The £6.5 billion British mail market will be fully de-regulated with effect from January 1,2006. Fourteen firms will take on former monopolist Royal Mail.
A new era will start in the UK postal sector on January 1 with abolition of Royal Mail’s finalmonopoly area – delivery of letters weighing less than 350 grams and costing less than one pound.This segment is about 72 per cent of the total market, according to the British postal regulatorPostcomm.
Postcomm has issued licences to 14 operators to provide delivery of bulk mail and individualletters in competition with Royal Mail. These are AMP, DHL Global Mail, DX Network Services,Intercity Communications, Lynx Mail, Mail Plus, Racer, Royale Research, Securicor, Special MailServices (SMS), Speedmail, Target Express, TNT Mail and UK Mail.
Nearly all the major international and British CEP operators will compete in the UK mail market:Deutsche Post World Net (DHL, Securicor, Speedmail), TNT, UPS (Lynx Mail), GeoPost (Mail Plus),Business Post (UK Mail), Target Express and DX. There are also various specialists such as AMP,Intercity, Racer, Royale and SMS.
The new entrants had combined mail revenues of £31 million and a market share of 0.7 per cent in2004-05. They carried 106 million pieces ‘end-to-end’ in that fiscal year, providing collection,sorting and delivery services. But they also fed a further 381 million items into the Royal Mailnetwork for final delivery under access agreements with the incumbent operator.
Royal Mail, which currently has a letters market share of 97 per cent, is expected to remain thedominant operator for the foreseeable future, however. The state-owned post office, which hassuccessfully returned to profit after a major restructuring and turnaround programme, remainsobliged to provide the UK universal postal service as part of its licence.
About 87 per cent of the 20 billion letters sent in the UK originate from businesses, accordingto Postcomm. About 60 per cent is B2C mail, with B2B mail accounting for a further 27 per cent.Consumers post 13 per cent of UK mail, including 10 per cent to other private persons.
