UK postal war to start in 2005

UK Royal Mail is to face competition on letter deliveries to homes and small businesses far sooner than it currently expects.

Plans being drawn up by regulator Postcomm could see competitors such as Deutsche Post or Dutch TPG setting up rival ‘postie’ operations – including competing post boxes – as early as 2005.

The move would open domestic deliveries to competition two years earlier than planned. Under current Postcomm plans, competition comes in three phases. The first, which begins on 1 January, allows competitors to deliver 4,000 items or more, or to collect together mail from a number of customers, sort it, and hand it over to Royal Mail for delivery. Phase 2 in 2005 was to have merely reduced the lower limit on bulk items.

But Postcomm believes that reducing the bulk threshold alone will not meet its target of opening 60% of the market by 2005. Postcomm head Graham Corbett, said: ‘We hoped to do it by reducing the minimum posting requirement from 4,000 to, say, 500. There are some question marks whether that is going to be enough. We are considering opening an element of the domestic market to competition in 2005.’

Corbett added: ‘That would then mean Deutsche Post could set up a collection service, either through a shop front operation or post boxes.’