Britain’s beleaguered postal operator has been given the green light to raise stamp prices by regulator Postcomm.
Royal Mail Group – currently bleeding around £1 million ($1.6m; €1.5m) a day – will raise the cost of first and second class stamps by a penny to 28p and 20p respectively. It will also have the option to put up second class stamps by a further penny next year.
The price rises, which will come into effect on April 17, are projected to generate an extra £750m in the next three years.
However, Postcomm risked the wrath of Royal Mail chairman Allan Leighton by proposing a revised range of price controls for the rest of the operator’s activities. Leighton has been furiously lobbying against such a move.
“The question Royal Mail's board now faces is: do these complex and tight price control proposals give us sufficient financial headroom over the next three years?” the chairman fumed.
“If the answer is no, then our ability to provide a one-price universal service will be destroyed and we will have to trigger a reference of the proposals to the Competition Commission.”
Royal Mail will respond to Postcomm’s proposals in 28 days.
Data sourced from: multiple sources; additional content by WARC staff