The UK postal regulator Postcomm has said it will delay its plans to end Consignia's monopoly over mail deliveries.

We want to see a robust and competitive Consignia at the core of a robust and competitive postal market

Graham Corbett, Postcomm

Postcomm had originally planned to begin opening up the postal market this year, but has delayed this until 2003.

The schedule has been put back 12 months to allow Consignia time to implement its restructuring programme.

Similarly, the full deregulation of the postal market had originally been slated to finish in spring 2006, but will now end in 2007.

Allan Leighton, chairman of Consignia - formerly known as the Post Office - had argued that the original schedule could seriously damage the loss-making postal service.

Survival struggle

Speaking to MPs last month, Mr Leighton said that the UK mail operator was "in a perilous state" and could go under.

New competition timetable

Jan 2003 - March 2005: Competition in bulk mail above 4,000 items - 30% of UK letter market by value April 2005-March 2007: Bulk mail threshold adjusted to cover 60% of market by value April 2007 onwards: All restrictions abolished - fully competitive market

He said the moves to open up the UK postal delivery market to greater competition had come "at the wrong time".

He added that managers were struggling to ensure that Consignia "existed at all" in a few years time.

The company has been hit by falling revenues due to increased use of e-mail and growing competition.

It lost �1.5m a day during the six months to November last year.

Consignia has already signalled its intention to cut as many as 30,000 jobs by mid-2003, and also aims to shut hundreds of post offices.

Postcomm listens

Postcomm chairman Graham Corbett, who has argued the virtues of increased deregulation, was conciliatory toward Consignia.

"Competition in the postal market will provide more reliable and more innovative customer services," he said.

"At the same time we have been listening carefully to the debate on our proposals.

"While keeping the essential framework intact we have made a number of detailed changes which collectively add up to a material shift in the balance of risk in Consignia's favour.

"We want to see a robust and competitive Consignia at the core of a robust and competitive postal market. That can only strengthen the universal postal service."