Ofcom rules out new restrictions on Royal Mail competitors
Regulator Ofcom says it will not impose new conditions on Royal Mail's direct-delivery competitors after deciding that the universal postal service is not under threat. - Credit: PA
Royal Mail has been dealt a fresh blow after regulator Ofcom said it would not impose new conditions on the firm’s direct-delivery competitors.
Ofcom said the universal postal service, which requires all letters to be charged at the same price, regardless of address, is not under threat because of the impact of competition.
However, it said it will initiate a broader review of factors affecting Royal Mail’s ability to deliver the universal service and will consider the company’s efficiency and its parcel delivery performance.
The regulator believes that competition from rivals will make the service more efficient.
Last week Royal Mail chief executive Moya Greene told MPs that its universal service obligation costs it £7.2billion and is being threatened by rivals “cherry-picking” lucrative urban routes and shunning loss-making rural areas.
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Ms Greene told the Business Select Committee that Royal Mail had already seen a “structural” decline of between 4% and 6% in the volume of letters it handles.
However, rivals such as Whistl and UK Mail deny the accusation of “cherry-picking”.
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And Ofcom said today: “We do not currently consider the evidence shows that end-to-end letter competition by Whistl presents a threat to Royal Mail’s ability to provide the universal postal service.”
