Question

To ask Her Majesty’s Government what is their calculation of the percentage of United Kingdom addressees needed to be reached by end-to-end postal delivery companies other than Royal Mail before there is a threat to the financial sustainability of the universal postal service.

Ofcom as the regulator for postal services has the primary statutory duty of protecting the universal service and the regulatory powers to intervene if the universal service is ever at risk.b

Ofcom has set out the circumstances under which it would intervene to protect the universal service from any serious threat from competition in their publication: “Final Guidance on Ofcom’s approach to assessing the impact on the universal service”.

Ofcom’s assessment would consider the financial sustainability of the universal postal service and the need for the universal service provider to be able to earn a reasonable commercial rate of return in connection with the provision of the universal service.

The percentage of addresses covered by end-to-end competitors to Royal Mail would clearly be a factor that Ofcom would consider, but as a part of a wider range of factors. Ofcom has therefore not set a threshold of end-to-end delivery coverage by alternative postal operators to determine a threat to the Universal Service. At the present time, end-to-end competition accounts for less than 0.5% of letter volumes in the United Kingdom.