Industry in brief Director of Postal Affairs, Charles Neilson provides his regular round-up of industry news.
Ofcompublishes review of the regulation of Royal Mail Ofcom set out its plans to regulate the postal market in 2012 with the intention that regulation should remain in place for five years. However due to significant changes, last year Ofcomconducted a
Ofcom findings at aglance Ofcom is extending the regulatory regime until 2022 and note: • that Royal Mail’s return on sales for 2014/15 was, for the first time, within the target range of 5-10% and latest accounts show it remained in range for 2015/16. • that genuine effort had been made to improve efficiency but there was still room for improvement with performance at the bottom end of the range. In particular improving the worst performing delivery offices would have a big impact. • that Royal Mail had increased prices but had done so conservatively and not to the maximum level that it could have done. • that generally consumers and businesses were very satisfied with the service delivered. Ofcom is therefore taking no further action to control Royal Mail’s pricing policies through specific price controls. Furthermore with the demise of Whistl’s end-to-end services and the limited chances of further end-to-end activity at scale, Ofcom felt that its proposals contained in the Access Pricing Review of 2015 were no longer as relevant and so has decided not to pursue these changes, but were still supportive of the link between price charged for delivery and Royal Mail’s zonal costs. Ofcomwas concerned that some ‘voluntary’ schedules in the Access contract
had shorter notice periods for Royal Mail tomake changes than they had envisaged when the regime was implemented and is proposing that these 30 day change terms are reverted to the statutory 10 weeks. Additionally Ofcomproposes where a retail service exists it would like Royal Mail to offer terms to Access customers within six weeks (rather than three months) of receiving the request. Ofcom stopped short of regulating areas of the Packet and Parcel marketplace despite acknowledging that Royal Mail had significant share in the smaller lightweight packet market. It will however closely monitor the cost allocation model between the letters and parcels business to ensure that there is no risk of its letters business cross subsidising its parcels business going forward. Ofcom did not rule out providing Access facilities for the market but said it neededmore evidence before it could act. “ Whistl welcomes the regulatory certainty that the Ofcomproposals bring for the next five years. With a focus on delivering value for customers, Whistl would like to see more areas opened up to wider competition such as the packet and parcel market. We’ll continue to work with Ofcom to provide the evidence it needs to consider this.” Charles Neilson Director of Strategy & Postal Affairs
fundamental review of the regulation of Royal Mail, publishing a discussion document so that stakeholders could input their views. Ofcom’s proposals as a result of this reviewwere published in May 2016 and the topics most relevant for Access customers have been
summarised below. These are proposals for consultation and all customers can respond by 3 August 2016.
To download a copy of the full document visit
http://stakeholders.ofcom.org. uk/consultations/royal-mail- regulation-review/
email whistl.communications@whistl.co.uk write NatalieWalker, Whistl UK Ltd, Meridian House,
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Whistl Magazine • Spring 2016 Whistl Mag zine • Summer
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