The Post Office wants to take exclusive control over a R25 billion sector in South Africa

The South African Post Office (SAPO) wants its exclusive licence to deliver small packages in the country reinstated, warning of significant risks to its business if it is not granted.

This was contained in the state-owned postal company’s annual report for 2025/26, where it flagged the loss of this exclusivity as a material risk.

SAPO has held an exclusive right to deliver small packages under 1kg since 2001 through a reserved services licence.

The licence, which lasted for 25 years, expired in March 2025. The Post Office reapplied for the licence in March 2026, and it is currently being processed.

However, even if it is granted, the terms of the licence have been changed, with the Department of Communication and Digital Technology (DCDT) effectively ending the monopoly on small-parcel delivery in December 2025.

At the time, DCDT Minister Solly Malatsi gazetted a notice amending Schedule 1 of the Postal Services Act, removing the reference to “small parcels”.

Schedule 1 of the Act refers to reserved postal services that are exclusively the mandate of the Post Office.

Originally, these services included “all letters, postcards, printed matter, small parcels and other postal articles subject to the mass or size limitations set”.

This was changed to remove “small parcels” from the services.

While the change has been gazetted, the Independent Communications Authority of South Africa (ICASA) still has to ratify it.

Malatsi noted in July that this had not yet been done—as such, the SAPO exclusivity on small parcels still holds—for now—and it’s something the state company doesn’t want to lose.

SAPO said Malatsi’s directive to remove sub-1kg parcels from its exclusive services was a “material development” that would eliminate a revenue source incorporated into its business rescue plan.

According to SAPO’s vision for its business, published around mid-2025, it sees its courier and parcel services growing from a R38 million contributor to a R1.4 billion revenue-spinner by 2029.

However, to accomplish this, it needs to retain exclusivity of these deliveries.

Without exclusivity, it will be forced to compete with the entrenched, highly efficient private sector.

Private couriers do the job better

Despite having exclusive rights to these deliveries for decades, the Post Office’s management and operational failures meant it could never realise these services.

SAPO was forced into business rescue in 2023 following years of losses due to poor management and widespread operational failures.

Leading up to business rescue, the group was placed under provisional liquidation due to severe financial distress, insolvency, and inability to pay its debts.

While SAPO has still not officially exited business rescue, it has applied to do so.

Over the past three years, it has managed to turn the business around—but at a steep cost.

To prevent liquidation, the Post Office had to permanently shutter 366 branches and retrench over 4,300 workers.

Creditors had to take a significant haircut on money owed, receiving only 12 cents on the rand and writing off 88% of debts.

In the void created by its inefficiencies over the years, private courier and delivery companies thrived, creating a sector estimated at R25 billion in value.

These companies include direct competitors to SAPO, such as Postnet, as well as over 100 courier companies represented by the SA Express Parcel Association.

In more recent years, courier services launched by Uber, Bolt, major retailers and Takealot have also become part of the net.

The SAPO previously took these private groups to court to stop them from delivering small packages.

This was supported by ICASA in a court battle in 2018.

However, a high court interdict at the time prevented this from happening as heavyweights entered the fray to challenge the exclusivity.

According to Malatsi, most public submissions on the changes to the SAPO’s exclusive services are overwhelmingly opposed to the state service having a monopoly.