Research has found that large business mail users will turn further away from An Post if prices are increased.
A report by the communications regulator ComReg says the most mail is sent by a small number of large businesses, such as utility and financial services companies, and that keeping costs down was one of the biggest concerns.
If those large mailers were to stop using An Post, its future would be compromised, the study indicates.
The report comes at a critical time for An Post, which has announced another review into its future operations.
An Post’s latest review, to be carried out by McKinsey, aims to “identify the structural changes necessary to restore the company to a sound financial footing” against the backdrop of one of the most challenging periods in its history.
Communications Minister Denis Naughten confirmed the company will be given greater pricing freedom for mail products in a bid to arrest its decline.
However, any cost increases will not be welcomed by large mailers, according to the ComReg research.
A hypothetical 10% price increase would bring forward significant moves to electronic mail, it found, while annual price increases have already created a general discontent for many large users.
As a result, firms are exploring ways to reduce their dependence on postal services, especially because they believe costs will rise again. The research says some large mailers are concerned with being overly reliant on An Post.
The report included in-depth interviews with large mailers including utilities, banks, and public bodies, a phone survey of SMEs that post a minimum of 50 items a month, and an online survey of consumers.
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