Pakistan Post to Setup its Own Mobile Financial and Logistics Companies

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

Together with, endorsements for setting up of mobile monetary services and logistics company by Pakistan Post were also fixed.

After these approvals, Pakistan Post will join hands with private firms to form two departments.

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

While Easypaisa of Telenor Pakistan has shown attention in the Mobile Money Transmission on Public Private Partnership (PPP), 23 other native 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 appearance of branchless banking facilities, Pakistan Post’s money order facility has become an absolute product.

According to administrators Pakistan Post requires Rs 4 billion to mechanize post offices, however the organization is getting just Rs 50. million per year for computers and this is exactly why it has continued ineffective in computerizing 3400 post offices across country.

Pakistan Post’s expenditures 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 expected expenses at Rs 16.397 billion and income at Rs 11.5 billion for 2016-17, thus shortfall 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 established 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 presently value around 80-100 million dollars per anum. Within the next few years, it’s likely to number in the billions. In difference, the courier marketplace is worth 30 billion rupees per year as per Pakistan Post’s estimations.

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 asset 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 Group was held on 23-06-2016. They have confirmed the Expression of Interest (EOI) in this case which is now under procedure of publication.

Re-Branding

Pakistan Post will rebrand itself by promotion facilities and arrivals 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 exhibitions and its final approval from Obtaining Committee.

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