19 February 2010 CASE STUDY:SA POST OFFICE Pushing the envelope By Thebe Mabanga

The Post Office has benefited from diminished parliamentary scrutiny over the past two years as the spotlight shifted to the crisis at the SABC. It has used that period to try to stabilise itself after a few years of management and governance drama. In May 2007, former communications minister, the late Ivy Matsepe-Casaburri, fired CEO Khutso Mampeule for failing to provide the board with accurate information on the Post Office and exposing it to nearly R1bn in claims. Mampeule was replaced by Motshoanetsi Lefoka in November 2007. Communications portfolio committee chairman Ismail Vadi is now satisfied with the general governance and financial stability, but his visits to large post offices reveal serious service flaws. The bulk of the Post Office's revenue, about 70%, still comes from delivering account statements and parcels to people in remote areas. But there are changes coming. New legislation is set to establish Postbank as a wholly owned subsidiary of the Post Office with its own fund raising capabilities. It will also push Postbank into lending to the lower end of the market, instead of just savings. Postbank has been a key player alongside the big four banks in helping to popularise Mzan si accounts. But it is likely to find this segment of the market difficult and costly to service. It will also find more established players like African Bank already dominating that space. The biggest challenge the Post Office faces is to achieve aggressive growth in areas other than postal services. A fact Mampeule recognised and probably sought to rectify too hastily was that the Post Office faces stiff competition in almost everything it does, from courier and money transfer services to retail products and Postbank. In 2008/2009, the Post Office extended services to 1,6m new addresses. But it faced a R10m penalty from Icasa for failure to meet earlier targets. The penalty has since been withdrawn.