An Post has agreed a revised discount scheme with ComReg, the telecoms sector regulator, which clears the way for the implementation of a 7 cent increase in the price of a stamp.
ComReg had made the widening of its discount scheme a condition of a move by an Post to raise stamp prices. It had been concerned that An Post pricing structures did not make allowances for the needs of small and medium-sized companies.
The new tariffs will include a 17 per cent increase in the cost of a basic stamp, a new 60 cent rate for larger envelopes and a new 96 cent rate for other packets. An Post will also be able to increase a range of prices for its direct mail service, Postaim.
Discounts of 7-5 cents a stamp will apply to customers posting 500-7,000 letters. Discounts will also apply to firms accepting delayed delivery or submitting post before a certain designated time, under the new scheme.
An Post sought the price rise, which will be worth €18 million a year, after publishing its biggest annual losses of €70.5 million.
The semi-state said its restructuring plan was 18 months behind schedule. Despite aiming to cut 1,100 jobs by 2005 and taking a restructuring charge of €52.5 million in its 2002 results, the workforce grew by 200 last year.
ComReg chairperson Ms Etain Doyle said the discount scheme addressed the needs of small and medium firms as well as a broad range of organisations.
In a statement, she said: "An Post must give urgent attention to the cost, quality and efficiency issues which could threaten its ability to continue to provide an affordable and effective service."
Business leaders have reacted furiously to An Post's decision to raise charges. Credit card firm MBNA, which employs more than 1,000 Irish staff, warned ComReg last week that the prices threatened its ability to grow and compete in the Irish market.
Several other major firms - including Eircom, NTL and TICo Group, a major bulk mail producer - proposed alternatives to the price rises, according to submissions made to ComReg.
Eircom's submission outlines that, as a major user of postal services, it wished to see postal prices maintained at the lowest possible level. It proposed introducing a multi-year price approval scheme for An Post that would give customers a greater degree of predictability.
But in a reference to its own price regulation system, imposed by ComReg, Eircom said it recognised that prices must reflect the cost of providing a service.
TICo, which handles 400,000 items of mail for Irish firms every week, said the increases would make customers review their delivery arrangements. If it was cheaper to send mail from Britain, customers would move to produce and mail from there, the firm said.
