Cable posts plans for Royal Mail privatisation A Royal Mail pillarbox in the village of Lacock, where the post office has been marked for closure despite a campaign from locals supported by actor Judi Dench, who filmed parts of the BBC period drama Cranford there. THE Royal Mail can trace its history back 500 years to the time of Henry VIII and its bright red "pillarboxes" dot streets across Britain from the Scilly Isles to Scotland. But change is coming as the company seeks to adapt to the decline in traditional "snail mail" and compete with the likes of Federal Express and UPS. Britain's coalition government has laid out plans to privatise the Royal Mail. Analysts have speculated that the company could be worth 3 billion pounds ($4.5 billion). The government plans to sell a majority stake but it has yet to decide on the exact amount - it'll leave that to market conditions. "This is logical," Business Secretary Vince Cable told the House of Commons. It is a commercial decision designed to put Royal Mail's future onto a long-term, sustainable basis. Tens of thousands of Royal Mail workers will be able to buy shares in the company and the government plans to retain a stake, opening the possibility it will sell more shares in the future. PICTURE GALLERY: The Royal Mail through the ages Although the red pillarboxes are protected by law, there are concerns that other parts of the Royal Mail - such as a six-days-a-week delivery service - may be under threat once it has to make its way profitably in the private sector. The Communications Workers Union, which represents Royal Mail workers, opposes the sale because of fears of potential job losses. There are also concerns that investors may be reluctant to buy knowing that the new company would operate under a constant threat of industrial action. Mr Cable tried to assuage fears, claiming that privatised delivery services in Austria, Germany and Belgium all "produce profit margins far higher than the Royal Mail but have continued to provide high-quality and expanding services." Nonetheless, there are also worries the Royal Mail's quest for profit may mean remote - and therefore higher-cost - communities in Britain will not get the same service as cities and towns. "The principle that has secured the universal service is one where the high-density areas, like the big cities, subsidise the rural areas," said Dave Ward, the CWU's deputy general secretary. The countryside will be completely cut off. But Britain's government is determined to move forward, describing the privatisation as critical to the future of Royal Mail, which has seen its revenues shift more toward packages and away from the mail of the past. The Royal Mail needs to invest in new technology to survive. Operating profit, excluding modernisation costs, rose to 211 million pounds last year. Parcels accounted for almost half of the group's 9.5 billion pounds of revenue in the last year. In the US, the financially beleaguered US Postal Service has no such plans to privatise. It is considerably larger than the Royal Mail, processing 160 billion pieces of mail last year. The Postal Service is an independent agency - it gets no tax dollars for its day-to-day operations but is still subject to congressional control. And it has massive financial problems to contend with - running up a $US16 billion loss last year. Most of the losses are due to a decline in mail volume and a congressional requirement that it make advance payments to cover expected healthcare costs for its future retirees. Similarly, there are no plans to privatise Australia Post, a government business enterprise more than 200 years old that lifted earnings 16.6 per cent to $281 million last year. However, Australia Post suffers the same malaise in its "snail mail" - which comes under its community service obligations - with its regulated mail business losing $148 million last year. In Britain, the cash-strapped government desperately needs the Royal Mail privatisation to work as the country struggles to recover from the economic crisis. In a country that has imposed tough spending controls and austerity measures on all government departments, investing in the future means getting at the end of a very long line. But tampering with a service so central to public life is also a delicate matter. Even the late Margaret Thatcher, who championed the sale of state-owned companies such as British Telecom and British Gas, backed away from privatising the Royal Mail during her tenure as prime minister back in the 1980s.