Zonal Pricing: who wins?

Postwatch has submitted its response to Postcomm's consultation on Zonal Pricing.

Postwatch understands the need and principle behind Zonal Pricing but this must be balanced with the potential impact on customers. The potential benefit of Zonal Pricing is outweighed by the potential disadvantages to customers, especially rural dwellers and competitors. Postwatch is not aware of any customer who has openly welcomed the proposals. Furthermore, Royal Mail may be damaging its own interests by potentially reducing mail volumes and revenues.

Based on the customer focused criteria, that the new system should not be introduced in a manner that avoids unreasonable changes for users of the services, we are concerned at the potential impact this initiative may have on:
- the future of the universal service,
- large mailers,
- mail volumes,
- competition,
- London, and
- rural dwellers (senders & recipients).

In addition, we have concerns surrounding:
- Potential zone anomalies,
- Cost reflectivity and revenue neutrality, and
- Communication and Implementation.

Postcomm will publish a further consultation in July/August 2007.

The full Postwatch response can be viewed here.