Royal Mail could face full competition from 1 January 2006 under new proposals from the industry regulator Postcomm.
From that date, any licensed operator would be able to deliver mail to business and residential customers.
In return, Royal Mail would be given greater commercial freedom to compete in a deregulated market including financial rewards for meeting efficiency and delivery targets
Royal Mail has said it could succeed in an open market but unions have attacked the move as "vandalism".
Will Postcomm's proposals improve or worsen the current postal service?
This debate is now closed. Read a selection of your comments below.
The following comments reflect the balance of opinion we have received so far:
No. We should be careful not to drive Royal Mail away completely. Increased competition will force Royal Mail to cut back even more. If the private postal market was opened up - do you honestly think that a private company would be interested in delivering a letter for 21p? Don't forget, when the train network was opened up for competition - the rural non-profit making lines were closed.
Dave Pooley , Berkshire, UK
Royal Mail is part of British heritage and stands for more than just delivery of mail. It is a nationalised institution that ensures a fair-go for all its consumers, no matter where they reside. Do we really want to see market forces that will inevitably increase the cost of postage to rural communities, and risk further isolation of vulnerable citizens who may not be able to afford any new charges that would surely follow?
Martin R, NSW, Australia
The first serious competition to the Royal Mail will bring a welcome end to this sorry, backward dinosaur of an organisation. The Royal Mail owes its existence only to the protection of the state from free market forces which would have otherwise wiped out this epitome of inefficiency and lethargy.
Richard, Reading, UK
I understand from friends working for RM that those competitors actually use the Royal Mail sorting office. They drop off the post and leave the RM to sort it and then deliver it. Is this competition? What is needed is the control of the unions and to stop strike action against every attempt to change the outdated inefficient ways in which staff operate.
Pete, Bristol, UK
What will happen is what happened with digital TV. Competition will replace regulation then only one service provider will come forward in my area who will have a monopoly as far as my business is concerned; then there will be neither competition nor regulation.
Martin Bucknall, Glasgow, Scotland
It's bad enough with post constantly going astray when we have only 1 postal service running. What happens when it's split? Will post for one area not get delivered because the wrong company was given the wrong mail sack? And we'll no doubt be charged more for the 'privilege'. Instead of sharing it out, maybe they should just fix the holes in the service we've got.
Increased competition will be fine if you live/work in a city. You may even save a couple of pence a letter. But if you want to rent a holiday cottage in a rural area, don't bank on there being a postal service at any price.
David Anderson, Wakefield, West Yorkshire
It could well be worth seeing if someone else can have a go and actually deliver mail, rather than throwing it away. Also, delivering mail before I leave for work in the morning would be nice. Or even opening their collection depots at normal hours so that I can collect the stuff that arrives "after" I've left for work, would be a great help. Royal Mail is an absolute disgrace.
Gareth Rippingale, UK
Absolutely not! The price of sending a letter from one side of London to the other may come down a couple of pence but it would be a disaster for those of us who live in remote areas. Already many private companies refuse to deliver as far north as here and the problem would only escalate if the industry were deregulated. I used to be in favour of privatisation but the more I look at industries that have been privatised the more I'm convinced that they should return to complete government control.
Murray, Sutherland, Scotland
Competition may help Royal Mail focus more on being cost effective but if Postcomm does not do this carefully then the infrastructure of the mail system may be adversely affected and seeing as most of the competitors will be using Royal Mail at some point in their own processing then we are very likely to see similar results as we have with the railways and the issues around the core business regarding track maintenance. Postcomm please be careful with our precious Royal Mail, they are improving greatly so please nurture that growth for the good of everyone, even the competition!
Tony, Newquay, England
This is a public service. Although efficiency should be mandated in the organisation, should we really be expecting the Royal Mail to be making a profit?
Matt, Amsterdam, Netherlands (ex-UK)
I don't mind as long as my letters and parcels arrive, on time and undamaged. If it makes the service worse then it shouldn't happen. Look at what happened with 192 and 118 xxx!
