The Royal Mail Has Lost Its Sole Right to Deliver Your Post

By Lisa Adams and Maria Croce

POSTAL wars hit Scotland today as the Royal Mail’s monopoly ended after 370 years For the first time since the reign of Charles II, rival companies will be able to collect, sort and deliver first and second class letters.

The shake-up is great news for customers as it will boost standards and cut prices, predict experts.

A spokeswoman for consumer watchdog Postwatch said: "We welcome this competition.

"It means more choice, better service and prices should go down.

"In time, we should see innovations such as cheaper stamps, a choice of collection points and faster deliveries."

The changes mean our streets could soon be littered with different coloured post boxes.

It may even lead to a selection of cheaper, rival stamps going on sale and competing postmen may eventually be pounding the streets, doing the same rounds.

The main battleground at first will be for business post, which accounts for 80 per cent of the market and helped boost Royal Mail profits by 20 per cent to pounds 159million in the first half of last year.

Limited competition was introduced in 2003 when rivals were allowed to compete for the business of firms with large quantities of mail.

Barclaycard,Vodafone,Tesco and Sky have already switched from Royal Mail.

Now the rest of the pounds 6.5billion-a year UK postal market will be opened up to competition.

From today, 14 postal operators are able to compete fully with Royal Mail in the letter market.

The Royal Mail’s toughest rivals include DHL, part of Deutsche Post which is Europe’s biggest postal group, and UK Mail,owned by Business Post Group.

TNT Mail, the UK arm of the Dutch mail company TNT NV, is also seen as one of Royal Mail’s toughest competitors with big contracts with companies such as Sky.

At first, big organisations such as banks, utilities and government departments will benefit most from the postal revolution as they are offered cheaper deals on their mail shots. But small businesses posting as little as 100 letters at a time shouldalso soon see a difference.

A Postwatch spokeswoman said: "Already UK Mail offers a service for people posting 250 items in one go. We think that will fall to around 100 by the end of the year.

"We are encouraging small firms to go on to the website of the regulator Postcomm, check who the rival operators are and contact them."

But the Royal Mail, which delivers 80 million items daily, has vowed to hold on to the lion’s share of the lucrative mail industry.

Royal Mail spokesman David Simpson said: "Royal Mail will fight hard for every single letter.

"We are already delivering a record quality of service to our customers and we’re determined to do even better. Royal Mail is determined to compete successfully in the open market.

"But in order to do so, we need a fair regulatory regime and the ability to invest pounds 2billion in the modernisation of the business."

They are appealing to the Government for this pounds 2billion to pay for new equipment to help catch up with competitors after years of under-investment.

Britain is the third country to end a monopoly on the postal market, after New Zealand and Sweden.

The Royal Mail began as a personal mail service for Henry VIII, but was opened up to the public in 1635. It pioneered the world’s first stamp, the Penny Black, in 1840.

Today it is still a state-owned business and delivers items to 27 million addresses a day. Industry regulator Postcomm predicts the Royal Mail will still have nearly 90 per cent of the market in 2010

HOW THE REST HAVE FARED

ROYAL Mail is not alone in losing its monopoly – other services within the UK have been forced to face fierce competition.

When industries are deregulated it means Government controls on how they’re operated are removed, allowing other firms to compete for business PHONE BT became a public limited company in 1984 when the UK telecoms industry was deregulated. It’s now thelargest fixed- line supplier inthe UK, providing a range of phone and internet services.

Even though deregulation was more than 20 years ago, BT still retains around 70 per cent of the market. About two thirds of people who switched have moved to cable companies – possibly to take up digital TV services. BT is now planning a move intoTVGASCustomers have had the chance to cut their bills since the domestic gas supply market was fully deregulated in June 1998. Average price reductions of around 10-20 per cent were estimated after customers received the optionof choosing from a numberof supplying companies.

ELECTRICITY UK customers can choose to buy their electricity from a number of different suppliers after the industry was fully deregulated in September 1999. This has meant savings for the customer – estimated at 5-20 per cent depending on the area andenergy used.

TRANSPORT The Transport Act of 1985 deregulated bus services, which had previously been owned and operated by councils and local transport authorities. Theinitial increase in competition meant more buses, more frequent services and lower fares.

But there have been claims more buses were operating carrying fewer people which added to congestion.

Firms merged, which some claim has lead to higher fares, lower levels of service and less commercial routes scrapped. Some regions now have a monopoly bus company. The UK rail network was privatised in the Nineties, allowing companies to bid for railfranchises. But travellers have complained of ticket increases and congested carriages