Ofcom decided to remove price control on the vast majority of Royal Mail’s products and services. Following the implementation of the new framework on 31 March 2012, the proportion of Royal Mail revenues under direct price regulation has been reduced to less than 10%.
Ofcom have decided to retain a price cap on a number of “safeguard” products. Stamped Second Class letters, Large letters and Parcels up to 2kg will continue to be subject to a regulatory safeguard cap. The safeguard cap will be in place for 7 years and increase in line with inflation, measured by CPI.
Historically, the majority of Royal Mail’s products and services were subject to price control. Price caps were set by our regulator, Postcomm, under a series of price control mechanisms in place from 2001 - 2011. More than 80% of our revenue was under direct price control. Over recent years there had been growing consensus that traditional price control has failed to secure the financial viability of the universal service.
You can find historical information and documents relating to the previous price-control framework below:
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Accent and RAND Europe undertook research, which examined customers' willingness to pay for different levels of quality of service for ten key Royal Mail products. The following document sets out the results of this research.
In September 2004 Postcomm released their 'Consultation on Principles' document for Royal Mail's 2006 Price and Service Quality Review. Postcomm were looking for stakeholders' views on the document. Our response was published in December 2004 and is available from the links below.
Our principal responses to Postcomm's public consultations about our 2003 Price Control Review are provided below.
Royal Mail's response to Postcomm's November 2001 consultation document - 15 February 2002Price Control Review - Consultation Document
2003 Price Control Review: Supporting Papers
The following six papers were prepared in support of our original price control. They were submitted formally to Postcomm on 18 July 2002.
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