Royal Mail Plans Price Changes

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Royal Mail's price for a basic First-Class stamp will rise from 54 to 58 cents April 7, the United Kingdom postal service confirmed Dec. 10.

Many business-mail services will experience smaller increases, and in some cases decreases, as Royal Mail moves toward rebalancing its prices to reflect actual costs and prepares for full competition in the market.

Price changes will include:

· First-Class postage for heavier items will rise 5.2 percent to 9.5 percent.

· The basic rate for Second-Class mail will stay at 41 cents for all customers.

· International prices will rise 5 percent to 6.9 percent.

· Special Delivery, Royal Mail's guaranteed, next-day service, will rise from $7.23 to $7.43 for the basic service. Royal Mail's Special Delivery 9 a.m. service will increase from $13.40 to $15.33.

· Parcels sent by Royal Mail will increase by up to 4 percent.

· Prices will fall for some business-mail services, including mail sent through Mailsort (for large volumes of mail that are presorted by customers) and Cleanmail (for large volumes of machine-readable mail, sorted by value and presented to Royal Mail in trays by the customer).

Royal Mail chief executive Adam Crozier said that because the UK mail market may be open to competition by January 2006, it is essential that Royal Mail's postage prices start to reflect the true cost of collecting, sorting and delivering mail. The current system under which some customers cross-subsidize others cannot continue in an open market, he said.

"Stamps will remain a great value, and our prices overall are still falling in real terms," he said. "First-Class postage will still be cheaper than almost anywhere else in the rest of the EU -- where the average price of a First-Class letter is [69 cents]."

The changes are in line with the formula agreed to by UK postal regulator Postcomm, setting a three-year below-inflation control for changes to Royal Mail's prices that is valid until March 31, 2006.

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