Big fight to keep a state-owned monopoly alive in South Africa
The South African Post Office’s (SAPO) licence to provide reserved postal services in the country has expired, and a new review process is being developed to extend it.
According to the Department of Communication and Digital Technology (DCDT), the SAPO was granted a 25-year reserved postal service licence by the then-Department of Communications in 2001.
The licence was granted under the previous Postal Regulator—a new branch in the department at the time—giving the state-owned group exclusive rights to execute specific services.
Under the licence, the SAPO had an effective monopoly on:
- Delivering all letters, postcards, printed matter, small parcels and other postal articles weighing up to 1 kilogram;
- Delivering the same as the above, if it fits into a rectangular box (458mm long x 324mm wide and 100mm thick) or cylinder (458mm long, 100mm thick, up to 1kg).
- Issuing postage stamps
- Provisioning roadside collection and address boxes.
However, in 2006, the functions of the Postal Regulator were transferred to the Independent Communications Authority of South Africa (ICASA).
The licence was then aligned with the ICASA Act in 2008 and, in 2012, amended to align quality-of-service performance targets.
The DCDT noted that the licence expired on 31 March 2025—but the Post Office applied to renew it a day before the final date. SAPO wants the licence renewed for a further 25 years.
This would ensure uninterrupted service delivery to the entire country, including the communities that fall within SAPO’s Universal Service Obligations.
Unfortunately, ICASA noted that “there is currently no legislated process on the envisioned renewal”. As such, the authority is now developing a renewal process.
It has opened the process outlined below for public comment. Stakeholders have 30 days to make submissions.
The process is envisioned as follows:
- Consult with SAPO
- Publish draft licence terms and conditions
- Public hearings
- Publication of the Authority’s Decision
All written comments must be directed to the Licensing Department at:
- Block B, 350 Witch–Hazel Avenue, Eco Point Office Park, Eco Park, Centurion
- Private Bag X10, Highveld Park, 0169
- By e-mail: [email protected]
Fight over the Post Office’s monopoly
Notably, DCDT Minister Solly Malatsi made a significant change to the SAPO’s reserved services in 2025.
The minister gazetted a directive in December 2025 allowing the SAPO to continue providing reserved postal services for one more year.
However, the same directive also removed exclusivity over the delivery of “small parcels” from the services.
The Post Office has long held a contentious exclusivity licence to deliver small packages weighing under 1kg nationwide.
Private-sector stakeholders in the logistics sector, such as private postal and courier services, have strongly opposed it.
Because of the SAPO’s poor service levels and financial troubles, the exclusivity has never been enforced, allowing private courier services to thrive in the country. However, the monopoly still stands in law.
The removal of this exclusive right under the licence has become a strong point of contention, particularly in the context of the SAPO’s deep financial problems.
The Post Office’s business rescue practitioners (BRPs) have insisted that the exclusivity over parcel deliveries under 1kg remains in place, pending ICASA’s ratification of the directive.
The BRPs warned that allowing the exclusivity to be withdrawn would negatively affect the SAPO’s future postal and courier operations and its ability to turn its financial crisis around.
“The legislative exclusivity was modelled into the turnaround strategy document for SAPO. The loss of this exclusivity negatively impacts the projected revenues,” they said.
“This effectively means the Post Office’s break-even profit/loss position will take much longer to achieve in future, assuming that these revenue types can be replaced by other types of revenue.”
However, even with the exclusivity in place, the Post Office still needs a R3.8 billion taxpayer bailout to even get out of business rescue and back into stable operations.
Without it, the entity risks shutting down.
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