Business Daily (Nairobi)
Okuttah Mark
2 April 2008
Postal Corporation of Kenya has tightened its grip on the agencies market, with the signing of an agreement to sell airtime for the leading mobile service provider, Safaricom.
It is the second agency contract the corporation has signed in last few weeks. Last week, the corporation sealed a deal to receive subscriptions for pay television service provider, GTV.
The agreements are critical for the survival of Postal Corporation, whose traditional mail and parcel delivery business has been low since the advent of the Internet and the mobile phone in the local market.
Although there are more than 100,000 outlets selling Safaricom airtime cards, Mr Michael Joseph, the chief executive officer, said the Postal Corporation deal is significant in terms of the number of outlets and the national spread it brings on board.
"Most of the outlets selling airtime usually have stock to last them a day. This exposes us to huge market access problems, should anything occur in the distribution system as was the case with the outbreak of post-election violence," said Mr Joseph. "Posta, a bulk buyer should cushion us from such exposure," he said.
The airtime will be initially sold in 38 post office outlets and will be available in other countrywide branches by the end of the year. Under the agreement, Postal Corporation will benefit by charging a commission for airtime sold.
No figures were available on the commission the company expects, but other outlets get five per cent of the value of airtime sold.
Postal Corporation is managing these agency agreements through an agencies services arm that it started two years ago as part of the restructuring process it has been implementing to boost its revenue base.
So far, the company has signed more 20 such deals with service providers in the telecoms, water, energy and financial services sectors.
Postmaster, General Fred Odhiambo , said the agency services and the corporation's entry into the financial services market through its money transfer product, PostaPay, has enabled the corporation to increase its revenue base from Sh1.5 billion five years ago to Sh3 billion last year.
The company has set a profit target of Sh1 billion in the next five years.
Mr Odhiambo said commissions earned from the agency services alone amounted to Sh4 million per month.
Postal Corporation is also planning to increase its presence in the courier services from the current three per cent to between 35-40 per cent.
The courier market is currently worth Sh3.3 billion. It also plans to increase its Postapay points.
to all its 900 branches country. At the moment the services are only available in the 300 outlets.
Be the first to Write a Comment!
Copyright © 2008 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
