Royal Mail urges regulator to look into TNT Post’s challenge

[TrueBlueTerrier]

http://invezz.com/news/equities/5795-ro ... -challenge" onclick="window.open(this.href);return false;

TNT Post to begin deliveries in Greater Manchester, threatening Royal Mail’s near-monopoly on ‘final mile’

NVEZZ.com Tuesday, October 1st: While the market will be counting down to the Royal Mail IPO this month, the postal service company will face its first serious challenge outside London after a competitor announced plans to launch an army of rival postmen.

TNT Post is to create 1,200 new jobs in Greater Manchester in November. The private postal operator will launch 11 new delivery units in Bury, Manchester, Salford, Trafford and Wigan that will enable the firm to deliver to all households and businesses with M postcodes with its bicycle-only service. This will offer direct competition to Royal Mail, which currently has a near-monopoly on the ‘final mile’ of postal delivery.

Competition posing risk to Royal Mail IPO success

TNT’s plans come as the UK government attempts to float Royal Mail on the London Stock Exchange this month. The sell-off, set to be one of the biggest in British history, will see Royal Mail employees receive 10 percent of the organisation in shares, have priority over retail investors in purchasing stock, and have a smaller minimum purchase of £500, against £750 for the rest of the market. The government has also said that 41 percent of the company will be on offer to investors, but City analysts doubt Royal Mail will meet the £3 billion value needed to enter the FTSE100 on flotation.

The launch of the TNT Post’s new service will mean that mail handled by the private group — typically statements from banks, utilities, mobile phone companies and local councils and health trusts — will be delivered directly to homes rather than given to the Royal Mail to post. The effects of such competition were highlighted by Royal Mail in its flotation prospectus, published last Friday, as a risk to the success of its post-listing business model.

Yesterday, Royal Mail further argued that such initiatives would dent its profitability and undermine its commitment to the universal service under which it — but not private companies such as TNT Post — has to deliver to all addresses in Britain six days a week. In a statement, Royal Mail called on Ofcom, the regulator and competition authority for the UK communications industries, to look into TNT’s plans and maintain its vigilance over private postal companies cherry-picking its business.

Royal Mail’s consumer director Stephen Agar said as quoted by The Times: “Royal Mail welcomes competition, but this must take place on a level playing field.”

“Protect our Post Offices” campaign

TNT Post to begin deliveries in Greater Manchester, threatening Royal Mail’s near-monopoly on ‘final mile’ Separately, the owners and operators of local post offices around the country yesterday warned that the privatisation of Royal Mail posed a potentially ruinous threat to their livelihoods.

George Thomson, general secretary of the National Federation of SubPostmasters (NFSP), said as quoted by The Times: “There are real concerns that, postprivatisation, subpostmasters’ pay could see further cuts as Royal Mail’s new owners seek to maximise their profits.”
The NFSP launched a new “Protect our Post Offices” campaign and argued that the Royal Mail IPO should be halted. Yesterday, thousands of counter staff belonging to the Communication Workers Union and employed in the country’s 370 main high street post offices, staged a one-day strike over pay and closures.

[Phantom]

What the f**k did RM, CWU and GOVERNMENT think would happen???? 10 f***ing years of profit building by the private firms to only now say we can deliver it too.

We need to boycott this mail NOW!!! like we should have done 10 years ago.

[worktotime]

3 cheers for moya and her crew for delivering tnts mail while there looking to pick the areas they want and can deliver bulk drops to 3 days a week , surely it must be on the same playing field as r/m 6 days a week etc , I just cant believe these f***ing jokers.

[Pete22]

This is our future- makes you think why do we ever vote at all.

[Captain Scarlet]

What is going to happen with the USO is simple, in about 1/2 yrs time this Govt. will look again at the USO and say it's unfair that only RM have to abide by it and then abolish it so creating a fair playing

[cloherty1976]

What is going to happen with the USO is simple, in about 1/2 yrs time this Govt. will look again at the USO and say it's unfair that only RM have to abide by it and then abolish it so creating a fair playing

That's the beauty of privatisation but maybe one day they might have a orange box on the streets. I think when privatisation happens we can start undercutting the opposition on the dsa.

[hans solo]

im quite happy they can have all my dsa to deliver as well
lighten the load

[cloherty1976]

im quite happy they can have all my dsa to deliver as well
lighten the load

This is true but will lighten the workforce in time

[careful]

Why can't Rm go to holland set up in there backyard, tnt would not like that ?

[TrueBlueTerrier]

Why can't Rm go to holland set up in there backyard, tnt would not like that ?

They have - albeit only in the courier market http://www.gls-netherlands.com/" onclick="window.open(this.href);return false;

[Lounge Lizard]

What is going to happen with the USO is simple, in about 1/2 yrs time this Govt. will look again at the USO and say it's unfair that only RM have to abide by it and then abolish it so creating a fair playing

That's the beauty of privatisation but maybe one day they might have a orange box on the streets. I think when privatisation happens we can start undercutting the opposition on the dsa.

"they might have a orange box on the streets" - about twenty years ago TNT were saying that they would have a postbox on every street corner, but it hasn't happened because they don't want stamped mail, only bulk business mail.

[bennny7]

have they done it now so the shares will be cheaper and tnt can buy cheap get rid of the uso and a load of expensive postmen

[steven100]

Wait a minute, RM not wanting us to go on strike for threatening to boycott TNT and other competitors mail. Then 2 months later complaining to the regulator about TNT going to deliver mail in Manchester. Sorry but RM management . I'm assuming they are worried about their bonuses.

[Judgee]

Delivering the final mile is the expensive end of the business. TNT may try but there is a good chance they will fail. It's more profitable for them to have RM do the final mile while they sit back and count the profits. They also avoid the problems that running an extra workforce can cause. I give it 6 months before they scrap it and go back to just making money off RM workers sweat. They have a licence to print money as it is and they'll realise this soon enough.

[Lounge Lizard]

Delivering the final mile is the expensive end of the business. TNT may try but there is a good chance they will fail. It's more profitable for them to have RM do the final mile while they sit back and count the profits. They also avoid the problems that running an extra workforce can cause. I give it 6 months before they scrap it and go back to just making money off RM workers sweat. They have a licence to print money as it is and they'll realise this soon enough.

But if it's going to fail why did they extend it from West London to South/Southwest London and now to Manchester ?
Still a long way off the Highlands and Islands though.