Analysts said that proposals for Royal Mail to deliver second-class letters less frequently by regulator Ofcom today are only "partially" what the company requested.
A new consultation was launched today with proposals that are "at least partially consistent with what Royal Mail has requested", said analysts at broker Peel Hunt.
But they added that the regulator continues to state that Royal Mail, which is part of International Distributions Services PLC (LSE:IDS), must improve its service levels and become more efficient, with no mention of softening the delivery targets as Royal Mail had requested.
"The timeframe for change is also much longer than Royal Mail had hoped for, and may not conclude until after the decision on regulatory approval", the analysts added, and there is also the timetable for the closure of IDS's agreed takeover offer from Czech group EP to think of.
As such, today's developments are "broadly positive" for the group, the analysts said, and should yield "substantial savings, although potentially less than the £300 million outlined by Royal Mail, because of the need to improve service reliability and speed".
Ofcom warned Royal Mail about its service levels, having recently missed delivery targets again, for which a separate investigation is underway.