Regulator Ofcom rejects Royal Mail concerns
Royal Mail has been dealt a fresh blow after regulator Ofcom said it would not impose new conditions on the firm's direct-delivery competitors.
Ofcom added that the universal postal service - where letters are posted anywhere in the country for the same price - is not under threat because of the impact of competition.
However, it said it will initiate a broader review of factors affecting Royal Mail's ability to deliver the universal service and will also consider the company's efficiency and its parcel delivery performance.
The regulator believes that competition from rivals such as Whistl- formerly known as TNT Post - will make the service more efficient.
Last week Royal Mail chief executive Moya Greene told MPs that its universal service obligation (USO) costs it £7.2bn and is being threatened by rivals "cherry-picking" lucrative urban routes and shunning loss-making rural areas.
Rivals Whistl and UK Mail deny they are cherry-picking work, or that they threaten the universal service.