Price control
The price control is a regulatory tool designed to protect the customer when there is not enough competition in the marketplace. Royal Mail’s price control ensures it cannot raise certain prices or let the quality of service of specified services fall, within limits. It also encourages Royal Mail to be more efficient, though at the same time is designed to ensure it can afford to deliver the universal service – a requirement of its licence.
Following discussions with the interested parties about the form of Royal Mail’s price control beyond March 2010, we decided to continue the current price control arrangements for a further year to March 2011.
Postcomm’s Commissioners consider this approach will best secure their statutory duties to ensure the provision of the universal service, protect the interests of customers and to promote efficiency and competition.
This has been informed by business plans submitted to Postcomm and assurances received from Royal Mail.
In December 2009, we made two changes to the price control from April 2010 to March 2011 (Tariff 2010). The changes were designed to achieve the following:
- Limit the impact of negative RPI on Royal Mail (as the formula used in Royal Mail’s price control is based on RPI)
- Make the formula for limiting individual product price rises (sub-caps) more effective.
The proposals consultation and our decision in this matter are available at the price control 2010 page.
We intend to consult on more wide reaching changes to the price control in Spring 2010.
A full list of documents relating to the current price control - including those relating to the 'interim review' of the price control - is available at the price control 2006-2010 consultation page.
