Royal Mail share prices tanked this morning after Ofcom revealed the scope of its review of regulation for the business, including whether any price controls should be imposed on the company given the lessening of competition in the postal services market.
Ofcom said there had been a number of changes since the regulatory framework was set in 2012, not least the “significant improvement in the financial position of the universal service” and “an intensification in the level of competition and innovation in parcels service”.
“The review will incorporate our existing work to assess Royal Mail’s efficiency, consider its position within the parcels sector, and assess the company’s potential ability to set wholesale prices in a way that might harm competition,” it said.
“In addition, the review will address the implications of Whistl’s withdrawal, which represents a significant change in the potential level of competition for end-to-end letter delivery.
The FTSE 100 was down 0.2% at 6,783.20 this morning, led by big fallers including M&S and GlaxoSmithKline.