Tag: Postwatch

On the 29 March the Royal Mail published its Pricing in Proportion
proposals. Just 7 days later, the Regulator, Postcomm, has published its
‘minded to accept’ consultation document. It is clear that Royal Mail and Postcomm are working closely together to ensure Pricing in Proportion is introduced in April 2006. Peter Carr, Chairman of Postwatch, commenting on the Regulator’s announcement said: ” There can be no doubt that the count down has started. In April next year the price for mailing an item will no longer be
determined by just its weight. The price will be determined by weight, size,
and thickness.”

After consulting customers about a move to Size Based Pricing (SBP) and for
a period Format Pricing during 2003 and 2004, Royal Mail has added further
confusion by now announcing its Pricing in Proportion (PIP) proposals.

Peter Carr, Chairman of Postwatch commenting on the proposals said: “We
understand and support moves by Royal Mail to price products in accordance
with associated costs. It is important that the dominant monopoly service
provider’s products are cost reflective in the UK’s fledgling competitive
market. Otherwise Royal Mail could unfairly subsidise some of its services
to retain market share.

In 2003/04 Royal Mail famously failed every one of its 15 minimum performance targets. These targets were set by Postcomm on advice from Postwatch and included in Royal Mail’s licence. Yet despite this worst ever performance the Regulator has decided after 12 months of deliberation not to fine Royal Mail. Postwatch believes the regulator has rolled over. Customers have suffered; Royal Mail has got off scot-free. The regulator is hiding behind GBP60 million of compensation, which customers were separately entitled to. In May 2004 Postcomm predicted that compensation to bulk mailers alone could reach GBP80 million. In practice, only GBP43 million has been paid due to ‘loopholes’ in the scheme written by Postcomm. Customers have been short changed by more than GBP30 million. Peter Carr, commenting on Postcomm’s announcement of no action said: “This is a bad day for customers and a missed opportunity.”