Feb 21 Britain's Office of Communications
(Ofcom) is investigating a complaint by the country's
second-largest postal firm, TNT Post UK, against price increases
planned by Royal Mail Plc for its wholesale mail
Royal Mail said in January that it would increase tariffs on
the contracts, used by 31 of its biggest wholesale customers,
because of a decline in letter volumes. ()
TNT Post, a unit of Dutch mail group PostNL,
collects and sorts mail in certain parts of Britain before
handing it over to Royal Mail for delivery through an agreement
known as an Access contract.
"Royal Mail believes TNT Post UK's complaint is unfounded,"
the recently privatised company said in a statement, adding that
it would cooperate fully with the regulator's investigation.
The price rises of between 0.3 percent and 1.0 percent above
the inflation rate are set to go into effect from March 31.
Royal Mail said on Friday the increases were in keeping with
Ofcom's guidelines from March 2013 stipulating that Royal Mail
could amend the pricing of Access contracts to ensure they
reflected market costs.
A Post NL spokesman confirmed that the complaint had been
made, but declined to provide details.
The contracts account for about half of the UK's
inland-addressed mail and more than 70 percent of business mail,
according to Royal Mail's website.
In April 2012, TNT Post began to sort and deliver mail in
Manchester and some parts of London without using Royal Mail's
Royal Mail, which traces its origins back to 1516, says such
competition could threaten its ability to sustain a
six-days-a-week universal service.
TNT Post, it says, could target only the most profitable
parts of the market and ignore the rest.
News of the Ofcom investigation comes after TNT Post said on
Wednesday that it would double its London workforce to 2,000
this year, further challenging Royal Mail's market dominance.