Tag: Royal Mail

Proposals for tackling barriers to entry in postal services
Contents: Summary i 1. Introduction 1 1.1 Postcomm’s statutory duties 1 1.2 Postcomm’s vision and regulatory strategy 2 1.3 Purpose and structure of this document 2 1.4 Process so far 3 1.5 How to respond 4 1.6 Confidentiality of responses 5 2. General overview of the UK postal market 6 2.1 Introduction 6 2.2 Overview of the UK postal sector 6 2.3 The size of the UK letter market 7 2.4 Characteristics of mail 8 3. Development of competition in the UK letter market 11 3.2 Market entry to date 12 3.3 Market volumes 2004/05 16 3.4 Market revenues 2004/05 17 3.5 Latest developments 17 3.6 Prospects for entry 20 3.7 International experience 21 3.8 Summary 22 4. Royal Mail’s performance 23 4.1 Introduction 23 4.2 Universal Service 23 4.3 Financial performance 24 4.4 Quality of Service performance 31 4.5 Summary 37 5: Customer awareness and behaviour 38 5.1 2005 business customer survey 38 5.2 Key results of the 2005 survey 39 5.3 Postcomm’s response 44 6. Stakeholder Views 46 6.1 Introduction 46
6.2 Summary 47 7. Barriers to the development of effective competition 48 7.1 Introduction 48 7.2 Barriers to the development of effective competition 48 7.3 Other Key Concerns 64 7.4 Summary 70 Annex 1: Stakeholder views 71 Annex 2: Postcomm’s review of the exclusive relationship between Royal Mail and Post Office Limited 92 Annex 3: Postcomm’s process for complaints of anti-competitive behaviour under Part 4 of Royal Mail’s licence 96 Annex 4: Access determination process 99 Annex 5. Prospects for entry 101
P:LibraryPostalPostComm Formal DocumentsCompetitive_Market_Review_Nov_2005.pdf

Postcomm today published its Competitive Market Review: 2005, which includes the results of a survey of 1,200 postal users. Speaking at the Mail Show in London today, Postcomm chairman Nigel Stapleton said that, since the market was first opened to limited competition nearly 30 months ago, Royal Mail’s rivals had won just over 1.5% of the letters market. “Customers tell us that this is already encouraging Royal Mail to be more responsive to their needs and offer more choice and innovation in postal services,” said Mr Stapleton. “But the development of a fully competitive market is still at a very early stage. By its own calculations, Royal Mail will still have nearly 90% of the market in 2010,” he added.

Stamp prices will be linked in future to the size of the Royal Mail pension deficit under plans being drawn up by the postal regulator, PostComm. The scheme, which forms part of PostComm’s current review of the prices Royal Mail is allowed to charge, is intended to combat unpredictable fluctuations in the deficit caused by factors such as increases in life expectancy and stock market performance. The deficit has shot up from pounds 2.5 billion to pounds 4.5bn this year thanks to accountancy changes, which have stretched Royal Mail’s finances, making it ‘technically insolvent’, according to its chairman Allan Leighton. Sarah Chambers, the chief executive of PostComm, said: ‘We are considering a mechanism that would allow large fluctuations in the pension fund deficit to be reflected in postage prices. If the deficit were to rise substantially, for example as a result of equity markets falling, then this would feed through to higher stamp prices and vice versa.’