Can you please give us some background information on the Postal Corporation in Tanzania, in terms of its historical background and its structure today?
Up to 1993 we were part of Tanzania Posts and Telecommunications Corporation, but in 1993 the government split the Posts from the Telecommunications sector, and also the creation of a Regulatory Board called The Tanzania Communications Commission. To me that was a very important step because it gave the Postal sector management independence. Under the previous organization of Tanzania Posts and Telecommunications Corporation, telecommunications business was the major business, and major income earner, unfortunately it was also weak. Most of the problems were connected with Telecommunications. So the Postal Services was receiving less management attention. This split which gave management independence to the Postal Services, was the starting point for our growth today. The separation of 1993 also created a new situation for us and that situation is the competitive environment we are operating in today. Previously, we had the monopoly, today we don't have it any more. The regulator is there to license anybody wishing to deliver postal services. We in the postal services have seen the new competitive situation as a challenge, and an opportunity. Under the old situation whereby we had the monopoly, we never bothered much about taking care of our customers. Today, because of the competition we are now aware of customer needs, we have created situations and structures to get into contact with our customers. In terms of our structure - we have a Board of Directors; and a Chief Executive (Postmaster General) who reports to the Board of Directors, and below the Chief Executive, there are two directors, one in charge of Operations, and another one in charge of Corporate Services (Supporting Services). We have also created new units which report to the Chief Executive and one of that is the Marketing Department.
Who are the main shareholders?
The government so far owns 100% of the shares. For the time being the government has not yet come up with a clear policy on what it is going to do with the Post Office in the future; and especially, taking into account that the government of Tanzania has made itself very clear that it does not want itself to engage in business. It want to get out of business and let the businesses to be run by private institutions. So for the Post Office, the government has not made any decision on whether it is to be privatized like the other parastatals, or we should remain under the government. In 1997 the government said it has not yet formulated a clear policy on how the Postal Sector should be run in the future. Fortunately the government said you are going to sign a contract, and we are going to evaluate you at the end of the year. If you perform well you get a bonus, if you perform poorly you will get penalties. In the mean time we have signed a Performance Contract with five areas which were identified for performance measurement. Those areas were - the speed of mail, profit, business growth in terms of traffic and revenue, security of mail, and customer satisfaction. At the end of each year the government send a performance auditor, who comes to audit the performance and submit the findings to the government. If we don't achieve the targets by 15%, all the staff in the corporation lose their salaries by 3%; and Board members also lose their board allowances and fees by 3%. If we don't achieve the targets by 20%, we (staff of the corporation) all lose our salaries by 15%, and board members lose their fees and allowances by the same percentage. If we don't achieve the set targets by 50%, the Chief Executive lose the job. In that case, the Board members can also be dismissed, a new Board of Directors constituted, and a new Chief Executive appointed. We haven't reached that situation yet, because we have been performing fairly well. We are aware that something serious could happen if we do not perform well. Because of this performance contract, we have been compelled by circumstances to improve our performance. Today I would say our performance is much, much better than it was six years ago, when we started business. In terms of profit we have been making profit the third year after our establishment. In 1994 and 1995 we made a small loss, in 1996 we started making profit, and we have continued making profit today. In terms of delivery, I would say our performance is exceptionally well, because we introduced what we call, overnight mail deliveries, whereby customers wishing to send mail along our two major important routes, their mail could be delivered the next day.
Are there any new services you have introduced recently, or you want to launch in the future?
We are introducing new services and we are still planning to develop more new services, because the mail market is facing competition from technology development, and also private mail operators. We have got to satisfy our esteemed customers, find new sources of revenue and by so doing we find ourselves in these new services. We are providing agency services on commercial terms. We want to become in-payment and out-payment agents. For example, companies which have got shareholders, and they pay out dividends, they can assign TPC so that it can pay their individual shareholders and the Post Office get a commission out of it. It is a new service we have introduced and it is doing very well. We also introduced money transfer service six years ago by using telefax technology, and today I would say it is the most successful service in the Post Office. We call it Money Fax, and it is one of our best performing services drawing around 40% of the market share regarding money transfer within the country. We also distribute newspapers on urgency basis. We also convey newspapers just as part of cargo. We are now trying to create a better capacity to handle range of products and services in one roof by modernizing our network. We are trying to automate our counters. When this has been done, it will be much easier for the Post Office to go out and convince customers that we have a modern network, and they can use it for agency services. We are agents for the Postal Bank, and many institutions who are trying to cut down their costs and deliver efficient services are invited to use the extensive Post Office network. We are also trying to see how we can combine the Internet and the traditional mail delivery so as to provide value added mail service to meet the diversified customer needs. This is because we see the traditional way of sending mail is slowly losing the market to the new technology, so we think that we also should get into this business. But we cannot get into this business until we have made some strategic investment.
E-mail and Internet has taken a lot of the market share, from the post, taking a lot of business. To what extent does the Internet represent competition here in Tanzania today?
I do not have a figure, in terms of how much we have lost, but I can tell you that our regular mail is stagnant and to some extent declining. The new technology is taking a good share of the market which we had previously, but we are also going to get into that market. Let me give you an example, many years ago, mail was going by ship, then came the aircraft, we said let us carry mail by airplanes, by that time it was the fastest way of sending mail. Today, it is no longer the fastest way of sending mail, by air. The fastest mail goes by E-mail, so we need to get into that area in the same way we entered with ships, airplanes etc.
| What has been your turnover for the last year, and can you give us some figures on the number of your staff?
