UK's Ofcom proposes changes to Royal Mail's obligations (updated)

International Distribution Services

30/01/2025 07:23

(Rewrites through, adds details from Ofcom statement in
paragraph 1, 6, 7, Royal Mail response in paragraph 4)
       Jan 30 (Reuters) - Britain's Ofcom has proposed changes
to Royal Mail's obligations including so-called second-class
letters delivered on alternate weekdays instead of Saturdays,
the regulator said on Thursday.
    The Royal Mail, which has been trying to transform and
modernise its business as it shifts its focus to parcels, has a
legal obligation to deliver letters Monday through Saturday and
parcels Monday to Friday as well as offer two delivery speeds -
first class for next day and second class for within three days.
    Ofcom, which is the regulatory authority for broadcasting,
telecommunications, and postal services, said the proposals are
expected to help Royal Mail realise annual net cost savings of
between 250 million pounds and 425 million pounds ($310.9
million and $528.5 million).
    "As Ofcom's analysis shows, it is no longer financially
sustainable to maintain a network built for 20 billion letters
when we are now only delivering 6.7 billion," Royal Mail said in
a separate statement, adding that the regulator has recognised
the "urgent need" for change.
    Royal Mail had urged Ofcom last year to introduce reforms by
April 2025 at the latest.
    The regulator also said that Royal Mail must invest in its
network to become more efficient and added that first class
letters would remain at six days a week, and that the price cap
on second class stamps would continue.
    
($1 = 0.8041 pounds)

 (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Sonia Cheema and Mrigank Dhaniwala)
 ((abyjose.koilparambil@thomsonreuters.com;))