Well they tried fattening up the Royal Mail for full privatisation and that didn't work very well, so I guess this is the only way they can make any money; the private companies and the fat cats, not the Royal Mail. No doubt the Royal Mail will be tightly regulated to prevent it using its infrastructure to an advantage.
David R, Plymouth, UK
I can only agree with a number of others - what benefits does this bring and at what cost? I can't wait to see the plethora of mail boxes and the subsequent advertising. In all my dealings with the Royal Mail, I can honestly say that no post of mine, to my knowledge, has ever been late, mis-directed or lost. I'm sure that things do go wrong but make sure that you post things in plenty of time and that they are properly addressed so as to reduce the risk of a problem. Let's concentrate on getting our existing service right by helping where we can.
Mark, Worcester, UK
I live in rural Lancashire. I know when my post lady will deliver mail. With competition, I'll have no idea when to expect any mail nor whom it's being delivered by! Leave them alone.
Brian, Lancashire, UK
We get home deliveries from many companies. It is noticeable that over the last few years nearly all deliveries have moved to independent couriers due to the unreliability of the GPO. It's time they were exposed to real competition as no other pressure will get them up to scratch as a modern postal service.
John R Smith, UK
Privatisation means shareholders. Shareholders mean dividends. Private dividends mean public losses. Governments who want privatisation to work means subsidies. Subsidies mean public theft for private profit (see Railtrack). Improving the mail is in all our interests, and privatisation isn't. Any subsidies and investment should be put into the existing service.
David, Herts, England
Why is it that in the UK the powers that be seem so obsessed with breaking great industries. First the railways now costing far more than they ever did under BR management, the electricity boards, now virtually foreign owned, BT - once the largest telecoms provider in Europe, now a shadow of its former self. Now the Post Office. Which does have its problems but compared to most countries offers a brilliant service. What next - I suspect it will be the BBC! Then we will have nothing to be proud of in the UK.
Would this be like bus deregulation, where a state monopoly was broken up, and thousands of small bus companies started up, the vast majority being taken over by huge conglomerates creating a private virtual monopoly? Who is supposed to benefit from privatisation of any utility or service - it certainly doesn't benefit the public, who see unchanged or worsening services.
John B, Gloucester, UK
Absolutely not! Have we all to soon forgotten the debacle of 192!
Darryl, Brecon, Wales
The Royal Mail service is so poor that competition must be introduced. Its time to put the Royal Mail out of its misery
It shouldn't have competition it should be nationalised as mail is an important factor for business and people on the whole and shouldn't be subjected to companies cost cutting in order to make a profit from the post.
Jon, Melksham UK
Will the corporate companies collect mail on a daily basis from a remote village, and deliver it across the country for 21p? I think not.... Competition is not the answer.
Rob Watson, Winchester, Hampshire
Royal Mail is having difficulty maintaining profits as it is. Why make their lives even harder by introducing competition? Why is this government so insistent on public service companies on making profits? Look at the railways - they are in a shocking state. Look at other public transport - they are in a mess. Leave the Royal Mail alone - the more they are left alone, the easier it is for them to make public service (the main factor) a number one priority.
Chris H, Canterbury, UK
Overall Royal Mail is good, however if the competition are allowed to select which areas they will compete in then Royal Mail will be left with the loss making deliveries. As an aside will the competition be allowed to charge more than Royal Mail?
The sooner the better. There are still too many of the old GPO employees in the business and if they have to work in such a manner to compete with the private sector they will soon be 'washed out' of the system to the benefit of everyone.
Jonathan Bennett, Chipstead, England
Of course they should. After all opening up the railways to a competitive market worked extremely well, oh hold on a minute.....
No, the Royal Mail should not face more competition. The Royal Mail will lose profitable areas of their business and the general public would all end up paying far more than now. Postcomm has in my view deliberately harmed the efforts of the Post Office to improve services by preventing the Post Office from increasing charges by the required amount. Our postal charges are the cheapest in Europe and a small increase, which would enable the Royal Mail to improve services and become profitable, has been vetoed by Postcomm. The Post Office has had to cut costs and reduce services. In my view, Postcomm has conspired to increase dissatisfaction with the Post Office and has so paved the way for opening up the market to competition..
