STAATSKOERANT, 24 JANUARIE 2014
No. 37261
4.3 Overview of postal services and products
According to the South African Standard Industrial Classification (SIC) system an industry is
made up of enterprises engaged in the same or similar kinds of economic activity. In terms
of this classification, postal activities include the following:
pick-up, sorting, transport and delivery (domestic or international) of letter-post and
mail parcels and packages by postal services operating under universal service
obligation.
collection of letter-mail and parcels from public letter boxes or from post offices, and
distribution and delivery of mail and parcels
Courier activities on the other hand include:
pick-up, sorting, transport and delivery (domestic or international) of letter-post and
mail parcels and packages by firms not operating under a universal service obligation
distribution and delivery of mail and parcels
The Postal Services Act defines a postal service as including the following:
the provision of a reserved postal service or an unreserved postal service as
contemplated in Schedule 1 and Schedule 2 of the Act, respectively.
the issuing of postage stamps
the provision of roadside collection and address boxes
As part of its extended services SAPO also provides financial services through the provision
of a savings bank. This has been provided through the Postbank, and has allowed SAPO to
further diversify its income stream away from mail revenue.
4.4 Market structure and competition
The following section analyses the various ways in which the postal services sector can be
segmented.
4.4.1
Reserved and unreserved market segments
The unreserved market includes the provision of all courier services together with any postal
service that falls outside of the reserved area. According to ICASA's database, there were
just under 300 courier operators registered in 2012. While there may be several hundred
postal and courier operators in South Africa, the sector is dominated by approximately 20
firms, accounting for 98% of the industry's revenue. The five largest firms account for 78%
of the total revenue in the sector, indicating a high level of concentration.
SAPO's exclusivity renders it the most dominant operator in the sector, accounting for about
60% of market share in terms of revenues from postal and courier services in 2012.
Despite the legislative delineation of the market into reserved and unreserved segments,
there are unlicensed operators encroaching on the reserved services market. Despite being
illegal, this practice amounts to unfair competition to SAPO,given that operators in the
unreserved market segment do not have universal service obligations. For this reason, the
capacity of the Regulator to monitor compliance in the sector cannot be over-emphasised.
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