Royal Mail faces full competition from January

The postal service will be opened to full competition from next January, 15 months earlier than planned, paving the way for private firms to deliver letters in opposition to the Royal Mail, it was announced today.

The postal service will be opened to full competition from next January, 15 months earlier than planned, paving the way for private firms to deliver letters in opposition to the Royal Mail, it was announced today.

The industry's regulator Postcomm said that from 2006 licensed firms will be able to collect, transport and deliver letters.

Customers will be given a "real choice" and will increase pressure on the Royal Mail to raise its game, said Postcomm.

The Royal Mail said it was ready for competition, but the Communication Workers Union (CWU) warned that the move would threaten the system of delivering a letter anywhere in the country for the same price.

Nigel Stapleton, chairman of Postcomm, said: "After three months of consultation, a substantial majority gave the thumbs-up to competition.

"We can now look forward to a more innovative and efficient postal industry focused on providing customers with the services they want, rather than being told by a monopolist what services they can - and cannot - have.

"This is only the first step in a process which the commission hopes will eventually see market forces replace regulation as the main driver of an efficient and effective mail industry."

Royal Mail chief executive Adam Crozier said: "We recognise that the regulator is getting on with his job, and welcome faster competition as long as it comes without unfair restrictions on Royal Mail.

"What we now want to see is a successful transition to full competition. For customers, that means proper safeguards to avoid a damaging free-for-all and to ensure that all mail is secure, and that it is clear who has collected and delivered it and who is responsible for sorting out problems.

"Royal Mail wants to be able to compete fully and fairly from the start. We're determined to earn business in the new market so that we can continue to finance the one-price-goes-anywhere universal service - which remains at the heart of what we do. We can only do this if the handcuffs come off."

Billy Hayes, general secretary of the CWU said: "The Dutch and German post offices in particular must be rubbing their hands in glee at this ill-advised and regrettable decision.

"At a stroke they are being allowed the opportunity to compete head-on with Royal Mail while still enjoying the benefit of strong protection in their home markets.

"We all know and accept that postal liberalisation is coming - but the CWU simply cannot understand why a British regulator seems so determined to place the nation's postal service at a competitive disadvantage to rivals that will not be subject to the same challenge in their own home markets.

"The sad thing is that British consumers are the ones who could easily end up suffering as a result of this macho posturing by Postcomm."

Consumer group Postwatch said full competition will re-enforce, not undermine, the delivery of the universal service.

"The main threat to this service is an inefficient Royal Mail," said chairman Peter Carr. "Liberalisation is good for Royal Mail, as it will maintain the pressure to deliver quality of service to customers, improve efficiency and drive innovation."