Postal Regulator refutes Royal Mail licence claim

The postal regulator has hit back at accusations from Royal Mail that the new terms and conditions for liberalisation, revealed this week, will give foreign competitors an unfair advantage.

Royal Mail criticised the regulator for opening up the market more quickly here than in the rest of the European Union, saying that new applicants TPG and Deutsche Post would use domestic profits to gain an advantage in the UK market.

A Postcomm spokesman says: “Royal Mail is being disingenuous here – it uses its domestic profits to finance a successful operation in Holland. Condition 12 of the standard licence states that we can identify when an operator is cross subsidising UK operations using domestic products. In the year of set-up we would expect this to be the case but after that we would refer such activity to the competition authorities.”

The consultation period for seven-year licences for Hays Commerical Services, TPG Post UK and TNT UK is expected to end in 30 days. Royal Mail is in favour of the “weight step” approach to liberalisation, which, it says, is fairer. But Postcomm counters that this does not allow enough competition, as it leaves 70 per cent of the market in the hands of the old monopoly.