Royal Mail PLC Royal Mail response to Ofcom Statement (2644U)
28 Juli 2015 - 8:53AM
UK Regulatory
TIDMRMG
RNS Number : 2644U
Royal Mail PLC
28 July 2015
Royal Mail plc
28 July 2015
Royal Mail response to Ofcom statement
Royal Mail confirms that it has received today a Statement of
Objections setting out Ofcom's provisional, preliminary findings in
relation to its investigation into the terms on which Royal Mail
proposed to offer access to letter delivery services, alleging a
potential distortion of competition. The investigation was launched
in February 2014 following a complaint brought by TNT Post UK (now
Whistl) about certain proposed changes to Royal Mail's Access
contracts.
Royal Mail takes its compliance obligations very seriously and
is disappointed by Ofcom's announcement. The Company considers that
the pricing changes proposed in 2014 were fully compliant with
competition law. They were an important part of Royal Mail's
commercial response to both changing market conditions and to
Ofcom's statements in its March 2013 guidance document on
end-to-end competition in the postal sector(1) . Under the terms of
our access contracts, these pricing proposals were suspended
following the opening of Ofcom's investigation. Accordingly the
pricing proposals were never implemented and were withdrawn
altogether in March 2015.
Royal Mail is considering carefully Ofcom's provisional
findings. It will submit a robust defence to Ofcom in due course.
Royal Mail has cooperated fully with Ofcom throughout its
investigation to date and will continue to do so.
ENDS
For further information please contact:
Media Relations
Mish Tullar
Phone: 07423 524154
Email: mish.tullar@royalmail.com
Investor Relations
Catherine Nash
Phone: 020 7449 8183
Email: investorrelations@royalmail.com
Company Secretariat
Claudine O'Connor
Phone: 020 7449 8163
Email: cosec@royalmail.com
Notes
Access is where Royal Mail accepts mail that has been partially
sorted by large customers and other postal operators, at our Mail
Centre nearest the recipient's address. For an agreed price we then
deliver that mail to the recipient.
1 Ofcom: End-to-end competition in the postal sector: Final
guidance on Ofcom's approach to assessing the impact on the
universal postal service - (27 March 2013):
"Royal Mail could change its commercial strategy (i.e. pricing
and terms). In particular, under the current regulatory regime
Royal Mail has the ability to change the prices it charges access
operators. This includes the ability to change how access prices
are set for different geographic areas (currently the "zonal access
pricing regime") to ensure they are reflective of relevant costs.
This is particularly important given that in general an end-to-end
competitor will still need to rely on access to Royal Mail's
network to offer its customers full coverage of all addresses in
the UK. Royal Mail's flexibility in setting zonal access prices can
enable it to ensure that end-to-end competitors pay a cost
reflective price for Royal Mail delivering mail in the areas where
it has chosen not to enter (which may be the harder to reach, and
hence less profitable parts of the UK). In this way, Royal Mail may
be able to mitigate the impact on the universal service from an
entrant 'cherry picking' by delivering in lower cost areas and
handing over the rest of the mail to Royal Mail to deliver. In
addition, Royal Mail has the flexibility to negotiate changes to
its contracts both with its retail and access customers (subject to
competition law and the existing ex ante regulatory conditions on
access)."
This information is provided by RNS
The company news service from the London Stock Exchange
END
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