THE future looks bleak for Britain's Royal Mail, once one of the world's top mail sorting houses, after TNT Post, part of the Dutch post office beat out the "Queen's Messenger" on a major deal with BT.

BT, the UK's leading telecommunications firm and the country's largest bulk mailer awarded a three-year, GBP90 million (US$176.45 million) contract to TNT to handle more than 170 million items annually, mainly bills and statements, with final mile home delivery through the Royal Mail.

The postal contract is the largest since deregulation of the service in 2004. It is also a stinging rebuke of the Royal Mail's services, which has a history stretching back over 360 years, as BT used once to be a part of the Post Office before the era of privatisation of state services.

TNT said in a statement its premier service's value-added benefits of two-day time definite delivery for pre-sorted mail, flexible pick up times and tracking systems helped the mailing firm clinch the deal from BT, which has 25 million customers in the UK.

"Thanks to BT, this award of the biggest contract to date in the deregulated postal market to TNT Post is affirmation as our position as the main challenger to Royal Mail. We have the right product, at the right price with the right team. That is why our clients win by choosing TNT Post," said Nick Wells, CEO TNT Post UK, who added that he intended to win more business from BT.

TNT Post is part of the Netherland's-based TNT NV logistics group, which serves more than 200 countries, employing around 127,000 staff.