Royal mail told to improve

[robd]

Royal Mail given extra pricing flexibility but urgent imperative must be transformation of its business9 August 2007

Royal Mail must transform its business and put greater emphasis on customers.
Royal Mail to be given greater flexibility to align some of its retail prices with costs.
The case has not been made for Postcomm to take any action on access margins.
Postcomm, the independent regulator for postal services, has proposed that Royal Mail be given extra flexibility to increase some retail prices but has decided to leave access margins unchanged in response to the company’s request to review some aspects of the 2006-10 Price Control (see Note 1).

Nigel Stapleton, Postcomm chairman, said:

“Postcomm is giving Royal Mail all the help it can to tackle its deteriorating financial situation; the ball is now firmly in Royal Mail’s court to address urgently its very high cost base. Reining back on competition, which is providing some growth momentum to the mail market, is not the answer. We have always supported a successful transformation of Royal Mail and, more importantly, the continued health of a universal service that reflects customer need. Accordingly, Postcomm is providing short term help by giving Royal Mail greater pricing flexibility from April 2008 to align the prices of some loss-making products more closely with costs.

“It is plainly wrong to suggest that competition from new mail operators is to blame for Royal Mail’s problems. In those parts of the mail market where competition has developed, volumes are growing but Royal Mail has lost share. This reflects competitors’ greater efficiency and customer focus. In all other parts of the mail market, where Royal Mail is not yet challenged by competition, mail volumes have declined in the past 12 months, because customers are resisting the higher prices that the company charges to recover its costs. Last year Royal Mail underperformed the 3% efficiency target in the price control and their projections suggest this gap will more than double over the next three years.â€

[DirtyHarry]

Nigel Stapleton talks bollox. Competition more efficient ?................... What feckin competition ?

[plodsie]

Nice touch by PostComm allowing RM to increase prices. I wonder how long before more businesses move to DSA to save themselves a fortune. It's a rise that encourages DSA, and will not encourage Royal Mail growth. We need investment big style, why can't the Government realise this?

[britwrit]

Humm, let's see. According to his Postcomm bio, Nigel...

"...works two and a half days a week for us, combining this role with others as non-executive director of the London Stock Exchange plc and non-executive director of Reliance Security Group plc..."

Gosh. I love it when someone with their snout deep in the government trough starts preaching about the wonders of the free market.