Competition cuts deep into Royal Mail service

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Falling mail volumes and growing competition are putting pressure on Royal Mail’s ability to keep delivering a one-price-goes-anywhere service for every customer, the company has warned.

It has told Postcomm that the one-price-goes-anywhere Universal Service should be re-focused specifically on stamped mail rather than including business products and cross-subsidies should be removed to create transparency for business customers.

Royal Mail wants business mail services should be fully deregulated because competition has now replaced the need for regulatory constraints.

It also wants operational integration of the postal network to continue as separation “would create confusion, introduce complex and costly interfaces, endanger quality of service and jeopardise Royal Mail’s modernisation programme”.

Royal Mail says it is now losing money on the access price of 13 pence it receives for delivering mail collected and transported by rival companies.

Chief executive Adam Crozier said: “We need to be able to compete freely and fairly in the business mail market. The current arrangements do not allow that.”

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