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Business

Deutsche Post to Enter British Letter-Delivery Market

The German postal services giant says it expects to receive a preliminary license for Great Britain that will allow it to deliver up to 40 million letters a year, half the number that Britain’s ex-monopolist delivers.

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Deutsche Post -- soon to be arriving in England?

German postal services and logistics giant Deutsche Post AG is continuing its rapid expansion in Europe.

A spokeswoman confirmed Wednesday that the company expects to be granted a license before the end of this month, allowing it to enter the letter-delivery market in Britain. "But we don’t have the license yet," she cautioned.

A British license would take effect immediately. It would initially allow Deutsche Post to make 40 million letter deliveries a year – around half the volume currently handled by Britain’s state-owned Royal Mail service, recently renamed Consignia.

People close to Deutsche Post in Bonn said that the aim was to eventually obtain a full, long-term license for the British market.

The liberalization of Britain’s letter-delivery market was originally scheduled for April this year but was postponed after Cosignia warned it would go bankrupt if exposed to competition.

Adhering to European Union guidelines, the British government now plans to open up the market in three phases between 2003 and 2007.

Deutsche Post currently operates on the British market via its 50% subsidiary Securicor Omega Express, whose license merely permits it to handle the internal mail of two major banks, Royal Bank of Scotland and HSBC.

Deutsche Post declined to comment on possible plans to forge new partnerships or make acquisitions in Britain. It said it planned to mostly utilize Consignia’s existing network.

Chief executive Klaus Zumwinkel has repeatedly stated that expansion abroad was part of the Deutsche Post strategy to offset the effects of its shrinking monopoly at home. As recently as the start of July he announced that his group planned to compete against market leader TNT Post Groep in the Netherlands. TNT also has its eye on the British market.

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