Royal Mail warns of competition mayhem

Royal Mail is warning customers to expect steep price rises for direct mail
delivery if regulator Postcomm pushes ahead with controversial plans to
abolish the operator’s monopoly on post below UKPd1.

The industry watchdog confirms Royal Mail will lose its monopoly on post
weighing under 350g from March 23, paving the way for rival operators to
bid
to operate postal services.

A summit meeting between Royal Mail chief executive John Roberts and
Postcomm
commissioners will take place in the coming weeks to debate the
implications
of competition.

But Royal Mail is so enraged it is threatening to resist signing new
licences
to operate the Universal Service Provision if a compromise is not reached,
throwing into doubt the future of rural delivery services.

“Marketers could see direct mail prices for rural areas increase four times
higher than those for urban areas simply because competition will end
Royal
Mail’s ability to subsidise services in unprofitable regions of the UK,”
says
Royal Mail liberalisation and monopoly policy manager Ian Ray.

Postcomm rejects Royal Mail’s threats. “The writing is on the wall,” says a
Postcomm spokesman. “Not all rural areas are expensive to serve.”

@RT PM200101080002

ISSN 0955-0836; Page 1

Copyright 2001 Centaur Communications

(c) 2001 Resp. DB Svcs. All rts. reserv.
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PRECISION MARKETING, 08th January 2001