As a court battle looms, SA’s communications regulator is backing the push by the SA Post Office (Sapo) to stop private courier companies from delivering small parcels, a move that could devastate a R20bn industry.
"The Independent Communications Authority of SA’s [Icasa’s] mandate is to implement what the law requires, and we are doing exactly that," spokesperson Paseka Maleka told Business Day on Monday.
If Icasa and the Post Office have their way, consumers and companies that trade over the internet could find themselves deprived of an alternative to a crisis-hit company whose inefficiency has seen it lose customers to the private sector.
"There are exemptions that deal with ‘businesses that do not fall under postal services’. Uber Eats, Mr Delivery, etc are such businesses. Obviously, one cannot expect Sapo to be delivering pizza to a consumer," he said.
Private courier firms have approached the courts to challenge Sapo’s interpretation of the law. Interested parties, including Icasa, are set to file papers in the high court later in May.
Sapo is the latest state-owned enterprise trying to get market protection while squeezing already cash-strapped customers to pay for services. The SABC is pushing to get pay-TV operators such as MultiChoice to collect licence fees on its behalf. Sapo, the bulk of whose 2,400 branches are dysfunctional, has failed to turn a profit for the past decade.
Icasa agrees with Sapo’s interpretation of the Postal Services Act, which says that only a licensed postal services operator may deliver letters, postcards, printed matter, small parcels and other postal items with a mass of up to 1kg. Sapo is the only licensed firm in that category. This could potentially push many firms in the courier services sector out of business, since they are heavily reliant on the delivery of small parcels.
In 2018, Sapo lodged a complaint with Icasa against private courier company PostNet, saying it was providing services it was not legally mandated to provide. In a ruling affecting all private players, the regulator’s complaints and compliance committee ruled in favour of the state-owned company and issued PostNet a notice to stop providing the 1kg-and-under service by March 2020.
The committee argued that Sapo’s monopoly in that segment of the market is intended to strengthen the company’s financial position and, by extension, widen the availability of postal services throughout the country. PostNet approached the high court in Pretoria for an urgent interdict pending the main review application to challenge Icasa’s ruling.
The court granted the interdict, which means private couriers can still provide the delivery service pending the main court challenge, which is yet to be heard.
The SA Express Parcel Association (Saepa), which represents major courier companies such as DHL and RAM, has joined PostNet’s court challenge.
Maleka said Icasa will be opposing the application.
Saepa CEO Garry Marshall said the organisation could not comment on the merits of the case and the possible consequences for the private sector and consumers as the matter is yet to be argued in court.
"It is a matter of record though that we do not agree with Sapo’s interpretation of the Postal Services Act, and we look forward to presenting our arguments in court in due course. We don’t think that a change of law is needed at all. What is required is that the existing law is interpreted correctly, as this does not lead to absurd outcomes and permits the harmonious co-existence of two different services," Marshall said.
Correction: May 4
The story has been updated to remove the statement that the law allowed private couriers to only deliver food items in the 1kg or fewer categories, which was incorrectly attributed to the Icasa spokesperson.
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