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, representatives from CA said funds from the kitty are already being used to refurbish some 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, and the USF funds will help keep them open and repurpose them for a more digital use.
“The 125 are currently rented offices we will convert to smart post offices using the money,” Mr Tonui told Business Daily, but did not confirm how much exactly is ring-fenced for Posta.
Posta had targeted to close down 20 percent of its branch network by end of this year, to cut on costs amounting to Sh1 billion annually, spent on rent and staffing them.
With the CA injection, Mr Tonui says the branches will now be kept open and will be converted to smart post offices, with virtual postal addresses using the corporation’s M-Post platform.
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 to help sustain the commercially unviable branches.
The funds come at a time when the Postal Corporation of Kenya is undergoing a major restructuring, aimed at improving its commercial viability after years of loss-making due to dying core businesses.
In the year to June 2025, Posta made a rare profit of Sh488 million, up from a loss of Sh1.08 billion the previous year, supported by recovery of Sh1.5 billion rent arrears it was owed by Huduma Kenya.
To shore up 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 stake in its courier business EMS.
