Royal Mail plans to increase the prices it charges business customers and the access price competitors pay to use its network for final mile delivery, raising up to £100m.
In addition Postcomm is proposing to deregulate the market further, giving Royal Mail greater freedom to compete in the pre-sorted bulk mail market.
Postcomm has also provisionally given the go-ahead for Royal Mail to increase its general prices on average by 7%, which would allow it to realise up to £280m in additional revenues.
Postcomm is now consulting over the next two months before making a final decision.
It said it regretted that Royal Mail was unable to complete its modernisation programme without making further demands on its customers, but accepted there was a risk to the universal service otherwise.
Nigel Stapleton, chair of Postcomm, said: "There is broad consensus that there is a risk to the Universal Service unless Royal Mail quickly becomes a lot more efficient."
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