Posta adds State services in plan to boost dwindling revenues

Customers at a Posta branch in Kenya.
Photo/FILE Customers at a Posta branch in Kenya. Rental fees and postage rates—both local and international will also go up with individual box rent going up by 70 per cent from Sh1400 to Sh2,000 while corporates will pay Sh6,000 to rent the boxes, up from the current Sh4,200.  

Postal Corporation of Kenya is adopting a new business strategy that will see it offer government services such as processing of driving licences, birth certificates and passports for a fee to boost its dwindling revenues.

The diversification drive is aimed at reducing over-reliance on sending letters and parcels that are facing stiff competition from new technology like e-mails and SMS.

The State firm is targeting county governments that lack certain services such as processing of driving licences, birth certificates and passports issuance.

Consumers of the services will be expected to pay a fee to the postal firm, said Information PS Bitange Ndemo--which is a departure from agency services where providers meet the transaction costs.

“We are trying to revamp this business and the best way is to make it diversify by adopting new technologies, which should enable it compete effectively,” Dr Ndemo told the Business Daily in telephone interview yesterday. He added that the devolved government system and the initiative by the state to make its services available online, provides a good business opportunity to the postal firm that has more than 700 outlets.

The dwindling revenues have seen PCK turn to cost cutting drives, including layoffs, to remain afloat. Recently, the firm was locked in a court battle with its workers’ union after it fired 550 striking staff.
The plan will be step with a recommendation from IBM Corporate Service Corps that indicated the parastatal should take advantage of its wide reach and partner with other government agencies to offer essential services.

Downward trend

The consulting firm was hired to find ways of making the postal corporation competitive in the digital era. Already, the postal firm is acting as an agent of utility firms such as water and electricity providers that pay it a fee for handling their bills.

Communications Commission of Kenya (CCK) data shows that delivery of letters has been on a downward trend with 20.5 million letters sent in the quarter to September compared with 31.6 million in a similar period last year.

About 24.2 million letters were delivered in the three months to June, a pointer to the deterioration of the parastatal’s business that is compounded by the influx of private courier companies such as Roy Parcels, Nation Courier and Akamba Bus Services.
The mobile telephony subscribers sent 1.5 billion short messages in the quarter from last year’s 740 million.

Internet popularity is hinged on the low cost of transaction, safety, and speed where clients are assured of near instant deliveries.

As a result, instant messaging and e-mails have reduced the need for letter writing, denting Posta’s revenues as more Kenyans turn to mobile phone-based platforms and desk top computers to send money and information.