Pakistan Post to Setup its Own Mobile Financial and Logistics Companies

To make Pakistan Post a profitable entity, Prime Minister Muhammad Nawaz Sharif has given a go ahead for the complete re-branding of the entire department.

Alongside, approvals for setting up of mobile financial services and logistics company by Pakistan Post were also granted.

After these approvals, Pakistan Post will join hands with private firm(s) to form two departments/companies:

• One for Mobile Financial Services
• And Another for Logistic solutions

While Easypaisa of Telenor Pakistan has shown interest in the Mobile Money Transfer on Public Private Partnership (PPP), 23 other local as well as foreign companies (from Australia, US, UK) have shown interest in the Pakistan Post reform agenda and submitted bids for Mobile Money Transfer on PPP (Private Public Partnership) basis.

Pakistan Post Needs To Adapt Now More Than Ever

Since the emergence of branchless banking services, Pakistan Post’s money order service has become an absolute product.

According to officials Pakistan Post requires Rs 4 billion to computerize post offices, however the department is getting just Rs 50. million per annum for computers and this is exactly why it has remained unsuccessful in computerizing 3400 post offices across country.

Pakistan Post’s expenses remained at Rs 15.452 billion and revenue at Rs 11 billion during 2015-16, thus registering a loss of Rs 4.45 billion.

The department has projected expenses at Rs 16.397 billion and revenue at Rs 11.5 billion for 2016-17, thus deficit may rise to Rs 4.8 billion during on-going year.

To launch Mobile Money Transfer (Public Private Partnership), Logistic Company (JV) and Re-branding (JV) committees have been constituted to ensure transparency at each level.

Mobile Money Solution

Expression of Interest (EOI) duly approved by the relevant Committee was floated in the Newspaper on 29th May 2016. Several Bids have been received which have been placed before the Project Reform Management Unit.

For the mobile money solution, Pakistan Post will use its existing 3200 post offices and roughly 9,000 agents.

Within 2 years and hopefully a 20% market share, Pakistan Post is looking to earn up to 5 billion rupees in revenue through the mobile money service.

Logistics Company

The local e-commerce market is currently worth around 80-100 million dollars per year. Within the next few years, it’s expected to number in the billions. In contrast, the courier market is worth 30 billion rupees per year as per Pakistan Post’s estimates.

As e-commerce blossoms, so will the courier market and it’s piece of the pie the company is targeting.

For this purpose, Pakistan Post is aiming to launch a fully owned logistics company in partnership with private sector partners for investment on revenue sharing basis.

An investment of 800 million rupees will be made in the following areas:

• GPS enabled trucking fleet
• Warehouse
• Distribution channels
• Information technology
• Brand recognition

The initial meeting of the relevant Committee was held on 23-06-2016. They have finalized the Expression of Interest (EOI) in this case which is now under process of publication.

Re-Branding

Pakistan Post will rebrand itself by upgrading facilities and appearances of its post offices, along with preparation and adoption of medium and long term postal policies.

EOI have been framed and approved by the Re-branding committee. EOI have been handed over to the program Director Project Reform Management Unit for preparing presentations and its final approval from Procurement Committee.