Royal Mail statement on Ofcom announcements

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Royal Mail (RMG.L) welcomes Ofcom’s undertaking to intervene swiftly to safeguard the Universal Service where appropriate. However, Royal Mail is disappointed that Ofcom does not share the company’s view on the threat that unfettered direct delivery poses to the future sustainability of the Universal Service.

The company will play its full part in Ofcom’s broader review of Royal Mail’s ability to deliver the Universal Service, including efficiency and parcels delivery. Royal Mail will also provide a detailed response to the consultation Ofcom has announced today concerning pricing of Access Mail. As part of its submission, the company will highlight that commercial freedom, such as flexibility in setting zonal Access prices, has previously been recognised by Ofcom as a means by which Royal Mail can mitigate the impact of direct delivery.

Royal Mail welcomes competition and operates in the most liberalised postal market in the EU. No other EU country has the combination of significant mandated Access and direct delivery. In addition, theongoing decline in letter volumes means that the incentives on Royal Mail to reduce costs are already strong. Royal Mail’s efficiency measures mean that more than 50,000 colleagues have left the company since 2003 and at least 3,000 people are expected to leave the business this financial year.

ENDS

For further information please contact:
Media Relations
Candice Macdonald
Phone: 07436 267324
Email: candice.macdonald@royalmail.com

Investor Relations
Phone: 020 7449 8297
Email: investorrelations@royalmail.com
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