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Rediff.com  » Business » Will India Post ban e-mail too?

Will India Post ban e-mail too?

February 09, 2006 13:15 IST

Since most companies, and many individuals, prefer to have a courier come and pick up mail for delivery instead of standing in line at the post office to buy stamps, it's not surprising that the department of posts feels threatened by an industry that has grown to Rs 3,500 crore (Rs 35 billion).

The result is a proposal to ban couriers from carrying packages that weigh less than 500 gm, and to make this category the exclusive preserve of the post office.

It is not clear whether delivery boys retained by most offices will also fall under this ban. But while it is in the mood to ban, the postal authorities should also look at the hundreds of crores lost on account of e-mail becoming so popular.

Letters below 500 gm? Only India Post may carry them

And surely, the increasing popularity of short messages over mobile telephones has dealt a killer blow to post cards, with even television shows now willing viewers to send answers to competitions on SMS, as opposed to the post cards of yesterday.

The reason for such wild thoughts is that the post loses money, while the private courier companies make it. With its vast infrastructure and tested systems, the post could easily have competed with the courier companies on high-value traffic, and it did make some attempts but none of them was sustained. If anything, performance standards have slipped badly.

Telegrams are often delivered like ordinary mail, and money orders can take weeks to reach the intended recipient because someone is playing the "float" on the money.

At the same time, the post offers its extensive network of offices to rivals like Western Union to do their money transfer service! Indeed, in rapidly developing townships like Gurgaon, the postal department has neither expanded staff nor opened new offices; and the delivery of mail has virtually stopped for want of staff.

It is the courier companies that have saved the day by stepping into the breach. At almost every stage, the post has failed the test in a competitive marketplace.

There are two ways to deal with competition - shape up, or ensure that competition does not take off.

Using the latter, it must be said, has been a time-tested feature, so there's no reason for the DoP to feel embarrassed about the amendment it has in mind.

When cellular phones were first introduced in the country in the mid-1990s, the government prevented them from charging rates that were below a certain multiple of what the state-owned BSNL and MTNL charged. Satellite-based communication service providers are still not allowed to use cheaper, more efficient foreign satellites, and even the maximum speeds at which they can transmit data were fixed, till quite recently.

The government, it is true, did not act upon the representation of the pager firms who wanted it to prevent mobile phone firms from offering SMS services some years ago, since this killed their business model, but that is because the pager firms were in the private sector.

Banning courier services from carrying certain kinds of mail will not carry a similar stigma, as this will be done to protect the government-owned postal department, and therefore in the national interest.

Sure, the post office can reinvent itself and work out a viable business model for the new age, but there's nothing as appealing as executive fiat, is there?
BS Bureau
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