Regulator says no to full postal competition

The postal regulator says it would be unrealistic and irresponsible to introduce wide-open competition to the country’s postal system, which faces a major shake-up in the first half of 2002.

The comments came after the Postal Services Commission, set up to ensure a universal postal system, released a consultation document on promoting competition in postal services.

It canvassed four options — granting licences covering wide areas to many operators or full competition, altering the weights and prices rules for mail items, issuing licences for mail categories, and access to existing postal infrastructure.

“Whilst it may be possible that somewhere down the line one could get to the point of a totally liberalised market, I certainly don’t see that as a realistic or responsible route in the short term,” Postcomm chairman Graham Corbett told Reuters.

Corbett said Postcomm was also sceptical about altering weight and price thresholds for mail. Under present rules, competition with the government-owned Consignia — the renamed Post Office — is only allowed on items weighing more than 350 grams (12.4 ounces) or costing more than one pound.

“We think the merits and demerits of liberalisation by weight and price is something which needs to be looked at quite sceptically,” Corbett said.

Replies to the document are expected by September and Postcomm will produce its reform blueprint before the end of the year. “If things go well, we could have real live licences granted in the first half of next year,” Corbett said.

Publication of the document on postal reform comes two days after Consignia reported its year results, which failed to meet the central government’s profit targets.

Blaming the shortfall on strikes, disruption of the rail network, and increased competition from the Internet and mobile phones, Consignia posted profits of 66 million pounds for the year ended March 25, 2001.

It missed its agreed target by 88 million pounds.

The Postcomm document said Consignia, which has argued that competition could undermine its universal service, should not expect to lose significant business under any reforms.

“Postcomm notes that international experience indicates that competition, even full liberalisation, has not taken away significant business from incumbent postal operators, who have responded successfully to competition and continued to maintain a universal service often at a uniform tariff,” it said.

Reuters