Rivals admit Royal Mail will be dominant postal player

by Noelle McElhatton, Marketing Direct 22-Dec-05

Competitors to Royal Mail have said that the postal giant is set to be the dominant player in UK postal services for years to come.

The admission came at a debate featuring the chief executives of
Business Post Group, TNT Mail UK and DHL Global Mail at last month's UK
Mail Show Conference, and just under two months ahead of full

deregulation of the UK postal services market.

Sarah Chambers, chairman of postal regulator Postcomm, said that despite
limited deregulation so far, Royal Mail still retained 97.2 per cent of
the market. TNT Mail UK chief executive Nick Wells said he thought Royal
Mail would be "the dominant player and that's a good thing. But if we
can take a 10-15 per cent share, we'd be happy with that."

However, Adam Crozier, chief executive of Royal Mail, said that Royal
Mail is faced with falling mail volumes. Though it has managed a 20.5
per cent increase in operating profit to £159m in the six months
to the end of September, profits in its letters business have
declined.

The regulator also fended off criticism for the lack of progress on
deregulation and its setting of the wholesale access price of 13p.
Chambers said that Postcomm was "trying our damndest to get effective
competition", while "ensuring that Royal Mail continue its universal
service".