Tan Kiat How on future of SingPost rates and services
Singapore Post (SingPost) may be allowed to adjust postage rates in future to better reflect the changing costs of the letter mail business. Senior Minister of State for Communications and Information Tan Kiat How said this in Parliament on Wednesday (Jul 5) in reply to an MP’s question. He said domestic postal rates have largely stayed the same since 2014 and adjustments will have to be enough to allow SingPost’s business model to remain viable without requiring direct Government funding. This comes as the speed and scale of digitalisation since the COVID-19 pandemic have led to a sharp decline in domestic letter volumes, dropping by more than half from FY2015 to 260 million letters in FY2022. It is a trend that is expected to persist. Businesses now make up over 80 per cent of mail users, while the average consumer sends less than one letter per month. It will thus be challenging for SingPost to continue running a viable business with its current operating model, said Mr Tan. And it has to do so because it is both a public postal licensee with universal service obligations as well as a private listed company with obligations to its shareholders. Mr Tan said the Infocomm Media Development Authority (IMDA), as the postal regulator, will work closely with SingPost on a fundamental review of the future of the postal service. They will review costs and operations, including automating most services. IMDA will also review the current postal service obligations to ensure they remain relevant in the digital era.
Singapore Post (SingPost) may be allowed to adjust postage rates in future to better reflect the changing costs of the letter mail business. Senior Minister of State for Communications and Information Tan Kiat How said this in Parliament on Wednesday (Jul 5) in reply to an MP’s question. He said domestic postal rates have largely stayed the same since 2014 and adjustments will have to be enough to allow SingPost’s business model to remain viable without requiring direct Government funding. This comes as the speed and scale of digitalisation since the COVID-19 pandemic have led to a sharp decline in domestic letter volumes, dropping by more than half from FY2015 to 260 million letters in FY2022. It is a trend that is expected to persist. Businesses now make up over 80 per cent of mail users, while the average consumer sends less than one letter per month. It will thus be challenging for SingPost to continue running a viable business with its current operating model, said Mr Tan. And it has to do so because it is both a public postal licensee with universal service obligations as well as a private listed company with obligations to its shareholders. Mr Tan said the Infocomm Media Development Authority (IMDA), as the postal regulator, will work closely with SingPost on a fundamental review of the future of the postal service. They will review costs and operations, including automating most services. IMDA will also review the current postal service obligations to ensure they remain relevant in the digital era.
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