20 Jun 2014 10:35
20 June 2014
Direct delivery competition: regulatory submission
Royal Mail plc. (RMG.L) has today made a formal evidence submission to Ofcom setting out the threat to the universal postal service posed by unfettered direct delivery competition. It requests that Ofcom commences an immediate review of direct delivery and determines quickly the regulatory changes needed to safeguard the universal service. The submission is published at www.royalmailgroup.com/directdeliverysubmission
The regulatory submission follows Royal Mail's previous statements on direct delivery competition. These include a detailed response to Ofcom's October 2012 consultation 'End to end competition in the postal sector - Draft guidance on Ofcom's approach'; a statement on direct delivery competition in December 2013; and an update in Royal Mail plc preliminary results for the full year 2013/14, published in May 2014.
Based on our estimates of the impact of TNT Post UK's publicly-stated plans, this could reduce Royal Mail revenue by over £200 million in 2017-18. Our analysis indicates that the underlying economics of the UK postal market would create strong incentives and opportunities for TNT Post to achieve a wider roll-out and larger market share than its current publicly-stated plans suggest. Absent intervention from Ofcom, our analysis indicates that our ability to reach a 5-10% EBIT margin for the Reported Business sustainably in the future would be undermined.
ENDS
For more information contact:
Media Relations
Neil McCrae
Phone: 07776 995738
Email: neil.mccrae@royalmail.com
Mish Tullar
Phone: 07423 524154
Email: mish.tullar@royalmail.com
Candice Macdonald
Phone: 07436 267324
Email: candice.macdonald@royalmail.com
Investor Relations
Catherine Nash
Phone: 020 7449 8297
Email: investorrelations@royalmail.com