Britain's Royal Mail seeks review of postal market regulation

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Decreasing mail volumes and growing competition are placing "massive pressures" on the British postal service's ability to continue delivering a one-price-goes-anywhere service for every customer.

That was the Royal Mail's response to Postcomm's strategy review on the future of the British postal industry. The postal service has urged the postal regulator to let Royal Mail compete "freely and fairly" while ensuring everyone can continue to mail to Britain's 27 million addresses at uniform, affordable prices.

"The regulatory framework is no longer fit for today's environment where Royal Mail is competing against a growing number of rivals on a wide variety of mail services," Royal Mail chief executive Adam Crozier said in a statement yesterday.

"The best solution to the massive pressures building up against Royal Mail is for Postcomm to focus the Universal Service on stamped mail to ensure its future for everyone while lifting regulatory constraints on Royal Mail to allow it to compete fairly for business mail," he said.

Thanks to the new emphasis on business-mail competition, Royal Mail's competitors now handle 2.5 billion business letters a year, or about one letter in eight mailed in Britain. This also means that rivals now handle about 25 percent of bulk business mail in that country, Royal Mail said.

Increasing competition will make it harder for Royal Mail to continue delivering the Universal Service unless there are changes to the regulatory regime, the postal service said.

"The problem is compounded by the fact that Royal Mail is now losing money on the access price of 13 pence (25 cents) it receives for delivering mail collected and transported by rival companies," Royal Mail said in the statement.

Read more on this issue in deputy editor Melissa Campanelli's article in the March 5 issue of DM News' print edition.

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