New research: Royal Mail modernisation and competition key to future of universal postal service

Sept. 28, 2011 - PRLog -- London, September 28 2011: With postal industry regulation passing to Ofcom from Postcomm on 1 October 2011, new research has found that competition within the postal sector improves the ability of a national postal service provider to meets its Universal Service Obligation (USO).  

Findings from a survey carried out by the respected postal consultancy, WIK-Consult, on the European countries that have already seen much higher levels of postal delivery competition than in the UK, demonstrate that there has been a positive impact on the incumbent postal service provider’s ability to deliver to every household within its territory over the past ten years.

In addition, the research found that competition has been a catalyst for modernisation of the postal service, to meet the changing needs of the consumer and the challenges faced from electronic substitution.

Head of WIK-Consult’s postal unit, Alex Dieke, concluded that: “In the four countries studied in our report, we believe end-to-end competition has helped to achieve a sustainable universal service and, indeed, improve universal service quality, by putting pressure on incumbent operators to modernise”.

TNT Post UK, the largest private sector postal operator in the UK, which has long held ambitions to launch a competing end-to-end service to Royal Mail, calls upon Ofcom to set a regulatory regime which protects fair competition from both access and end-to-end services and to back its campaign for a level competitive landscape in the UK.  

Currently, Royal Mail is exempt from charging VAT on its business mail services.  This makes it uncompetitive for companies like TNT Post UK to compete fully as the financial and charity sectors which account for half of business mail volumes are unable to recover VAT.

The findings also reinforce TNT Post UK’s position that a strong regulator is essential to ensure that competition thrives and that customers have real choice in the UK.

Nick Wells, CEO TNT Post UK, commented:
“The report findings will help allay fears that competition will have a detrimental impact on the ability of Royal Mail to meet its obligation to deliver to every household in the UK.  In addition, zonal pricing for business mail where we pay more for the company to deliver in more rural areas will ensure the survival of the USO.

“We want a strong Royal Mail but it has to modernise to meet the needs of the market today and in the future and also be open to competitive forces that will ensure its future efficiency and prosperity.

“With Ofcom taking over regulation of the postal industry, we call upon on it to back our fight to get a level competitive playing field in the UK which will enable us to make the business case to invest millions in an end to end service as well as thousands of new jobs.”
-- Ends –

Note to Editors

The survey was prepared by WIK-Consult between June and August 2011 on behalf of TNT Post and analyses experience in those European postal markets which have seen most postal delivery competition in the past ten years: Germany, Netherlands, Spain and Sweden.

About TNT Post
TNT Post is the second largest UK postal company and has the resources to deliver both addressed and unaddressed items.  It currently handles more than 200 million items a month.
Since the liberalisation of the UK postal market on 1st January 2006, TNT Post has continued to impress businesses and public sector organisations in the UK with its innovative, sophisticated mailing services that bring unrivalled value and flexibility to clients.  TNT Post’s high profile wins in the addressed mail market include BT and Centrica.
TNT Post has in a short period of time impressed businesses and public sector organisations with its innovation, high-level service approach and cutting-edge technology investments.  It has achieved some significant wins across sectors such as banking, utilities, leisure and media.  
TNT Post, formerly TNT Mail, was established in early 2003 and signed its downstream access agreement in April 2004 and began operations in late August 2004.  Since its launch, it has developed a number of products for customers including Premier, Premier Sort and PremierSort Flex. For more information on these services please visit www.tntpost.co.uk.

About PostNL
Annually PostNL processes 8.8 billion addressed postal items (including 100 million parcels) and delivers to more than 88 million addresses in the Benelux, Germany, the UK and Italy. PostNL’s main business is mail, parcels and e-commerce. The company also provides services in the area of data and document management, direct marketing and fulfilment. PostNL employs some 77,000 people. In 2010 the company generated a turnover of nearly 4.3 billion euros

For further information, please contact:
TNT Post
Eimear Galvin: 020 7332 2306
Email: tntpost@owlms.com