Royal Mail

What was the client issue?

Royal Mail wanted to measure the impact of competition in direct delivery on the financial sustainability of the universal postal service in the UK. It asked us to help it with this, and to provide strategic advice in its interactions with Ofcom on this issue.

How did we help the client solve it?

We developed a robust analytical framework to assess and measure the impact of entry of competitors in the direct delivery market on the financial sustainability of the USO, a core component of which was a probabilistic model capturing the key risks that affect the financial position of USO, as well as incorporating commercial responses that Royal Mail could develop in response to this threat. 

Why was the outcome compelling for the client?

The approach and methodology employed by Oxera was adopted by Ofcom in its guidelines on how to measure the impact of end-to-end competition in the postal sector. Royal Mail also obtained a commitment from Ofcom to undertake a full review of the impact of direct delivery competition before the end of 2015.