Tag: Royal Mail

Postcomm’s Strategy ReviewA summary of emerging themes from Postcomm’s Strategy Review
In August 2006 Postcomm published a Strategy Review document for consultation. The review looked at whether we needed to alter our regulatory policies so we can continue to protect mail users in the future – from 2010 and beyond – and yet allow mail operators the flexibility to adapt to changes in the market.

This document briefly summarises emerging themes in the responses we received to that Strategy Review document.

Full document – Postcomm’s Strategy Review. The postal market 2010 and beyond: Emerging Themes (pdf, 429KB)
What respondents told us
Royal Mail said the current regulatory framework is no longer fit for purpose and is subjecting the company to serious financial pressure. It said Postcomm should allow Royal Mail to compete in the business market without any restrictions and limit regulatory interventions to stamped mail.
Royal Mail’s competitors pointed out that Royal Mail, which is focusing hard on retaining every item of mail, enjoys the advantages of economies of scale and the unique privilege of VAT exemption. They questioned whether our current regulatory tools are sufficient to deal with Royal Mail’s market dominance.
Postcomm’s main conclusions in the emerging themes document, on which we are seeking feedback, are:

Customers are benefiting from competition. However, Royal Mail is finding the impact of competition and of new media very difficult to cope with, in part because of its slow progress in improving efficiency and in developing new services. The universal service (USO) remains profitable and is being provided to a very high quality of service.
More innovation is needed in order to exploit the changing mail market. Mail operators in the UK are not fully grasping the opportunities – or facing up to the challenges – of new communications media to the extent that some of their European and North American counterparts are. Mail has some important characteristics, such as personalisation and hand delivery, which valuably differentiate it in a digital world. If operators focus on how their mail products can add value for users, there is no reason to accept the prospect of a contracting mail market.
Postcomm reaffirms its aim to move to less detailed regulation. If Royal Mail can improve its cost transparency and respond better to the changing market, Postcomm should be able to scale back the regulatory regime from 2010 onwards.
The universal service will be secured in a changing mail market. Postcomm is responding to Royal Mail’s request to remove business products from the universal service and, in doing so, it wants to promote a wider debate as to how the scope and specification of the USO should adapt to changing social, economic and technological conditions. However, the basic right to post a stamped letter anywhere in the UK for the same price will remain at the centre of the universal service.