UK Royal Mail ‘will still dominate market in 2010’

Postcomm has admitted there are still huge barriers to competition in the postal market – including poor consumer awareness, the risk of anti- competitive behaviour, and Royal Mail’s VAT exemptions – claiming it will be years before Royal Mail’s dominance is threatened.

Speaking at London’s UK Mail Show this week, Postcomm chairman Nigel Stapleton said: “The development of a fully competitive market is at a very early stage – Royal Mail will still have nearly 90 per cent of the market in 2010.”

His comments were reinforced by Postcomm’s recently published annual Competitive Market Review, which shows Royal Mail still holds 97.2 per cent of the letters market, some 30 months after the market was first opened up.

Private operators have only taken a 1.6 per cent share – of which 0.5 per cent operate an end-to-end service – while direct customer access is shaving off 1.2 per cent.

Royal Mail’s volume of final mile deliveries has risen from under 10 million last year to an estimated 90 million items per month in 2005.

Stapleton added: “Customers tell us that this is already encouraging Royal Mail to be more responsive to their needs and offer more choice and innovation in postal services.”

The market opens for full competition in January.