MPs launch postal competition inquiry

MPs have launched an inquiry amid claims that Royal Mail faces unfair competition.



The inquiry into competition in the UK postal sector is being conducted by MPs on the business, industry and skills select committee.


It will look at the impact of competition on Royal Mail's obligation to provide a universal service across all parts of the country.


The inquiry will also consider access and end-to-end delivery of mail.


Royal Mail has long claimed that its universal service obligation gives rivals an unfair advantage when delivering mail and parcels.


It argues that competitors can pick and choose where they provide a delivery service, enabling them to cherry-pick the most profitable parts of the country.


But Royal Mail is legally obliged to serve all parts of the country – including less lucrative and more isolated areas where distances are greater between deliveries.


Earlier this year, Royal Mail warned that "unfettered" competition threatened to end regular daily postal deliveries to rural areas.


The recently privatised firm called for an immediate review of the issue and the implementation of any regulatory changes needed to safeguard its "universal service".


"Urban areas have high delivery point densities and higher numbers of items per address," it said in a submission to communications regulator Ofcom.


"This makes the unit cost of delivery lower in these areas, whereas the revenue generated per address tends to be higher than average."


Written evidence to the inquiry must be submitted via the web portal Competition in the UK postal sector and the universal service obligation – by Friday 24 October.


 

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