Shut down Post Office, Icasa urged
A GROUP of fed-up small publishers will approach the Independent Communications Authority of SA (Icasa) next week to demand that the regulator cancel the SA Post Office’s operating licence.
This is the culmination of weeks of frustration for small publishers, who rely on the Post Office to deliver magazines and newsletters, but who have watched helplessly as the pile of mail grows in sorting rooms due to a three-month postal strike.
Initially, the publishers turned to couriers to distribute their specialist publications.
But Rory Macnamara, from Interact Media Defined, said publishers had now had enough of the Post Office, after customers cancelled subscriptions and advertisers lost confidence.
“A lot of us are very distressed. Icasa is the first step in the process to ultimately consider legal action We would expect that ... they have a good case for withdrawing the licence,” he said.
Macnamara said about 400 specialist publishers used the Post Office to send about 200 000 publications every month. This brought in nearly R25-million a year for the Post Office — money it is now missing out on.
On Friday, the crisis deepened as the entire board of the Post Office resigned to enable an “intervention team” under former Rand Water CEO Dr Simo Lushaba to take charge.
Telecommunications and Postal Services Minister Siyabonga Cwele said he had accepted the resignations of the directors who had quit “of their own volition”. Two other directors, Nobuhle Mthethwa and Richard Sishuba, bailed out two weeks ago.
Cwele said the strike had a devastating effect on people who relied on the Post Office to deliver their chronic medication.
But there is still no end in sight after the utility rejected the Communications Workers Union’s revised pay demand of 7.5%, which it toned down from an initial 15% demand.
In a letter dated November 4, Post Office acting CEO Mlu Mathonsi said this was because of financial constraints. “The reality of the situation is the SA Post Office is in the worst position it has ever been,” he said.
On Friday, Cwele appealed to union leaders to postpone their demands “to give the Post Office a chance to generate revenues”.
There are some good signs, including at Witspos south of Johannesburg, where staff are now working overnight in shifts, according to the Post Office’s Facebook page. But there are still backlogs at the Johannesburg International Mail Centre as airmail continues to pile up.
Anton Marsh, MD of Now Media, which publishes trade journals such as Freight & Trading Weekly and Travel News Weekly, said he went to the Post Office mail rooms to retrieve many of his publications. Marsh then sent them to customers using a courier, which cost five to six times more.
“We’ve watched the service deteriorate over the last three years, and now we’re suddenly hit by this crisis,” Marsh said.
“Clients are asking whether they should be renewing their contracts. What do I say?”
Juan del Valle, marketing director for Uniprint, said one of his clients, Telkom, had dropped from sending 10 million statements to 2 million in five years.
At the same time, banks cut the items they send by post by up to 25% and retailers by 20%.
For courier companies, Christmas has come early.
Stuart Cameron, branch manager for Courier IT, said he had noticed a “rather huge influx” of parcel delivery requirements.
We’ve watched the service deteriorate over the last three years
Generally, in the months before Christmas, volumes rise 20%. But Cameron said the Post Office’s meltdown had boosted his sales — with much of the business coming from online retailers. “We’ve definitely seen online retailers suffer. We’ve tried to accommodate them,” he said.
Neren Rau, CEO of the South African Chamber of Commerce and Industry, said small businesses were most likely to suffer.
“[The strike] makes it very difficult to make business judgment decision and in some cases legal decisions. The enforcement of payments and transacting is undermined,” he said.
The mail business constitutes 67% of the Post Office revenue, but volume declined over the past six years as consumers migrated. The Post Office has also been crippled by its licence conditions, which require it to service rural and underserviced areas at a R400-million loss.
Cwele’s intervention team will be tasked with stemming the losses and ending the strike.
“The Post Office is not broke — it had cash-flow problems,” Cwele said. ECONOMISTS and investors shrugged off Moody’s rating downgrade of South Africa on Thursday, describing it as “more good news than bad news”.
While SA’s long-term foreign currency rating was cut one notch to Baa2, Econometrix chief economist Azar Jammine said the fact that the country was put on a “stable outlook” meant no more cuts from Moody’s were likely any time soon.
“They’re still holding us two notches above the threshold that distinguishes investment grade and speculative grade. That means we don’t have to worry about a massive outflow of capital or that foreigners might stop buying our bonds.”