DX Ireland, which was considering starting a postal delivery service to rival An Post, has postponed the idea until after the postal market is fully liberalised, saying it is not financially viable.

Under the terms of existing legislation, any newcomer to the postal market has to charge 2.5 times the 48 cent charged by State postal operator An Post for all items under 50g.

DX Ireland managing director Kevin Galligan called on the Government to bring forward full liberalisation - currently scheduled for 2009 under the EU postal directive - or at least to show it intends to adopt legislation to provide for liberalisation in the future.

Speaking yesterday following publication of the results of a six-month feasibility study, Mr Galligan said there were significant barriers to competition in the Irish postal market and, as a result, the company would delay its plans to start up its own service until these had been removed.

"Our feasibility study clearly finds that we need full liberalisation of the Irish postal market before we can consider offering a door-to-door service," he said.

This finding comes less than two months after DX Ireland said it would extend its existing document exchange service to offer an early morning, next-day service for Government departments and State agencies to send post to each other without using An Post.

DX Ireland is a subsidiary of DX Services, a UK group listed on the London Stock Exchange. It already operates a document exchange service, which delivers more than 10 million items annually on behalf of 4,000 customers including A&L Goodbody solicitors, Bank of Ireland and several Government departments.

However, in the long run, the group is still looking to enter the door-to-door mail market. "We are very disappointed with the findings of our study and would call on the Government to move to full liberalisation as soon as possible," said Mr Galligan.

Currently, about half of Irish mail weighs more than 50g and is therefore open to competition.