UK communications regulator Ofcom has launched an investigation into Royal Mail's delivery performance, citing 'unacceptable' service levels that fall well below mandated targets. The postal service delivered just 75.7 per cent of first-class mail the next working day in the year to March, significantly short of the 93 per cent target. Second-class performance also lagged, reaching only 90.2 per cent within three working days against a 98.5 per cent goal.

The probe comes a year after Czech billionaire Daniel Křetínský acquired the former state-owned group through his EP Group. Royal Mail has committed £500mn over five years to address these failures, implementing changes like moving second-class deliveries to alternate weekdays and eliminating Saturday delivery. However, Ofcom noted it took nearly a year to begin implementing reforms, during which service levels remained subpar.

Regulators will examine whether Royal Mail prioritized parcels over letters and assess any exceptional circumstances beyond the company's control. The firm previously faced £37mn in fines for service failures. Ian Strawhorne of Ofcom expressed frustration over customers missing important mail due to ongoing performance issues.

Royal Mail warned that any financial penalties would reduce funding available for service improvements. The company projects it can achieve 85 per cent first-class next-day delivery within nine months, reaching the 90 per cent target by next year. This regulatory scrutiny threatens the turnaround plan for a business still adjusting to private ownership.