Royal Mail review likely to prompt call for split

[jemima]

From The Times
http://business.timesonline.co.uk/tol/b ... 059978.ece

"December 17, 2007

Royal Mail review likely to prompt call for split
Christine Buckley

A wide-ranging review of the effect of competition on Royal Mail is expected to be announced today amid concerns that the group’s ability to provide a core service is being damaged.

John Hutton, the Business and Enterprise Secretary, will announce the review amid pressure from unions and Labour MPs who fear that Royal Mail is suffering because its rivals can take on lucrative business contracts but do not have the same service obligations to the public as it does.

However, the review is also likely to trigger strong pressure for a major revamp of Royal Mail, including splitting it in two.

As part of its licence to operate, Royal Mail must provide a universal service, meaning that post can be sent anywhere at a flat rate. This is profitable in cities and for short distances but is not economic across long distances and for remote destinations.

The postal group has asked Postcomm, the industry regulator, to modify this obligation to reflect its costs. It has been unsuccessful in its request, although it has been allowed a series of stamp price rises.

In the review, rival postal operators, such as TNT and Business Post, are likely to be asked to help to fund Royal Mail’s universal service obligation.

John Grogan, the Labour MP for Selby, who has campaigned to keep full public ownership of Royal Mail, said: “If the private sector companies are strong enough, then I think they should make a contribution to the universal service. The more successful they are [the more] they should contribute accordingly.â€

[andy2007]

Splitting up RM is the last thing that they should do! What they should be doing, is imposing the same conditions on our competitors, that we ourselves have to deal with. Namely: the USO.

Wether they achieve this through infastructures which they create themselves, or through Downstream Access, is frankly irrelevant. But everyone should have the same obligations. As for the VAT exemptions: they could offer the same exemptions to ANYONE willing to deliver the final mile.

Do they really think that the VAT exemptions actually pay for the cost of the USO?!?!? Wake up and smell the coffee guys! Why should we be the only ones to cope with the burden of a network capable of providing the USO?

If we were split up, then it would cause a hefty rise in Postal costs across the board, or some form of Zonal Pricing. Both of which are totally unacceptable! The USO is there for a REASON! IT SHOULD BE DEFENDED AT ALL COSTS!