Posta’s fortunes dwindle as popularity of mobile phone grows

Postal Corporation of Kenya’s fortunes dipped further in the three months to September as increased Internet use and widespread use of mobile phones reduce the need to post letters.

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 PCK’s business that is compounded by the influx of private courier firms such as Roy Parcels, Nation Media Group, and Akamba Bus Services.

“The decline can be attributed to the stiff competition the sector faces from other ICT service providers with efficient and less expensive means of communication,” said CCK in the export.

For instance, during the period under review, SMS increased significantly, an indication that the service could have consumed some of the traffic on local letters sent, added CCK.

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 PCK’s revenues as more Kenyans turn to mobile phone-based platforms and desk top computers to send money and information.
Internet penetration in the country stood at 36.3 per cent of the population in September, from last year’s 22.1 per cent.

The dwindling revenues have seen PCK turn to cost cutting drives, including layoffs, to remain afloat.

Recently, the firm was rocked in a court battle with its workers’ union after it fired 550 striking staff.
The employees were demanding a 30 per cent pay rise but the firm offered a five per cent rise.

On the international front, the postal firm saw its fortunes reverse with 2.7 million deliveries in the quarter ended September compared to 1.3 million letters in the same period last year.