25th May 2016 06:52
LONDON (Alliance News) - UK media and communications regulator Ofcom on Wednesday said it will not impose new price controls on Royal Mail PLC and will leave the current regulatory framework on the postal services provider intact.
Ofcom said that, given the declining letters market in the UK and increased competition in the parcels market, it has not proposed any new price controls on wholesale or retail products sold by Royal Mail.
The regulator added it intends to leave in place the framework introduced on Royal Mail in 2012, which provided it with greater commercial freedom. This includes a safeguard cap placed on stamp prices.
The only new rules the watchdog has proposed cover the access market, in which rival operators collect and sort mail before handing it to Royal Mail to complete delivery.
Ofcom said it proposed tightening rules in this area, first by stopping shorter notice periods around contractual terms imposed by Royal Mail on access operators, and second for Royal Mail to respond within two weeks when a wholesale customer requests a product similar to one already sold by Royal Mail.
Ofcom also said it was concerned Royal Mail may be able to "cross subsidise" its parcels business through its letters business in a way that would disadvantage other parcels operators. It will monitor this closely in the future, the regulator said.
Royal Mail noted the publication of the Ofcom statement and said it will review the outcome before providing a more detailed response.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
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