The privatisation of the Royal Mail Group will most likely take place in the first quarter of 2014, with a stock flotation being the main preference, its Chief Executive has told Reuters.
Idon't think that it is impossible that we could be in a deal mode in 2013, butpersonally I think it is probably more likely to be the first quarter in2014. My preference and I believe thegovernment's preference is a float.
Ofcom said that, subject to the safeguards it is putting in place, Royal Mail will make decisions on the price of stamps, not the regulator. It said it had put a cap on the price of second-class stamps for standard letters (55p) to protect vulnerable consumers.
Ofcom's decisions are designed to safeguard the UK's postal service, ensuring it is sustainable, affordable and high quality, to the end of the decade and beyond. The measures ensure that Royal Mail's products remain affordable for vulnerable consumers and small businesses.
Royal Mail has blames the following factors for a "significant deterioration" in its finances:
- Artificially low stamp prices
- Falling volumes of post (down 25% in six years)
- An increasing number of addresses (up by two million since 2009)
- Higher standards of delivery than any other EU country
Ofcom has said that the sustainability of UK’s postal service is at severe risk. It said that consumers and businesses switching to email and online services is to blame.
@itvlaurak I don't send many letters, email as much as poss and pay for stuff online - this rise will only make me do more of the same.
@itvlaurak This price hike only makes us do all business by email!!! should be cheap not 60p!! Sending by mail an expensive novelty now!
The new prices, showing increases of 30% for first class and 39% for second class, follow a huge reduction in the number of letters posted - down from 84 million a day six years ago to 59 million today.
We know how hard it is for households and businesses when our economy is as tough as it is now. No-one likes to raise prices in the current economic climate but, regretfully, we have no option.
That service is under threat from declining volume, e-substitution and ever increasing competition. Because of these pressures Royal Mail has lost £1 billion over the last four years; the sustainability of the service is now at risk.
Millions of people on low incomes will be able to buy up to 36 stamps this Christmas at the current price, Royal Mail said.
The cost of posting large letters will increase from 75p to 90p for first class and 58p to 69p for second class.
First-class stamp prices will increase from 46p to 60p and second class from 36p to 50p from April 30, the Royal Mail announced.