I can't believe that anyone would want to damage the fabric of Royal Mail by driving it into such a hole that it would cease to function, as a profitable organisation, but zonal pricing is not the answer to clawing back profits.
Zonal pricing could, and probably would, damage competition by reducing the cost of B2B mail.( This is the segment that Royal Mail want to reclaim)
Whilst this would be beneficial for Royal Mail, as it would obviously cut the price for big city distribution, it would wreck the alternative delivery networks at a stroke and this would be detrimental to competition.
This presents a dichotomy for Royal Mail and Postcom. Should Postcom acquiesce to Royal Mail's request to abandon the universal obligation of one price for all or should it support zonal pricing and cut competition?
In my opinion , it would be best to increase the public tariffs and add a few pence to the general overall cost. At least this way,we know where we stand and B2B mailers and mailing houses would not need to get into a lather about how to play the system or interpret the proposed new distribution regulations. On top of this , we maintain the universal price and encourage competition.
Despite all of this, the market will adapt to whatever is proposed.