The Communications Authority has reviewed postal and courier regulations in a move likely to increase Postal Corporation of Kenya’s (PCK) clout in the industry.
Last week, CA announced it had adopted a new market structure and license fees for postal and courier service providers.
The new regulations came into effect on July 1. They require new postal and courier service providers applying for licences to adhere to conditions such as use of PCK’s vast national networks to interconnect to areas the couriers have no presence.
“The regulations have seen significant reduction of fees and licence categories principally to promote market entry and market environment. More players are expected to enter the market as a result,” said CA director general Francis Wangusi in a statement last week.
He added that the guidelines were adopted after serious consultations. Changes expected include improvement of quality of mail and physical delivery, which are key to boosting e-commerce.
The Postal Corporation experienced a slow death with the introduction of technology firms and mobile gadgets that eased communication. PCK has tried to spruce up its image as it fights for space in a market dominated by tech firms.
As new companies enter the sector, they will be required to take advantage of PCK’s premises countywide as receiver points for their deliveries at a fee.
The arrangement will also be advantageous to new entrants since they will not need to set up centres countrywide to deploy services.
The changes come after latest CA statistics shed a gloomy picture of the postal and courier industry.
The data showed that the number of letters sent locally declined marginally by 0.3 per cent to 16.73 million during the quarter (January to March 2015), down from 16.78 million letters sent during the preceding quarter.
“Similarly, courier items sent declined by 10.1 per cent to stand at 344,222 during the quarter, down from 382,925 items sent during the previous quarter,” the report says.
The number of international incoming letters also dipped — although outgoing letters increased marginally by 1 per cent.
But the stage is now set for change, with PCK becoming the centre of all other courier and postal services in Kenya. Already, Jumia, a thriving online firm in Kenya, has partnered with PCK to use its parcel delivery points in the counties.
The arrangement will see Posta tap into Jumia’s online international and local markets which serve Morocco, Egypt, Kenya, Ivory Coast, Uganda and Nigeria. Jumia boasts double digit growth, month-over-month, which will be beneficial to PCK.
Apart from technology firms, bus companies like Easy Coach, Transline, Guardian and big firms like Nation Courier and DHL are operating cargo and parcel delivery services, a market PCK had a monopoly in.
Posta will now be guaranteed a piece of revenue from all firms in the sector. Firms that do not comply will have their licences revoked.
What took the regulator back to the drawing board on PCK’s status was the abrupt closure of 56 outlets, to stand at 634, down from 690 in 2013. Posta gave up its monopoly and market stature, citing business failure and increased competition.
Entry of Huduma centres in 2013 was the government’s way of trying to increase competition in postal and courier services through attractive and fast services to the public.
The Huduma Centre on Kenyatta Avenue, Nairobi, receives about 1,200 letters and parcels a day. The figure rises to 2,500 on seasonal holidays and immediately before candidates sit national exams. But this has not been instrumental in increasing Posta’s revenue.
The old Posta was bogged down by images of long queues as customers waited to collect money orders, letters or to complain about lost parcels. The current face of Posta offices now gleams with computers and photography studios.