Kenya’s postal service needs a major shake-up
Despite more deregulation initiatives in other sectors in Kenya key postal services continue to be provided under the protection of a statutory monopoly by state-owned incumbent Posta Corporation. While significant progress in terms of reform has been made in other telecommunication service sectors, the postal service is still in the old order.
In the telecoms sector, we have been faced with questions on how to create effective competition; in the postal sector, the real issues of the sector are just now emerging. The agenda is clear; to open expansion into the future markets for the postal incumbents,†so as to encourage a competitive structure of the markets, promote innovation and market development; and to secure universal service.
The postal sector needs to be brought at par with the other sectors in the telecom-munication industry. The ongoing deregulation and liberalization in other network-based industries has demonstrated the benefits of competition as a means of enhancing quality, efficiency, innovation and lowering prices to consumers.
The fact remains however that the regulatory scheme is focused on maintenance of a monopoly in the core area of letter service. It should nevertheless not be overlooked that the postal sector comprises of substantial business areas, which should be subjected to competition. Currently the only major part of the sector that is subjected to competition is the express courier service.
Competition can be further enhanced through regulatory interventions now commonly found in other network industries, particularly in structural separation of the natural monopoly service, and the implementation of an access regime.
The resulting increase in competition can be expected to significantly enhance effi-ciency, productivity and innovation in the postal sector, contributing to overall compe-titiveness and economic growth. The elimination of regulatory restrictions on competition does not, however, eliminate competition con-cerns.
A fully liberalised postal sector would almost certainly provide some form of service in all areas of a country.
