Tag: Royal Mail

Rivals gear up to take small firms' business off UK Royal Mail

Posted by | Jan 2, 2006 | |

Companies posting as little as 100 letters at a time could help to lead an exodus of trade from Royal Mail, after full competition opens up from today.
Postwatch, the consumer group, predicted that rivals to Royal Mail will begin targeting small businesses after the initial push for big customers such as banks, utilities and government departments recedes. A spokesman for Postwatch said: “Already UK Mail offers a service for people posting 250 items in one go. We think that will fall to around 100 by the end of the year. We are encouraging small firms to go on to the website of the regulator Postcomm, check who the rival operators are and contact them.” From today Royal Mail’s rivals will be able to offer small businesses and domestic customers a service alongside the larger business market in which they already compete. A large segment of the business postal market has been open to competition for nearly two years and Royal Mail has lost only 3 per cent of its revenue.

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Royal Mail's letters market monopoly comes to an end

Posted by | Jan 1, 2006 | |

The Royal Mail’s 350-year monopoly of the UK letters market comes to an end today. New rules now allow rival companies to compete for a share of the multi-million pound market. Postcomm, the postal services regulator, has so far granted long-term licences to 13 operators, who will compete with the Government-owned Royal Mail. Businesses may now abandon the Royal Mail for a cheaper or more flexible service, Postcomm said. The change will also improve the overall standard of service for individual customers – and could lead to the appearance of non-Royal Mail post boxes within a few years, Postcomm said.
The market has been in partial competition since 2003, when Postcomm allowed rival companies to offer mailing services to customers sending 4,000 items or more per mailing. Despite this, the Government-owned Royal Mail still has 97% of the overall postal market, Postcomm said. The changes, which come into force today, will give operators the chance to offer rival services regardless of how many items the user sends.

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UK MPs set to block mail equity handout

Posted by | Jan 1, 2006 | |

The number of MPs to have signed an Early Day Motion opposing Royal Mail’s plan to hand a fifth of its equity to employees has reached 208. Allan Leighton, Royal Mail’s chairman, believes the scheme is a vital incentive to motivate employees and steel the company for full liberalisation of the postal market, which begins today. However, such widespread Parliamentary opposition – made up of nearly all Labour backbenchers entitled to sign, and a third of all MPs – means it will almost certainly be blocked. Any transfer of equity would require primary legislation and 193 Labour MPs have signed the motion, suggesting that a vote would provoke the largest rebellion since Tony Blair came to power. No Conservative MPs have signed the motion, but the party came out against the proposals in November, before David Cameron became leader, and a spokesman said that policy remains in place.

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Rivals seek to block UK Royal Mail's pounds 2bn handout

Posted by | Jan 1, 2006 | |

TNT, a competitor to Royal Mail in the UK, is warning that it will complain to Brussels if the government agrees to put public money into the state-owned postal operator to fund investment. With all restrictions on competition lifted today, Royal Mail chairman Allan Leighton believes the group needs pounds 2 billion investment if it is to compete with major international operators such as TNT and DHL Global, part of Deutsche Post. The government is considering a loan or an equity investment styled on a rights issue. However, TNT believes any such move could be anti-competitive and break the rules on state aid. Nick Wells, chief executive of TNT Mail, said: ‘If it is unfair and anti-competitive, we are not going to sit there and watch it happen.’ TNT’s legal adviser, Angus Russell, said there were problems with both arrangements. With a rights issue, the government as the shareholder would subscribe to all shares offered – unlike in the City, where investors can refuse if they think it offers bad value.

