ZIMPOST was once renowned as the leading postal, communication and financial services provider in Zimbabwe with a postal network of over 250 outlets.
However, technological developments have since rendered the use of letters for communication between many people obsolete.
Standardbusiness (SB) caught up with Zimpost managing director, Douglas Zimbango (DZ) who gave insight into the remaining relevance of Zimpost.
SB: What are the key business areas that Zimpost is focused on presently?
DZ: Our focus is on agency services and these relate to transactions that we do on behalf of third parties using our vast network. This has come about as a result of technology which has crippled our previous core business which was delivering letters. We now deal with insurance companies and other financial institutions.
SB: What sort of charges or commission do you levy for these services?
DZ: It is a percentage of the amount that we pay out. It can range between 5% and 10%, so it just depends on the negotiation. This is now our core business and to support this new business we have to computerise so that we can interface with the databases of the various companies that we do business with. For example, when you pay for your Zinara licence we have to extract data from the Zinara database to ensure that no car which was not licensed in the previous licensing period gets licensed without paying a penalty for the previous period.
This also applies with insurance and financial institutions.
We are investing heavily in IT. So far we have invested US$3 million in front office and back office systems.
We are now working on connectivity. We have invested over US$1,5 million so far to connect the various offices by fibre and VSAT (Very Small Aperture Terminal) for those remote areas where there is no fibre. For VSAT we have invested about US$450 000 in very outlying areas while other areas along the highways will use fibre. We have partnered Econet, Liquid, TelOne and PowerTel.
SB: How relevant is your electronic money transfer service in light of mobile money transfer services and which is your target market for this facility?
DZ: The money transfer that we are running is also electronic; we have just taken the old money order and put it on an electronic platform. It is also instant, the only difference with mobile money is you get your message on your phone but with us it goes straight to the post office near you.
SB: But how many people would really be interested in embarking on a journey to the post office yet they can simply use mobile money transfer?
DZ: In the first instance, our people do not transact so much using plastic money. What they do is just send money. They would want to get hold of real money. From our studies, almost 95% of the people do not transact from their cellphone, they use the cellphone for the transfer and then they get actual cash. So in the end you have to go to the brick and mortar [physical building] to get your cash and we represent almost every mobile money transfer company. In the end people go to the post office.
Our money transfer is efficient in that our limits are higher than the mobile limits and it has triple check mechanisms to ensure that there is no fraud. Our charges are also very low and one way, you don’t get charged for sending and receiving. We are also the only transfer agent which can send money out [of Zimbabwe]. At the moment we have just agreed with Tanzania targeting cross-border traders who ply the Dubai route, we are servicing niche markets.
SB: The company is increasingly viewed in the market as having been outpaced by technological developments. What is your response to this?
DZ: Judgement by people is based on who we were, not who we want to be. If you get to the post office now, we have embraced technology. We have community information centres or internet cafés.
To address the instant nature of communication, we have introduced hybrid mail. In the instant where it’s a statement, the customer will come with the statement on cd, have it printed on the machine, and it’s printed at the point of delivery instantly. We went to tender and have paid with major offices now linked and smaller offices being the ones we are now working on.
SB: How visible is the PostBus service in the country and is it practical?
DZ: Through our PostBus service, we are no longer looking at the cost of delivery as a hindering factor. The bus moves with passengers and mail as well. The cost per item is spread over larger volumes; we can go to all our destinations every day. We have seven buses servicing major routes with traffic that we can cater for daily. We can do daily runs. It makes mail distribution a lot cheaper but obviously there is competition as passenger volumes are not as high. The trust that the post office has always had, we have passed it on to the postal services.
SB: Is the company making full use of its premises in accordance with its mandate or it is facing viability challenges as many flea markets can be seen renting part of the Harare premises?
DZ: When the post offices were built, they were built in a monopoly situation and there were hardly any new technologies. The mail volumes justified the sizes of post offices then but now we need fewer people than we needed in the past due to new technologies. In the end we have excess space in most of our outlets and for us to realise value, whether you use the premises or not, you have to pay city council rates, we are renting the excess space out. But we have not mixed our business with others. This helps us to pay council rates and as we are in transition from what we were to what we want to be, even for day to day operations including salaries.
This modernisation exercise has been coming from these operations as we have not been getting funding from government. We are supposed to be found everywhere regardless of whether we are making money or not. We have got a universal service obligation put on us by government, so [we] have to be everywhere and even expand. We use the money from non-traditional business to subsidise postal services.
SB: What are the company’s plans going into the future?
DZ: Our business model is now an agency service. We want to be a one-stop convenience shop where clients can come and pay council fines, apply for passports, pay local council rates, utility bills, all through the post office. This is the route we are taking. We are going into an era where we develop a switch that will interface with all service providers to make transactions electronic. We want to be the face of all businesses, but we will do the traditional services for which we are licensed by Potraz.