Review of postal users’ needs - A consultation document on the reasonable needs of users in relation to the market for the provision of postal services in the United Kingdom

  • Start: 16 October 2012
  • Status: Closed
  • End: 18 December 2012

1.1 In October 2011, the Postal Services Act 2011 ("the Act") gave Ofcom the responsibility and powers to regulate postal services in the UK. Our primary duty under the Act is to carry out our functions in relation to postal services in a way that we consider will secure the provision of a "universal postal service". The universal service is defined by the Act, together with the Universal Postal Service Order and the designated universal service provider conditions imposed on Royal Mail as the designated universal service provider. Key features of the universal service are the delivery and collection of mail everywhere in the UK at affordable and uniform prices, every working day (and on Saturdays for letters).

1.2 The Act requires us to carry out an assessment of the extent to which the postal market is meeting the reasonable needs of users of postal services within eighteen months of our taking responsibility for postal regulation, i.e. by 31 March 2013. This statement is the conclusion of the review we have carried out to meet that requirement.

1.3 We have concluded that the postal market is currently meeting the reasonable needs of users and is highly valued by residential users and businesses across the UK. Therefore, we have decided not to change the scope of the universal service. However, our research also indicates that while users generally are satisfied with the current services available, different users rely on post to varying degrees, and users’ needs and preferences are evolving. For example:

  • Users would like more convenient options for the delivery of parcels. Given the steps Royal Mail is taking in this area and the competitive nature of this part of the market, we think that these consumer benefits are more likely to be delivered through innovation by Royal Mail and other postal operators than through additional regulation; and
  • Some users indicated that there may be less need for next-day delivery (First Class), and others are less reliant on collections and deliveries six days a week, including Saturdays. At the same time however, over half of our research participants indicated that they would continue to use First Class, and nearly half of businesses believe their First Class mail should arrive next day. Contrary to businesses, residential users attributed a high value to deliveries and collections six days a week.

1.4 It is important for Ofcom to continue to understand the needs of users of postal services and how these needs may change in the future. This is an issue which we will keep under review as the postal market develops to meet users’ evolving needs.

Methodology and consultation

1.5 We conducted extensive consumer research to inform our view of users’ needs. The research considered the postal service generally, and several specific aspects of the current universal service, to test whether they remain appropriate. To inform our analysis of whether needs are reasonable, we have considered where possible the costs and benefits of certain aspects of the universal postal service. In October 2012, we published a consultation document setting out the results of our research and our analysis.

1.6 We are grateful to those stakeholders who responded to our initial findings and questions set out in our consultation document.

1.7 The responses to our consultation expressed a range of views on our research, and on the specification of the universal service obligation. Generally, the majority of respondents were supportive of the current service and tended to prefer the status quo, including Royal Mail and some consumer representatives. Some stakeholders were open to change, including Consumer Focus and other postal operators. The views of respondents are summarised in this document, and we explain how we have taken account of these views in reaching our conclusions.


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