UK-based postal delivery operator Whistl has made public the recommendations submitted to competition regulator Ofcom regarding the latter’s investigation into the regulation of Royal Mail.
Ofcom began investigating Royal Mail in January 2014 following a complaint by TNT Post UK, now Whistl UK, regarding the changes in price and terms and conditions of the post’s bulk mail delivery services known as ‘access services’. Royal Mail subsequently suspended the planned changes in March 2014 and withdrew them completely in March 2015.
In July last year, Ofcom issued a Statement of Objections to Royal Mail after it provisionally found that the post had breached competition law regarding its access services. This month, Ofcom concluded the submission period for a discussion document between the two postal operators, and plans to issue a statement on the regulation of Royal Mail in the coming months.
Whistl’s recommendations include:
Stability in the market with a term of at least five years and a limitation on Royal Mail’s ability to make unilateral contract changes.
Mandated access to a wide range of services, as competition would benefit consumers of postal services by creating choice, driving efficiency, and promoting innovation.
Mandated access in the tracked/standard parcel area and in areas such as D+1, upstream points, post office counters and sale of goods via meters.
Develop a better way for requesting new services from Royal Mail.
Consider a separate wholesale business unit run independently of Royal Mail to deliver some of the improvements.
Eliminate the distortion on which wholesale customers and retail volumes enter the Royal Mail network.
Royal Mail wholesale needs to be appropriately resourced and incentivized to expand the areas in which access operates.
Set an appropriate access price cap to protect access customers from any exploitative pricing going forward.
Ofcom should set an explicit efficiency gain target and set out the consequences for failure.
Reduce transactional mail prices to those of advertising mail.
Nick Wells, CEO of Whistl, said, “Whistl is happy that Royal Mail is able to make a reasonable rate of return on the mail it provides, and would like to provide even more, if given opportunities to do so, however, this review sees Royal Mail remain unpunished, unrepentant and unrestrained for its anti-competitive activities.
“Greater and more constructive collaboration with the mail market is the way forward. Ofcom should encourage better ways of working so that access operators and their customers have an ability to promote jointly the use of mail, to feed into the change process and help Royal Mail tackle the inefficiencies that exist in its business.”
August 8, 2016