Royal Mail’s ability to deliver across the UK for a single price under the universal postal service is not under threat, according to regulator Ofcom.
The regulator’s comments follow Royal Mail’s call for a review of the universal postal service to be brought forward from its planned start date of late 2015 amid claims that direct delivery companies can undermine the economics of the universal postal service without providing clear benefits to consumers and businesses.
Despite rejecting Royal Mail’s claims, Ofcom is to initiate a broader review of factors affecting Royal Mail’s ability to deliver the universal postal service. These factors include efficiency and parcel delivery performance.
Ed Richards, Ofcom chief executive, said: “Ofcom’s board has considered all the evidence in the postal market carefully over the past few months. We have concluded that there is no present risk to the financial sustainability of the universal service. This conclusion is based on Royal Mail’s own business plan and evidence, as well as a range of other data.”
Ofcom’s statements mark the completion of the first stage of a major review into the sustainability of the universal postal service. The regulator said that it may still conduct a further review of competition near the end of 2015 if necessary.