The first stage would allow operators to apply for licences to handle batches of mail from large users containing more than 4,000 items. Operators would be able to deliver this mail themselves or pass it to Royal Mail for them to deliver. This would open up around 30 per cent of Consignia’s market.

Stage one would also allow operators wishing to provide consolidation services – the collection and sorting of mail that is then passed to the Royal Mail for final delivery – to apply for licences from April. This would enable operators to combine mail from smaller firms so that they can benefit from Consignia’s ‘Workshare’ discounts.

In addition, Postcomm will consider further licences for certain defined or niche activities, such as for small-scale local deliveries or specialised business mail services which will provide customers with increased choice.

The proposals, contained in a consultation document, are for the market to open in three phases as follows:

• Phase one, from 2002 – 31 March 2004: Bulk mail above 4000 items, consolidation services, certain niche services – around 30 per cent of Consignia’s market by value
• Phase two, from 1 April 2004 – 31 March 2006: Opening up approximately a further 30 per cent of the market by lowering the bulk mail threshold as appropriate – this is expected to be to between 500 and 1000 items per mailing. Plus a review of restrictions on consolidation licences with a view to enabling operators to pass mail for delivery to operators other than Royal Mail
• Phase three, no later than 31 March 2006: All restrictions on market entry abolished.