With the conclusion of the submission period for the Ofcom Discussion Document on the regulation of Royal Mail, Whistl has submitted a number of recommendations to the discussion process. Whistl are obviously unhappy and pretty vocal in their complaints.
The Ofcom review included its assessment of Royal Mail’s efficiency, analysis of its position within the letter and parcel sectors, and consideration of the company’s potential ability to set wholesale prices in a way that might harm competition.
Whistl has made the following submissions for Ofcom to consider:
- Stability in the market with a term of at least five years and a limitation on Royal Mail’s ability to make unilateral contract changes.
- Mandated access to a wide range of services as competition would be of benefit to consumers of postal services by creating choice, driving efficiency, and promoting innovation.
- Mandated access in the tracked / standard Parcel area and in areas such as D+1, Upstream points, PO Counters and sale of goods via meters will deliver much-needed choice for users of postal services.
- Develop a better way for requesting new services from Royal Mail which is much more even-handed, effective, speedy and transparent.
- Consider a separate Wholesale business unit run independently of Royal Mail to deliver some of the improvements that the postal market needs.
- Eliminate the distortion on which Wholesale customers and Retail volumes enter the Royal Mail network to ensure provision of service on the same arms-length terms for all users of the network.
- Royal Mail Wholesale needs to be appropriately resourced and incentivised to expand the areas in which access operates
- Set an appropriate Access Price Cap to protect Access customers from any exploitative pricing going forward which of course flows through to the retail prices.
- Ofcom should set an explicit efficiency gain target and set out the consequences for failure.
- Reduce transactional mail prices to those of advertising mail.
Nick Wells, CEO of Whistl said “Whistl is happy that Royal Mail is able to make a reasonable rate of return on the mail it provides, and would like to provide even more, if given opportunities to do so, however this review sees Royal Mail remain unpunished, unrepentant and unrestrained for its anti-competitive activities. Greater and more constructive collaboration with the mail market is the way forward. Ofcom should encourage better ways of working so that Access operators and their customers have an ability promote jointly the use of mail, to feed into the change process and help Royal Mail tackle the inefficiencies that exist in its business”.
Whistl aren’t alone in complaining that Royal Mail are abusing their powerful position. We’ve heard from a number of multichannel management providers (who prefer to remain un-named) complaining about new compulsory contracts Royal Mail are demanding they sign this month. The alternative offered to those unwilling to sign the new contracts is not to be able to offer Royal Mail label printing to ecommerce merchants.
Whistl say that Ofcom plan to issue a statement on the regulation of Royal Mail in the coming months. What do you think though, are Royal Mail too much of a monopoly or do we prefer a national provider that serves all ecommerce merchants and consumers alike even if that does make competition harder?