The UK postal services watchdog says many customers are now benefiting from lower prices, greaterchoice and better quality following the opening of the market to full competition at the start of
this year.A fifth of businesses surveyed by Postcomm, the independent regulator, say their mail priceshave fallen “significantly”, while almost two in five say the choice of services has improved sincepostal liberalisation began in the country three years ago.
Postcomm’s annual business customer survey, published yesterday, also revealed that 34 firmssurveyed believed that the quality of the nationalised Royal Mail service had improved.
In addition, the regulator found that mail carried through Royal Mail’s “access” agreements –where companies can collect and pre-sort mail from customers and then hand it over to the nationaloperator for delivery – had increased dramatically to 1.2 billion access during 2005-2006, fromjust 87 million in 2004-2005. Access deliveries now amounted to 10.5% of Royal Mail’s total volume.
“Although Royal Mail remains by far the largest operator in the market, competition hasencouraged it to raise its game, especially on quality of service,” said Postcomm chief executiveSarah Chambers. “There have been major changes in the business mail market, particularly the rapidgrowth of ‘access’.”
The UK postal services market was opened to full competition on 1 January this year, althoughcompetition has been allowed in the bulk mail market since 2003.
But although competition had begun to benefit business customers, there was “still muchprogress to be made” for the potential to be fully realised, Postcomm warned.
“End-to-end competition has so far been slow to develop, due mainly to the difficulty ofcompeting with Royal Mail’s economies of scale and their VAT (Value-Added Tax) advantage,” Chamberspointed out.
“We hope that growing competition in downstream access will encourage operators to build upsufficient mail volumes through access traffic to allow them eventually to develop their ownend-to-end networks and new ranges of innovative services for customers.”
