Royal mail response to Postcomm price control proposals

Commenting on Postcomm’s proposals on a review of Royal Mail’s price control, Royal Mail’s Marketing Director, Alex Batchelor, said:

“Royal Mail knows that if we are to succeed in a very tough and open market we urgently need to modernise and become more efficient. Royal Mail is losing business to rivals whose costs and prices are lower than ours because they have the modern technology Royal Mail urgently needs to install. We have already made progress and have shown we can deliver the great quality of service our customers expect. What we must do is to move forward at pace to use the GBP 1.2 billion loan which the shareholder – the Government – has made available to modernise the letters operation with new technology to give it world-class productivity. That’s the focus for Royal Mail.

“Our costs are too high and the simple fact is that our prices are being undercut by rival postal operators and that’s resulting in one letter in every five this current financial year being handled by rivals.

Mr Batchelor added: “We absolutely reject suggestions from Postcomm that we have not capitalised on growth opportunities in the postal market. Despite intense competition, Royal Mail is delivering around 60% of all items bought online and we continue to develop new products and services to support this sector.”

Royal Mail is studying the Postcomm proposals carefully and will respond formally in due course.