ROYAL MAIL

Privatization of Royal Mail

Privatization of Royal Mail

Activities of the Royal Mail and the “Universal Service” Obligation

The Royal Mail belongs to the lives of the millions of people of the country who us it on daily basis. The company has large network of offices and network of people for spanning the country that can deliver the goods to every business and households at same price and six days of the week. It is a national “Postal Service” of the United Kingdom. A completely owned subsidiary of Royal Mail is Post Office Limited which involves in the operation of the national network of post office. The contraction of the post offices reflects the reduction in the activities of Royal Mail. The company remains responsible for the collection and delivery service of universal mails in the United Kingdom. Letters are deposited in the wall box or in a pillar. Deliveries are done at least one time in a day (except Bank Holidays and Sundays) at constant charges for all the locations within the country (UK). There is always Universal Obligations on the mail services of the country. Every mail company has to work under these obligations in order to remain legal.

The obligations include all those conditions which can make the company an efficient provider. The uniform pricing a universal service are the two main attributes of the Royal Mail postal service. The Royal Mail handles 71 millions of packages and letters to the addresses approximately 28 million in every day in parallel with its unique “Universal Service Obligation”. The privatization of Royal Mail is announced in July 2013 but it is still in controversies. The labour union are strongly opposing this change. The government has made commitment that the institutional and retail investors will be apply to buy the shares of the company. The opinion of employees of Royal Mail is this that increased prices of first class stamps will negatively affect the consumers. The aim of privatization by the Chief of Royal Mail is that the increase in price of stamps will protect the universal postal service.

Privatisation

The process of transferring is the ownership of a public service, agency enterprise and business from the public sector to the private sector (Farazmand A, 2001, pp.3-4). It reflects government transfer of functions of government to the private firms. Privatization also reflects two unrelated transactions, the first is that when a private company buy all the shared of the public company and also defines as private equity. The other one is demutualization of a mutual organization and demutualization in order to form a “joint stock company”. One of the main reasons of the privatization of the various companies is to increase the efficiency of the operations.

This efficiency is expected to come from private owners who focus to the profit maximization. As far as the privatization of Royal Mail is concerned the business secretary announced that the privatization will occur in April 2014(www.royalmail.com). The stock market is in consideration as the government does ...