UK watchdog in pledge over postal services

The landmark opening of the UK’s GBP6.5bn ($11.2bn) postal services market to full competition on January 1 will take five years to have its full impact, the postal regulator has said.

But Nigel Stapleton, chairman of Postcomm, stressed the “pace of change” should be faster than the liberalisation of the UK telecoms and energy markets.

In an interview with the Financial Times, Mr Stapleton vowed that Postcomm would use its full range of powers including prosecutions to ensure that liberalisation is not accompanied by a collapse in basic service standards.

He cited the deregulation of directory enquiries in 2003, which triggered concerns about new entrants to the market giving out the wrong phone numbers, as a cautionary example of the need to protect market integrity.

“As far as we’re concerned, a major issue in how successful competition will be is if we can maintain customer confidence,” Mr Stapleton said.

“We’re very clear that if there are issues with mail dumping with alternative operators or issues where unaddressed or badly addressed mail does not get dealt with, we will take action, whatever the new competitors are doing with innovation or competitive pricing.”

Royal Mail, the 350-year-old state-owned postal operator, already faces competition from several rivals, including subsidiaries of the German and Dutch postal companies, for the lucrative UK bulk mailing sector. It lost its monopoly on mailings of 4,000 and more items in April 2003.

Mr Stapleton said this element of competition was going to be of “greater significance for the next 12 months” than the decision to open up the rest of the market, including lower volumes of mail sent by small businesses, on January 1.

Most of the competition to date has been invisible to personal users of post. Royal Mail’s rivals have competed principally by offering an “access” service, collecting and sorting post for high volume mailers, such as banks and supermarkets, but paying Royal Mail a fixed fee to use its army of postmen and women to deliver to the doorstep.

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