An occasional blog to accompany the business news on BBC Breakfast.

Tuesday, May 02, 2006

Competition

Neil Hughes: "What do we expect - deregulation has allowed competitors to cherry pick the profitable bits of the postal service, while A.L. remains under pressure to deliver profits. Why should the Mail be profitable anyway?"

Allan Leighton:
To be able to provide the public service element of the Royal Mail ie the universal service - the company needs to be profitable. Otherwise the taxpayer would foot the bill. Over the last 3 years we have saved the taxpayer at least 3 billion by being a commercial entity that provides a public service.

Declan: And how big an impact has competition had on you? Have you lost business?

Allan:
Every single one of our major business customers has transferred some mail to competition. And we have lost in excess of a billion items to competition in downstream access. We expect this to be 3 billion in the current financial year.

Declan: How much financial pain does that cause you?

Allan:
Plenty !

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