Competition in the postal services sector and the Universal Service Obligation - Business, Innovation and Skills Contents

6  Conclusion

86. The postal sector is working within a constantly changing market, with declining volumes of letters, and a burgeoning of internet shopping, with the accompanying sharp increase in parcel volume. Royal Mail claims that Whistl's end-to-end competition is putting the Universal Service at risk, while Whistl claims that Royal Mail has an unfair advantage by its VAT exemption for access services. Neither claim has been proven, but they are illustrative of the current competitive climate in which these private companies are working. As Nick Wells, the CEO of Whistl, told us, "If you want competition, this is not a stroll in the park".[125]

87. While we would not want to stifle competition, we are adamant that the principle of the Universal Service should be upheld. We are not persuaded that the Universal Service is a burden for Royal Mail, but is an obligation that brings revenue and status to the organisation. Ofcom must continue to monitor and must be able to respond quickly if the Universal Service is under threat.

125   Q8 Back

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© Parliamentary copyright 2015
Prepared 12 March 2015