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Postal users urge Ofcom to address industry competition issues

30 Sep 2011 12:30 BST Back
Postal users urge Ofcom to address industry competition issues
DMA News

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Postcomm, the UK’s postal industry regulator, will tomorrow (1 October) handover its powers to Ofcom, the country’s communications regulator. 

The switch is being made as part of Parliament’s adoption of postal reform legislation set out in the Postal Services Bill 2010. The reforms are expected  to pave the way for the privatisation of Royal Mail.

As reported by Post & Parcel last month, the shift will see the licensing regime for postal operators in the UK’s liberalised postal marketplace being replaced with a general authorisation regime. The new regulator will also take responsibility to designate one or more postal operators as universal service providers. 

The move has received a cautious welcome by UK postal service providers and business users, which are looking to Ofcom to address the issue of competition. Commenting on the handover Alex Walsh, the DMA’s head of postal & environmental affairs, said opening up the postal industry should be a top priority for Ofcom:

“We hope that Ofcom recognises the fact that it is business bulk mailers that make the Universal Service affordable – without their volumes it wouldn’t exist. 

“Ofcom must address the fact that the postal industry is a monopoly market; all mail users end up having to use Royal Mail services since it delivers 99% of all mail. This means that the options available in a competitive market, such as switching suppliers for a better service or a better price, simply aren’t there. 

“There must be checks and mechanisms that prevent the abuse of Royal Mail’s monopoly. The abuse of a monopoly position by excessive or unjustified price increases or detrimental changes to terms and conditions would drive those all-important business users into using other media and ultimately spell the end of the Universal Service.” 

The findings of recent research published by the postal consultancy, WIK-Consult, on the European countries that have already seen much higher levels of postal delivery competition than in the UK, showed that there has been a positive impact on the incumbent postal service provider’s ability to deliver to every household within its territory over the past ten years.

Posted by Sarah Wright

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