Posta raises mail charges in race to grow revenue

The Postal Corporation of Kenya (PCK) will increase mail charges for the second time in two years, in the race to boost revenues as increased Internet connectivity and widespread use of mobile phones reduce demand for its services.

The company says the higher charges for mails will help grow revenues 39 per to Sh4.5 billion over the next 12 months.

In February last year, PCK raised the charges for most of its mail services by between Sh5 and Sh15 while raising leasing fees postal box by up to Sh1,800. This saw its revenues rise to Sh3.5 billion in the year ended June 2013 from Sh3.2 billion the year before.

Post master-general Enock Kinara said the increment is inevitable if the firm is to thrive and remain competitive.

“We want to grow our revenue and be self-sustaining. We don’t want to go to the Treasury to look for cash,” Dr Kinara said.

“One strategy of achieving this will be to change our model to be profit-centric, which means we have to review our pricing upwards to bring them close to the market rates.”

The corporation has drawn a three-year strategic plan to grow its revenue by 39 per cent annually from last year’s Sh3.5 billion to Sh9 billion by 2017.

The fresh review of postal services comes on the back of data from Communications Commission of Kenya indicating that delivery of letters has fallen, with only 17.3 million sent in the quarter to December compared to 19.7 million in the same period a year earlier.

International outgoing letters dropped to 1.9 million from 2.2 million, while incoming letters increased by 138 per cent to 191,612.

Increasing Internet use is hinged on the low cost of transactions, safety, and speed.

READ: Internet use now eats into Posta Kenya

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