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27 February, 2007

Compete or die; either is fine with me

According to the BBC, the Royal Mail wants to increase the price of domestic postage stamps by 6p (an 18.75% increase on first-class, 20.7% on second class) to offset losses.

Those losses are currently partially met by charging more for business post, but the company wishes to be more competitive in that sector so wants to reduce industry's subsidy of domestic post i.e. charge consumers more in order to charge businesses less. They also want restrictions on lucrative junk mail to be repealed (which suggests they were hit hard by the discovery of their covert opt-out last year).

That's what the company wants. What's in it for consumers? It all seems a little one-sided to me.

The Royal Mail, or at least the BBC article, phrases this as an issue of the company's survival, but why the **** should I care? So long as a competitor can provide a comparable service, it wouldn't even slightly bother me if one particular supplier ceased trading.
It's an interesting coincidence that TNT has also announced today that they're to provide a door-to-door delivery service, the first to directly match the Royal Mail's.

If the Royal Mail wishes to be more attractive to the commercial sector, then it should stop pretending to be a service to the nation, and accept both the advantages and the exposure of the open market:

  • Charge a full, unsubsidised price for stamps – fine: I'll have no hesitation in switching to a cheaper competitor.
  • Charge businesses less – fine, though I'd be surprised if the Royal Mail could genuinely compete.
  • Deliver junk mail – fine, though the Royal Mail should then be subject to the Mailing Preference Service, thereby having to check the opt-out database before delivering.
  • Lose any remaining public support, fail to compete in an open market and go bust – absolutely fine with me.
OR
  • Retain the slightly misplaced public perception that the Royal Mail is something special, forget about commercial competitiveness, and stop complaining.

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