Plans for UK mail shake-up may be changed

The postal regulator will consider changes to its plans to open mail services to competition. The move was prompted by claims from Consignia that Postcomm had miscalculated the impact ending its monopoly on bulk business mail would have on the company.

Postcomm’s admission yesterday marks a first victory in Consignia’s battle to have the regulator’s proposals for full postal liberalisation watered down. “Postcomm have misunderstood a fundamental part of the market,” Consignia said. “This is not a small detail. When they make this sort of miscalculation it calls into question the credibility of the work they have done in general.”

In January, the regulator suggested opening 30 per cent of Consignia’s revenue to competition. Based on figures on revenue supplied by Consignia, formerly Royal Mail, it proposed the bulk business mail market – companies mailing 4,000 letters or more – should be opened to competition. However, Consignia claimed yesterday that the bulk mail market made up 50 per cent of its revenue. It said Pounds 2bn of its revenue could be “up for grabs within weeks” if the proposals went ahead.

Postcomm rejected the claim that it had got its sums wrong. It said it could only work on figures supplied by Consignia. Martin Stanley, chief executive of Postcomm, said the regulator “may change the threshold” and increase the size of a bulk business mailing from 4,000 letters. “We went to Consignia to find out what 30 per cent of their revenue would be. Consignia gave us the information suggesting (the bulk mail market of) 4,000 letters was about the right level. It is quite normal for a company to say it has missed something.”

Consignia said Postcomm was “desperately trying to roll back on what it has said. It demonstrates a lack of understanding of the business by Postcomm.” www.ft.com/consignia