(Reuters) -International Distribution Services on Wednesday said Royal Mail was concerned that regulator Ofcom’s proposed changes to the universal service obligation and new reliability targets could add significant costs.
Ofcom, which is the regulatory authority for broadcasting, telecommunications, and postal services, had proposed changes to Royal Mail’s obligations due to declining letter volumes.
Royal Mail is owned by IDS, which has accepted a takeover bid from Czech billionaire Daniel Kretinsky.
The firm has long called for reforms to the nationwide single-price first- and second-class service obligation and proposed the introduction of new additional reliability targets.
Royal Mail said it was concerned that the level at which Ofcom is proposing to set the new reliability targets is “over specified” and will add significant cost to the delivery of the universal service.
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.
Royal Mail also proposed that Ofcom remove unnecessary regulation that does not allow it to offer parcel tracking for universal service customers.
In 2024, the regulator fined Royal Mail for failing to meet its delivery targets.
(Reporting by Chandini Monnappa in Bengaluru; Editing by Mrigank Dhaniwala)
