Jersey Post will have competition from two companies
Two companies have been given licences to provide postal services in Jersey.
The already struggling Jersey Post has been expecting this increased competition and is planning to cut its operations.
The licences will enable Citipost and Hub Europe to provide postal services to the business sector.
The decision by the Jersey Competition Authority follows a lengthy review of the postal market.
Citipost and Hub Europe services will start with the packet market late 2010 and large letters from January 1 2012.
The competition authority said the move will ensure customers continue to get a high quality postal service
Jersey Competition Authority executive director John Curran said Jersey Post has a real incentive to make changes to its business to meet the needs of the market.
Jersey Post plans to make more than £4m of savings including cutting staff and deliveries.
Mr Curran said competition will ensure customers continue to get a high quality postal service and will be an incentive to Jersey Post to become more efficient.