The Communications Authority of Kenya (CA) will use part of the money contributed by telecommunication operators to the Universal Service Fund (USF) to refurbish and repurpose some of Posta’s unviable branches, keeping them from closure.
Appearing before the Senate Committee on Information, Communication and Technology last week, CA officials told senators that funds from the USF are already being used to refurbish 17 Posta branches.
Posta CEO John Tonui confirmed that the 17 branches are among the 125 commercially unviable branches the State-owned corporation had planned to shut down. He said the USF funds would help keep them open and convert them into smart post offices.
“The 125 are currently rented offices we will convert to smart post offices using the money,” Mr Tonui told Nation, but did not confirm how much had been ring-fenced for Posta.
Posta had planned to close 20 per cent of its branch network by the end of this year to reduce annual costs of Sh1 billion spent on rent and staffing.
With the CA injection, Mr Tonui said the branches would now be kept open and converted into smart post offices, with virtual postal addresses using the corporation’s M-Post platform.
Kabartonjo Posta Office in Kabartonjo town, Baringo County on July 18, 2023.
Photo credit: Jared Nyataya | Nation Media Group
The USF has historically been used to build mobile network masts and lay fibre-optic cables to improve connectivity, but the regulator last year announced a plan to expand the fund’s mandate to include legacy broadcasting and postal and courier systems.
The fund was established to support ICT infrastructure in areas considered commercially unviable by private companies. It is financed through mandatory contributions from licensed operators in the sector.
In its strategy running up to 2027, CA had earmarked Sh3.1 billion to improve postal and courier services in the country, part of which will now go towards sustaining some of the commercially unviable branches.
The support comes at a time when the Postal Corporation of Kenya is undergoing a major restructuring aimed at improving its commercial viability after years of losses caused by declining traditional postal services.
In the year to June 2025, Posta made its first profit in years of Sh488 million, up from a loss of Sh1.08 billion the previous year, supported by the recovery of Sh1.5 billion in rent arrears owed by Huduma Kenya.
To boost revenue and sustain its operations, Posta has been forced to cut back on spending and increase its revenue streams. This year, it plans to raise letter box rental fees by up to 12.4 percent to increase income.
It is also seeking a strategic e-commerce partner to invest up to Sh2.5 billion in exchange for a stake in its courier business, EMS.