Let me start with the number of staff. We started business in 1994, with 2,300 staff, and to date we are down to about 1,200. We have cut down the number of staff deliberately, as a way of cutting down costs, but this does not mean that services have suffered. We have used alternative ways of providing services cheaper. Instead of running some of the medium size Post Offices ourselves, we give it to an Agent. It is cheaper that way. Instead of providing security services ourselves, we contract out to private firms to provide security. Our plan is to contract out and outsource some of the Post Office activities to private firms who provide them efficiently, and we pay them. In this way we have been able to cut down drastically our costs. This is one of the reasons which has made us profitable. In terms of figures, I can give you the figures later however, since the inception of TPC in 1994 the revenue increased substantially up to 109% in the year 1999. Therefore our turnover per year increased from Tshs.4.5billion to about 10 billion Tshs. It is about 12 million dollars. Our net profit in 1998, after paying taxes, was about 3.14%.
What has been the development of your tariffs?
Of course our tariffs have been increasing regularly, partly to meet the costs of operation, but also taking into account devaluation of the currency. Part of the money generated from international mail services are being paid in local currency and we receive here and pay other Post Offices overseas in foreign currency. We have also to pay the Airlines in hard currency for conveyance of our mail to abroad. If the dollar rate goes down, it means we also have to correspondingly adjust our currency so that we are able to pay the airlines, and other Post Offices overseas. This is one reason why the tariffs have been going up. We also need money to modernize our facilities and meet other operational expenses. We have improved a lot in terms of quality of service, and to maintain and sustain our service, we also need money. That explains why we have been increasing our tariffs. But compared to our competitors we are still much lower.
Where do you see your business within the next three, four years, with all the new developments going on, and new technology coming in?
Within the next two years, I would see the Post Office in a far better place than we are today. For some of the projects we started investing about two or three years ago, we are now at the final stage of implementation - for example, the Counter Automation Project. We have made all the necessary preparations, to install computers at our Post Office counters. We have secured a new loan from a bank to automate all our large business centers.
According to the Loan Agreement we are supposed to start withdrawing this money by July this year. We expect by may be, early next year to have automated all our Regional Centers. Even when we have done that, one thing which we are working very hard on is to find a private investor who will provide a data communication network to link up these computers together, so that information flow would be faster. So if one comes to Tanzania, within the next two years, you would find the Postal services much better.
Are you already in talks with private investors to establish this network?
Yes, we are having discussions, and a report is ready and being studied, to establish a Data Communications Network. We don't want to put money into the network, we want to be users of the network. We are not specialists in information communication technology, but we want to use new technology to improve our services.
What would be your final message to our readers?
For people who come to Tanzania to do business, I know they would like to have their mails and messages going out very efficiently, in the shortest possible time. I think when they are here in Tanzania, some of them might want to carry out a market research in the neighbouring countries, to explore the business possibilities. I can tell you that we in the Post Office are already prepared in that area. Let me say that in so far as internal distribution of mail is concerned, we are having targets of delivering mail to various places in the country, and this is being monitored through the Performance Contract, but even in our own internal systems we monitor, to ensure mail is delivered within the specified standard time. For outgoing international mail, we have an international airport here in Dar es Salaam, there are a lot of airlines coming to Dar es Salaam. We have contracts to ensure that airlines coming to Dar es Salaam, when they go, they have to carry mail. For this reason, we have established an office at the Airport, to be in contact with the airlines, to receive incoming mail, and also dispatch outgoing mail, to make sure that there is virtually no delay for any mail going out. That is not all, for the courier mail, we have invested in what we call Track and Trace technology for people who want to track the movement of their letters, we have this technology in operation since 1996. There is another similar project to complement and strengthen the mail tracking facility which will be implemented by September. What we want to do is to implement a project, whereby the movement of mail can be checked, to know precisely where there is a delay. The system is called Diagnostic Monitoring System. This is a project which is currently being implemented in countries of the European Union, Canada and the USA, and Tanzania will be third country outside these countries to implement such a modern monitoring system. What is going to happen, is that at the International Airport, we are going to have a gate, where all incoming mail will go through. Then we shall have an antenna installed at the International Airport, so that if somebody is testing mail to find out where the delays are, the moment the test letter goes through the gate, it will be detected by computer, which will be installed there, and the message will be sent to Brussels, at the headquarters of International Post Corporation which is monitoring movement of test letters around the world. So it will be known that a letter coming to Tanzania has arrived at the International Airport at a certain time. We are going to have a similar gate at the General Post Office here in Dar es Salaam. So the same letter having been detected at the Airport would be also detected at the General Post Office. If there is any delay taking place between the airport and Dar es Salaam, it would also be detected in Brussels, because messages would be sent to Brussels. In this way, the International Companies operating here in Tanzania, are able to monitor our efficiency. This is the new Post Office which is free from any manipulation. If we are able to perform well, the records will show, that Tanzania performed well, or if we perform poorly, the records will also show, that Tanzania performed poorly. So I can say that International companies within Tanzania should be confident, that they can verify our performance, by writing directly to Brussels, or they can come to us, and we can tell them what we can offer. |
