Royal Mail can't deliver to everyone
Even though the Royal Mail said that they were looking at doing a Sunday service, they're now saying that it is financially impossible for them to fulfil their legal obligation to deliver mail across the whole country, six days a week.
The say that competition from companies like Whistl (that's TNT to you) is hitting them so hard that they won't be able to provide the universal service. The uniform tariff is what they're blaming, which means that prices are going to be changed. That inevitably means a more expensive service for us.
While talking to a parliamentary investigation into competition in the delivery sector, Royal Mail Chief Exec Moya Greene said: "If you allow cherry picking in the urban areas you undermine the economics. It siphons off very quickly a lot of revenue - more revenue than can be offset by even very vigorous efficiency measures and it makes the universal service unfinanceable and uneconomic."
Whistl CEO Nick Wells, who just happened to be sitting beside Greene, said: "As a start-up business we cannot cover every household in the UK. We are going to dense urban areas... it's the only way you can develop effective end-to-end competition."
It's no joke. Royal Mail have previously said that Whistl's expansion plans could cost them more than £200 million in revenues by 2017. The Royal Mail want Ofcom to hurry themselves up and bring forward a review planned to take place next year which will look at the impact of competition on the universal service, because they're worried that their rivals will be bedded-in, in the profitable areas, before an inquiry has taken place.
Ofcom said, basically, 'we'll think about it'.