Lack of competition as only rival Wistl, withdraws from market
The withdrawal of Royal Mail’s only national rival, Whistl, has prompted a review into whether the 499-year-old postal service has a monopoly on the national post market.
The move by Ofcom will re-examine the pricing structures the service has enjoyed since 2012, when rules were loosened on the understanding that Royal Mail would face increased competition for business.
But pricing rules could now be re-introduced to protect customers from high prices that the company will have no desire or need to drop given the lack of competition.
In a statement Ofcom said: “The review will ensure regulation remains appropriate and sufficient to secure the universal postal service, given the recent withdrawal by Whistl from the ‘direct delivery’ letters market, which has resulted in Royal Mail no longer being subject to national competition.”