Britain's postal service will be fully opened to competition from January 1, 2006, ending the Royal Mail's 350-year-old monopoly 15 months earlier than planned, industry regulator Postcomm said yesterday.

"After three months of consultation, a substantial majority gave the thumbs-up to competition. We can now look forward to a more innovative and efficient postal industry focused on providing customers with the services they want, rather than being told by a monopolist what services they can - and cannot - have," Postcomm Chairman Nigel Stapleton said in a statement.

The decision means that from 2006 licensed companies other than Royal Mail will be able to set up collection boxes, collect, transport and deliver any mail, from single letters to bulk mailings.

So far, competition has been restricted to 30 per cent by value of the letters market and to companies handling bulk mail in batches of 4,000 letters or more.

This was introduced in January 2003 and licences have been granted to firms which include Europe's biggest postal server, Deutsche Post, and business-to-business mail company DX Services .

Full competition was proposed in 2002, at a time when Royal Mail - then called Consignia - was losing one million pounds a day and struggling to introduce a three-year renewal plan.

Since then it has returned to profit and continues to dominate UK licensed letters delivery, with a 99 per cent share of a market worth about £4.5 billion a year, Postcomm said.

In the liberalised market, Royal Mail will still be required to provide a universal postal service for first- and second-class mail of one delivery and one collection each working day at a uniform price throughout Britain, and also provide a business mail service on universal service terms, the regulator added.