Royal Mail Fury At Ofcom Over Whistl Probe

The fractious relationship between Royal Mail and its regulator risks deteriorating further following a secret protest about Ofcom's oversight of a rival's complaint.

Sky News has learnt that Royal Mail has objected to a procedural issue relating to Ofcom's long-running investigation of a complaint by Whistl, which alleged that the privatised postal operator was planning predatory and anti-competitive pricing changes.

Royal Mail's objection is being examined by an Ofcom employee who is expected to adjudicate in the coming weeks, according to people close to the situation.

The adjudication is likely to be published on the regulator's website, although the implications of a ruling in favour of Royal Mail were unclear on Monday.

An Ofcom spokesperson said: “Royal Mail has raised an issue with Ofcom’s Procedural Officer.

"This is currently being considered and a decision will be published in due course.”

The row is the latest example of an increasingly tense relationship between the former state monopoly and the communications watchdog.

Ofcom launched an inquiry into Whistl's complaint about Royal Mail's access pricing - which relates to the cost it imposes on other delivery firms for accessing its network - nearly 18 months ago.

Royal Mail did not impose the planned pricing changes, and is privately unhappy that the probe has taken so long to conclude, with a judgement expected later this year.

Whistl executives have also expressed frustration after announcing in May that they would suspend door-to-door letter delivery services after LDC, a private equity group, walked away from a deal to buy a controlling stake in the company.

Last month, Whistl said the service was no longer viable and would not continue, leaving Royal Mail without a direct competitor in the market for end-to-end letter delivery.

News of Royal Mail's latest conflict with Ofcom comes just days after it published a discussion paper setting out the issues it will consider as part of a "fundamental review" of the company's regulation.

Royal Mail shares slipped on Friday on the publication, which included a reference to Ofcom's concern "that Royal Mail may have weakened incentives to deliver efficiency improvements and an increased ability to charge excessive prices".

Royal Mail, which declined to comment, is due to report a trading update on Tuesday ahead of its annual meeting on Thursday.

People close to the company said it did not anticipate a significant investor vote against its remuneration report, with the Government expected to vote its 14% stake in support of all motions tabled at the AGM.

Peter Long, the joint head of TUI, the travel company, is due to replace Donald Brydon as Royal Mail's chairman later this year.

Ministers have signalled that they want to sell the Government's remaining shareholding in the near term.