Mail monopoly to end early after delivery failures

LONDON – Royal Mail could lose its monopoly on the UK market earlier than expected, following its continual failure to meet performance targets.

Nigel Stapleton, Postcomm's chairman, has announced that the £20bn postal market could be opened to full competition in 2006, a year earlier than the original 2007 deadline.

The decision to allow faster access to the market to rivals is likely to be justified on the grounds that Royal Mail, which has also regularly been accused of dragging its heels in agreeing deals to allow competitors on the market, is in a much more financially robust state than it was when the original 2007 deadline was set.

Full liberalisation will mean that anyone can use a competing service to send a letter. So far, only bulk mail customers such as banks and utility companies can use the service, sending letters in large batches.

The regulator is disappointed that Royal Mail's market share remains at around 99% and wants to encourage more competitors to the market.

Stapleton slammed Royal Mail in Postcomm's annual report last week: "It has only been since May 2004 that competitors have enjoyed any access to the Royal Mail network. This lengthy delay is most frustrating and, in our view, entirely inappropriate," he said.

Earlier this month, Royal Mail revealed that against a target of 92.5%, only 88.3% of first class letters were delivered the next day. However Royal Mail's chief executive Adam Crozier said that the service had improved month on month since dipping in the spring, when changes to the service took place.

Royal Mail has declined to comment on the regulator's proposed move.

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