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TNT Post expands rival UK delivery service to Royal Mail

LONDON (Reuters) - Britain's No. 2 postal firm TNT Post is to begin deliveries in Greater Manchester in November as it steps up its challenge to dominant player Royal Mail, expected to be valued at as much as 3.3 billion pounds in a flotation next month.

TNT Post, owned by Dutch mail group PostNL, wants to establish a nationwide delivery network by 2015, providing Royal Mail with competition on the last leg of deliveries for the first time in its centuries of service.

The Dutch firm began its end-to-end delivery service, which involves collecting, sorting and delivering post without using state provider Royal Mail at all, in west London in April 2012, and in June expanded into the south west of the capital.

TNT Post said on Monday its move into Manchester, northern England, would create over 1,000 jobs.

Royal Mail has said such competition could threaten its ability to sustain a universal six-days-a-week, anywhere service. Its concern is that TNT Post can target delivery of only the most profitable parts of the post and ignore the rest.

Across the rest of Britain, TNT Post collects and sorts post before handing it over to Royal Mail to deliver.

Britain started taking orders for Royal Mail shares last Friday and said it would dispose of a majority stake.

(Reporting by Neil Maidment; Editing by Louise Ireland)