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Barriers to competition in the German and UK postal market

Posted by | Dec 30, 2005 | |

Report for Ministry of Economic Affairs, the Netherlands.
Table of contents
1 Introduction 9
1.1 Purpose and background of the study 9
1.2 Entry barriers in postal markets 9
1.3 Postal products and market segmentation 11
1.4 Activities undertaken and structure of the report 12
2 Barriers to competition: does de jure liberalisation lead to de facto
liberalisation? 13
2.1 Introduction 13
2.2 Assessment of potential barriers to competition 13
2.2.1 Time path for liberalisation 13
2.2.2 Licence requirements 14
2.2.3 Downstream access 15
2.2.4 Strategic behaviour of incumbents and position of postal regulator 17
2.2.5 VAT exemptions 18
3 Conclusion 25
3.1 Summary of main observations 25
3.2 Recommended course of action 26
Annex 1 How does a VAT work? 29
Annex 2 Barriers to competition in the UK postal market 33
1 Barriers to entry caused by the regulatory framework 35
1.1 General 35
1.2 Reserved area 35
1.3 Regulatory uncertainty: access to the final mile delivery network 36
1.4 Licence requirements and entry conditions 36
1.4.1 Operational procedures and traffic interchange 36
1.4.2 Licence applications and annual fees 37
1.4.3 Reserve funds 37
1.5 Tariff regulation 38
1.6 Competing operators 38
1.7 Exclusivity agreements 39
1.8 Access 39
1.9 Returned mail and misrouted mail 42
2 Strategic entry barriers 45
2.1 Cross-subsidies 45
2.2 Predatory pricing 45
2.3 Bundling and tying 46
2.4 Vertical foreclosure 46
2.5 Non-price barriers 46
2.5.1 The AMP investigation 47
3 Level playing field 49
3.1 VAT exemption 49
3.2 Immunity from parking penalties 49
3.3 Change in address notification 49
4 The universal service obligation and uniform pricing 51
5 Conclusions 53
5.1 Barriers to entry caused by the regulatory framework 53
5.2 Does Royal Mail have rights/facilities that are not strictly necessary for
servicing the USO, and do these rights/facilities lead to unequal
competition? 53
5.3 What are the practical barriers to entry or operation that might constitute an
unlevel playing field? 53
Annex 2A List of interview partners 55
Annex 3 Barriers to competition in the German postal market 57
1 Barriers to entry caused by the regulatory framework 59
1.1 General 59
1.2 Reserved area 59
1.3 Regulatory uncertainty: unconditional liberalisation 59
1.4 Licence requirements and entry conditions 60
1.5 Tariff regulation 60
1.6 Competing operators 60
1.7 Access 61
1.9 Returned mail and misrouted mail 62
2 Strategic entry barriers 63
2.1 Cross subsidisation and predatory pricing 63
2.2 Bundling and tying 63
2.3 Vertical foreclosure 63
2.4 Non price barriers 64
2.5 Mandate of the regulator 64
3 Level playing field 65
3.1 VAT exemption 65
3.2 Consolidation 65
3.3 Other issues 65
3.5 Change in address notifications 66
3.6 The universal service obligation and uniform pricing 66
4 Conclusion 67
4.1 Barriers to entry caused by the regulatory framework 67
Annex 3A List of interview partners 69
Annex 4 Barriers to competition in the Dutch postal market 71
1 Barriers to entry caused by the regulatory framework 73
1.1 General 73
1.2 Reserved area 73
1.3 Regulatory uncertainty: conditional liberalisation 74
1.4 Licence requirements and entry conditions 74
1.5 Tariff regulation 74
1.6 Competing operators 74
1.7 Access 75
1.9 Returned mail and misrouted mail 76
2 Strategic entry barriers 79
2.1 Cross-subsidies 79
2.2 Predatory pricing 79
2.3 Bundling and tying 79
2.4 Vertical foreclosure 79
2.5 Non-price barriers 80
2.6 Mandate of the regulator 80
3 Level playing field 83
3.1 VAT exemption 83
3.2 Release for driving through shopping areas 83
4 Conclusion 85
Annex 4B List of interview partners 87
Annex 5 List of participants of the workshop 89

P:LibraryPostalEcorys Barriers to competition in Germany & UK.pdf

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