Moya Greene, Royal Mail Group’s Chief Executive Officer, said: "I am pleased that Postcomm clearly understands the need to continue to invest in Royal Mail’s future and to protect the Universal Service. The current regulatory framework is just not right and what is now proposed goes someway in the right direction.
"With mail volumes falling rapidly and set to decline further as competition from electronic communications and rival postal operators intensifies, it’s essential the current regulatory constraints on Royal Mail are eased to allow it to compete fairly in the bulk business mail, and packet and parcel markets, where competition is extremely robust and growing.
"We fully support fair competition but even if all the changes proposed today by Postcomm were implemented, Royal Mail, unlike all other participants in the market, would still face regulatory controls on packets and parcels and on bulk mail. The key to a flourishing postal market going forward is a stable Universal Service," said Ms Greene.
• Rivals now handle 60% of the bulk mail market.
• More than half of heavier packets and parcels in the 500-750g sector are handled by rivals.
• "Access" mail - collected by rivals but delivered by Royal Mail - accounts for more than one in three of all items of mail and more than half of all business mail - and this share is continually rising.
• On current trends, more than half of all addressed mail will be handled by rivals by the end of the current financial year.
• Royal Mail loses on average 2.5p on each item of access mail under the current regulatory rules and we have long pressed to receive a fair price for the mail we deliver on behalf of rivals.
• The combination of market decline and increased postal competition means that by 2015, Royal Mail’s end-to-end delivery volumes are expected to have shrunk by 75% in just over a decade.
• The UK has some of the lowest postage prices in Europe for mail weighing up to 20g and the lowest prices at 100g weight.
Ms Greene said she was confident Royal Mail was modernising faster and reducing its operating costs more than any postal company around the world had achieved in recent years. This was recognised just over a week ago when three of Royal Mail’s mail centres were bronze award winners in the World Class Manufacturing Awards.
"We are making good progress transforming our operations and I pay tribute to postmen and women for the scale of the changes they are undertaking. But it’s vital we step up the pace of modernisation and invest substantially more in the business - and the ability to set fair prices will boost Royal Mail’s modernisation drive," said Ms Greene.
