The average ten per cent increase in April this year, brought rates closer to such a level, although it still costs over R1,30 for street delivery of a single letter, a service for which users now pay R1,10. The bottom line is that South African postal rates were about half what they should be. The new tariffs are close to where they should be and further increases will be at around the inflation rate, adds Maisela. This will require innovation to cover the costs of providing low-volume postal services to uneconomic outlying areas. We have to manage the revenue increase and not the price increase.
Revenue is a product of both volume and tariff.
The Act, signed by President Mandela on 2 December 1998, creates a framework for the South African Post Office to become a world class operator in a market which is becoming increasingly competitive. In particular, the Post Office must ensure greater access to postal services by re-balancing the postal network for equity. The Post Office's previous monopoly applying to all letters up to two kilograms was reduced to one kilogram. At the same time the Post Office will be licensed and will have to provide a universal postal service. A postal regulator will be established in the Ministry with the main aim of achieving universal service and to make regulations for the sector.