After consulting customers about a move to Size Based Pricing (SBP) and for a period Format Pricing during 2003 and 2004, Royal Mail has added further confusion by now announcing its Pricing in Proportion (PIP) proposals.
Peter Carr, Chairman of Postwatch commenting on the proposals said: “We understand and support moves by Royal Mail to price products in accordance with associated costs. It is important that the dominant monopoly service provider’s products are cost reflective in the UK’s fledgling competitive market. Otherwise Royal Mail could unfairly subsidise some of its services to retain market share.
“We will be considering Royal Mail’s revised proposals carefully and will in particular be looking for the evidence that the proposals are in fact cost reflective, revenue neutral and as customer friendly as possible. We are, of course, concerned many domestic customers will find the change confusing. A properly funded awareness campaign will help customers get to grips with this important change. “It is certain the Regulator, Postcomm, will use these new proposals as the basis for a formal consultation. It is essential that consultation is thorough and meaningful and that the outcome is not predetermined. Royal Mail is pressing the Regulator to rush out a consultation document next week and they always seem to get what they want no fines etc.
“Postwatch has been promised by the Regulator that customers will be given at least one year’s notice of the change. That notice has to start with the publication of the Regulator’s final considered decision not the publication of its consultation document.”
