Royal Mail to be Slammed in Ofcom Annual Report

Royal Mail can expect harsh criticism from communications watchdog Ofcom when it publishes its annual update on the postal service next month, according to media reports.

Both the Evening Standard and The Independent have reported on Ofcom's intentions to slam Royal Mail. The watchdog is expected to echo criticisms made by Whistl (formerly TNT Post) that Royal Mail "lags behind" other European Union postal services.

Whistl contacted the Commons Business Select Committee, stating that Royal Mail's figures prove that "productivity is not a sufficiently high enough management priority".

Royal Mail is pushing for new regulations to be imposed on Whistl and other potential rivals, so that they would have to deliver to every home and business in the region they serve, for a set minimum of days per week, rather than "cherry picking" where to deliver.

Royal Mail is obliged to deliver to all 29 million UK addresses, including remote homes on loss-making routes.

However, Ofcom may well be unmoved by Royal Mail's regulatory overtures, and may agree with recommendations made to the Commons Business Select Committee. Ofcom is understood to want to foster competition within the sector, which has high start up costs.

Royal Mail currently still delivers 99% of mail. But last week it reported that annual profits were down to £279m from £353m last year.

However, a source told both the Evening Standard and the Independent: "Ofcom doesn't think that the universal service is under threat at the moment."

It is thought that Ofcom will echo criticisms made by Whistl (formerly TNT Post) that Royal Mail "lags behind" other European Union postal services in a number of areas, including cost reduction and work flexibility.