Communications minister Solly Malatsi last week gazetted amendments to the Postal Services Act that have effectively removed the Post Office’s monopoly on the delivery of sub-1kg parcels.
The rule allowing the Post Office to hang onto its monopoly had been extended multiple times, with the last extension provided by former communications minister Mondli Gungubele – now deputy to Malatsi – in 2024. Gungubele set an April 2025 deadline for the rule to remain effective. A month prior to its expiration, in March, Malatsi issued a discussion paper calling for industry stakeholders to weigh in on the matter.
The formally legislated monopoly has long been bemoaned and widely ignored by the e-commerce industry. South Africa’s largest e-commerce outfit, Takealot Group, has been vocal about the fact it believes e-commerce companies are faster and more efficient than the Post Office and therefore better placed to deliver parcels, whatever the size. As far back as 2021, then-Takealot CEO Kim Reid told TechCentral that the Post Office’s fixation on a regulatory matter while its “house was not in order” showed a misguided focus.
“It is slightly disingenuous for an organisation that cannot deliver the post” to want to enforce its monopoly, Reid told TechCentral at the time. “It’s beyond me.”
The Post Office has not fared well since then. Following a high court order placing the embattled state-owned entity into provisional liquidation in February 2023, the Post Office was placed into business rescue – a form of bankruptcy protection – in July that same year.
The process led to mass retrenchments, with about 4 800 jobs shed by the end of 2024. The number of branches was also reduced. Creditors agreed to a settlement of 12c on the rand, allowing the company to wipe about R7-billion off its books. But its reliance on government bailouts has been its Achilles’ heel, with business rescue practitioners Anoosh Rooplal and Juanito Damons asserting that the entity requires another R3.8-billion to survive – this is on top of the approximately R10-billion the state has spent in bailouts over the last 10 years.
No comment
Two-and-a-half years later, the business rescue process is still under way, with no clear end in sight. The rescue practitioners’ previously urged sector regulator Icasa to fine entities in breach of the sub-1kg parcel regulation. Asked to comment about Malatsi’s decision to overturn the monopoly, a spokeswoman for the rescue practitioners declined to comment.
Malatsi has argued that private sector partnerships are key to the company’s survival. In November, his department issued a request for information, inviting proposals for joint ventures, revenue-sharing agreements and build-operate-transfer models from private entities interested in partnering with the company.
Read: Government seeks private sector partners to rebuild broken Post Office
In a statement following publication of the gazette, chair of parliament’s portfolio committee on communications Khusela Diko cautioned that the move by Malatsi posed a “direct threat” to the Post Office’s sustainability.
The Post Office “remains a critical public service institution, particularly for rural and underserved communities who depend on affordable postal and parcel services. The implications of this termination for its turnaround strategy and its universal service obligations require urgent clarity”, she said.
Commenting on the changes on Thursday, Bob Group CEO Andy Higgins said the e-commerce industry has already been delivering parcels of the regulated types and the move by Malatsi merely aligns legislation with the reality on the ground.
“Minister Malatsi’s decision to end the Post Office’s legal monopoly on sub-1kg parcel deliveries is welcome news for the courier industry and provides much-needed certainty after years of uncertainty. The monopoly was never enforceable to begin with, as private couriers have long delivered small parcels regardless of the law,” said Higgins. – © 2025 NewsCentral Media
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