Justification for postal monopoly 'no longer valid'

Traditional justification for maintaining Consignia's monopoly was no longer valid, postal regulator Postcomm said today in its report setting out a timetable for increasing competition in the market.

Mail markets were changing because of the growing use of alternative technologies by customers and operators and a general move internationally towards increased competition, said the report.

Alternatives to post were increasingly being offered, heightening pressure on Consignia to be innovative and flexible.

"Postcomm thinks that if Consignia is to thrive, it must embrace these developments and look for ways of providing customers with more choice and better value for money.

"Consignia's current monopoly in the letters market is not working in the best interests of postal users."

Around nine out of 10 letters are posted by businesses, who are demanding more innovative services, said the report.

"About one in 10 letters is posted by members of the public who expect a punctual and reliable service, but have suffered as Consignia has consistently failed to meet its own delivery targets."

The report accused Consignia of allowing costs to rise at a faster rate than its revenue growth.