In This Bulletin

NEWS

Explore Brand Republic

Postcomm says bulk mail services could be deregulated

by Daniel Farey-Jones, Brand Republic 24-Aug-07, 15:05

LONDON - Postcomm has suggested that Royal Mail's bulk mail services could be removed from its universal service obligations in a two-stage process.

The suggestion comes in the regulator's strategy review of the postal market beyond 2010, published yesterday. Postcomm is now seeking responses from the postal industry and postal users to its review.

The review document states: "Although we see merit in removing the remaining bulk mail services from the universal service in 2010 to afford Royal Mail fuller flexibility for larger customers, there are risks that need to be considered before this step is taken.

"To overcome these potential risks, a two-stage approach might be appropriate. As a first step, the uniform tariff constraint for bulk mail might be removed, thereby addressing the issue of pricing flexibility...Then consideration could be given to the services being taken out of the universal service at a later date."

The review also contains criticisms of Royal Mail, with which the regulator has had a fractious relationship since its inception, in particular it questions Royal Mail's response to the introduction of competition.

"Royal Mail's commercial strategy has not evolved to the extent necessary to enable it to address, and potentially benefit from, the challenges and opportunities of a changing market.

"There have been few changes in its product portfolio since 2003...Many of the other large international operators have been far more proactive in addressing the threats and opportunities, especially in the growing fulfilment and unaddressed markets."