forthcoming competitive market review. The company contacted more than 500 business mailers, some of whom spend more than £500,000 a year on postage.

Among its recommendations the survey says:

Postcomm should consider full market opening earlier than April 2007
If earlier full market opening is not possible, in 2005 Postcomm should open the business-to-business market segment in preference to reducing the volume threshold on bulk mail as planned
Postcomm should work towards uniform conditions for all entrants – including reviewing Royal Mail’s VAT exemption
Access by operators to Royal Mail’s downstream network should be promoted as a reliable alternative to full end-to-end coverage.
Roland Berger interviewed a total sample of 549 customers
P:LibraryPostalPostComm Formal DocumentsRolandBergerCustomerSurvey monitoring developments Apr04.pdf