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Last Updated: Monday, 20 September, 2004, 18:18 GMT 19:18 UK
Post competition to come earlier
Royal Mail offers 99.7% of all UK postal services
UK postal services could be opened to full competition 15 months earlier than previously intended under new plans.

Royal Mail should face competition in the delivery of all post from 1 January 2006, regulator Postcomm has said.

From that date, any licensed operator would be able to deliver mail to business and residential customers.

Royal Mail, which controls 99% of the market, and other postal suppliers welcomed the announcement but unions attacked the move as "vandalism".

Increased choice

Postcomm said it wanted to increase choice for consumers while making it easier for new suppliers to enter the market.

Under proposals which will go out for consultation, Royal Mail would be given greater commercial freedom to compete in a deregulated market including financial rewards for meeting efficiency and delivery targets.

Postcomm said the proposals would safeguard the future of a universal post service.

However, the Communications Workers Union said that postal services would not improve if private firms made huge profits out of postal services.

"We know that these proposals will, in the main, be warmly welcomed by Royal Mail's emerging competitors, and by major postal users," said Postcomm chairman Nigel Stapleton.

Customers deserve real choice not postal chaos
Adam Crozier, chief executive, Royal Mail

"Postcomm remains fully committed to ensuring the continued viability of the universal post service."

Careful licensing

Royal Mail insisted it could succeed in an open market.

"Customers deserve real choice in an open market, not postal chaos," said chief executive Adam Crozier.

"There has to be careful licensing of new entrants to ensure customers interests are protected to avoid a free for all with customers left to find their way among potentially dozens of rivals with varying quality of service."

Competition was introduced in the postal market in 2002, when bulk mail deliveries were opened up to suppliers other than Royal Mail.

However, this has made little impact on Royal Mail's monopoly of the business.

A second stage of competition, which would have seen 30% of the market opened to competition by April 2005, would be scrapped under Postcomm's proposals.

This would give Royal Mail an extra nine months to prepare for liberalisation of the market.

The BBC's Rory Cellan Jones
"The regulator is speeding up plans to bring in competition"

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