Postal Corporation hikes costs for digital addresses by 2000pc

The Postal Corporation of Kenya has come under pressure following a move to increase the cost of digital addresses by more than 2000 per cent.

In a notice last week, PCK said the cost of owning and operating a virtual post office box would go up from the current Sh400 to Sh9,450 for corporates and Sh2,000 for individuals.

The announcement was met with swift criticism from members of the public, prompting PCK to issue a clarification.

"The M-Post virtual box service was initially in a pilot phase," stated PCK on its social media pages. "With the successful completion of the pilot, the Postal Corporation of Kenya has now fully integrated this service."

"As a result, the charges have been aligned with the standard rates of our physical Private Letter Box services; individual physical box Sh2000 and corporate physical box: Sh9450," stated PCK."

M-Post was launched in 2019 in partnership with mobile service provider Safaricom. It allows subscribers to use their mobile phone numbers as digital addresses where they receive notifications about their letters or parcels directly to their mobile phones.

Subscribers were initially charged Sh300 with the option of selecting which Post Office to collect their deliveries.

PCK had targeted to roll out five million digital Post Office Boxes across the country in a bid to raise Sh1.5 billion annually.

The deal was also expected to boost e-commerce service providers in the country, who have in the past cited the lack of a proper addressing system as an impediment to growth in the sector. Data from the Communications Authority of Kenya indicates that outgoing domestic letters rose 29 per cent to stand at 373,292 in the first three months of this year.

Domestic courier items similarly reported a 23 per cent increase over the same period to stand at 1.7 million. The new prices are also likely to throw cold water on efforts by the troubled State firm to modernise its operation and recover from its current loss position.

Data from the latest financial reports indicate that PCK's assets balance stood at Sh2.3 billion as of last year against Sh9.1 billion in liabilities. This puts the firm in a negative working capital of Sh6.7 billion and has in recent years relied on bailouts from the National Treasury to pay employee salaries and supplier debts.