John Bridgman, London
All you have to do is look at the mess of Directory Enquiries, the Railways, to see that it's all very well sitting in an office coming up with these crazy ideas, they may look good on paper but to actually carry out these ideas is not always the best way forward.
E Sloan, England
The sooner there is full competition, the better. The Royal Mail is notoriously unreliable to the extent that one has to send anything of any importance by other means. And I have absolutely no confidence that the incompetent management, stroppy unions and third rate employees will ever manage to get their act together...
Kevin T, Alton, UK
I see nothing wrong with a competitor to the Royal Mail provided they have to operate under the same restrictions, particularly of delivering mail to anywhere in the country for a fixed rate. If newcomers are allowed to cherry-pick the easy services and ignore the rural customer then this can only lead to a poorer overall service. Van based deliveries by the post office to rural addresses have always been subsidised by the more profitable urban areas. If some of this profitable business is hived off to a competitor without them having to also cover the high cost deliveries then it could well mean then end of rural services
Chris Lowe, Cambridge
The Railways where split up into different operating companies and look what happened there. If you split up the Royal Mail the same will happen.
Ron Milligan, Gosport, England
I would like to ask what consumer choice we are actually going to be given. If I send a letter will I choose who delivers it? If I receive a letter will I get to choose who gives it to me? Will we be given the same amount of consumer choice as when the rail network was privatised? What this really comes down to is jobs for the boys and few benefits for the public.
I live in a small village only a few miles from major towns. We don't have mains gas - the alternatives cost more. If the mail is opened to competition who will serve rural areas - and how much more will we have to pay? Yet another Townies solution that only Townies benefit from.
Mike Kelland, Swindon, Wilts
Who would decide which of the operators deliver your mail? Is it going to be by region, by class or what? No doubt there will be crossover areas where the different companies will have to work together, - now that's "really" going to work isn't it. Yep, Royal Mail is getting worse but I think that a plethora of companies all doing 'bits' will cause confusion and more trouble that we currently have at present. Yet another decision from a regulatory body that has been "not thought through". Just sort (pardon the pun!) the Royal Mail out properly....please ?
If the same thing happens to the mail delivery service as has happened to the Directory Enquiries service, it'll be then that we realise how much of a good job Royal Mail was actually doing after all! Besides, I'm not all that fussed about the Royal Mail, it's the BBC I'd like to see having to compete, instead of raking it in with licence fees!
Yes they should face competition, I work for Scottish Gas and the energy market was deregulated, so why should Royal Mail get Monopoly on a public service, maybe it would waken them up, because I would be using other providers to see how they work, and I would hope that people sending letters to me tried these other companies.
Paul, Inverkeithing, UK
I see no sense whatsoever in this initiative. What are we likely to see? Footpaths blocked with variously coloured letter collection boxes? A daft proposal altogether! This is a very rare occasion when I support a Trades Union view!
Chris Green, Hagley, Worcs England
Of course. Why should I keep paying for a failing service when someone else could do it better and cheaper?
Digby Knight, Henley, UK
If deregulation will bring proven techniques now widely in use by global "players" in world's postal services to the UK, which will result in widespread increases in performance and efficiency, this "wake up call" would be no bad thing. But breaking Royal Mails lethargic strangle hold on the country's postal industry at the expense of the continued reliable postal services to remote areas of the UK, is in no one's best interests. (Even though a first class letter to southern England from here can take 4 days and still not arrive!)
TD, West Highlands of Scotland
I can't quite get my head around this idea. How is this supposed to benefit the consumer? How on earth will it work? How can you regulate the post like this? Surely putting more pressure on an already failing company will have an adverse effect!
Caroline, Durham, England
The trouble with competition is it doesn't guarantee quality - ask anyone who watches TV. There is a danger that we'll end up with a useless public "safety net" service for most areas, with the private sector creaming off the lucrative city-to-city services.
Tim Watkins, Cardiff