Tag: Royal Mail

The landmark opening of the UK’s GBP6.5bn postal services market to full competition on January 1 will take five years to have its full impact, the postal regulator has said. But Nigel Stapleton, chairman of Postcomm, stressed the “pace of change” should be faster than the liberalisation of the UK telecoms and energy markets. In an interview with the Financial Times, Mr Stapleton vowed that Postcomm would use its full range of powers including prosecutions to ensure that liberalisation is not accompanied by a collapse in basic service standards. He cited the deregulation of directory enquiries in 2003, which triggered concerns about new entrants to the market giving out the wrong phone numbers, as a cautionary example of the need to protect market integrity. “As far as we’re concerned, a major issue in how successful competition will be is if we can maintain customer confidence,” Mr Stapleton said.

The postal regulator Postcomm’s decision to open the postal market to full competition from the beginning of next month is today criticised as “untimely” by a committee of MPs. In a report published today on Royal Mail after liberalisation of the market, the trade and industry committee warns that Royal Mail “has been asked to prepare for competition at a time of great commercial uncertainty”. MPs say that at a time when Postcomm is reviewing the price that Royal Mail can charge for its regulated services, the company is facing “huge challenges in addressing its pensions deficit and investment needs”. The committee says opening the market to competition did not pose a threat to Royal Mail’s obligation to deliver across the UK for the same price. But it warns that “the regulator must remain vigilant to ensure that competition in postal services does not come at the cost of universal service”. Any universal service which allowed exemptions such as rural areas was “not worthy of the name”.