Deutsche Post close to gaining long-term UK licence

Deutsche Post, the German postal operator, are gaining ground in the UK postal market after Postcomm, the industry regulator, said it was considering giving the company a long-term mail licence.

The news added to the troubles of Royal Mail, which is trying to defend its position as the provider of a universal postal service in the face of increasing competition and industrial unrest.

Postcomm has begun a 30-day consultation on whether to issue Deutsche Post with a seven-year licence to offer various business post services, including bulk mail and document exchange. The company already has a short-term licence to offer these services, which will lapse if the long-term licence is given.

Deutsche Post would become the fifth private company with a long-term UK mail licence, joining Hays, UK Mail, Express Dairies and TPG of the Netherlands. During the first phase of UK postal liberalisation, which lasts until 2007, these companies are limited to offering business mail services. But after that date the whole market will be opened up to competition, including domestic mail and the universal postal service.

Postcomm said the regulator “has done its homework” and expected to grant Deutsche Post a licence, but the final decision would depend on what interested parties such as Royal Mail said during the consultation.

Royal Mail said yesterday that Postcomm’s move was “some of the strongest evidence so far about the competitive pressure (it) will increasingly face”.

Royal Mail also warned that the current threat of industrial action, which would be the first national postal strike for seven years, “puts in jeopardy our ability to compete”.