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Royal Mail regulation under review

16 Jun 2015

Communications watchdog Ofcom has announced a fundamental review of Royal Mail’s regulation, after its only national competition withdrew from the direct delivery market.

Whistl, the Dutch-owned delivery service, announced its withdrawal on 10 June, prompting Ofcom to launch its review.

The watchdog said: ‘The review will ensure regulation remains appropriate and sufficient to secure the universal postal service’.

It also aims to ‘assess the Royal Mail’s efficiency; consider its performance in the parcels market; and assess the company’s potential ability to set wholesale prices in a way that might harm competition’.

Ofcom established more commercial freedoms for Royal Mail in 2012. These were intended to ensure continued flat-rate, affordable services, during financially unstable times. Prices for second-class stamps are tied to the rate of inflation, while no cap exists for the cost of first-class stamps, leading some to speculate on a potential price increase.

Reports indicate that services have been steadily improving since the company was privatised in 2013.