STAATSKOERANT, 24 JANUARIE 2014 No. 37261 4.3 Overview of postal services and products According to the South African Standard Industrial Classification (SIC) system an industry is made up of enterprises engaged in the same or similar kinds of economic activity. In terms of this classification, postal activities include the following: pick-up, sorting, transport and delivery (domestic or international) of letter-post and mail parcels and packages by postal services operating under universal service obligation. collection of letter-mail and parcels from public letter boxes or from post offices, and distribution and delivery of mail and parcels Courier activities on the other hand include: pick-up, sorting, transport and delivery (domestic or international) of letter-post and mail parcels and packages by firms not operating under a universal service obligation distribution and delivery of mail and parcels The Postal Services Act defines a postal service as including the following: the provision of a reserved postal service or an unreserved postal service as contemplated in Schedule 1 and Schedule 2 of the Act, respectively. the issuing of postage stamps the provision of roadside collection and address boxes As part of its extended services SAPO also provides financial services through the provision of a savings bank. This has been provided through the Postbank, and has allowed SAPO to further diversify its income stream away from mail revenue. 4.4 Market structure and competition The following section analyses the various ways in which the postal services sector can be segmented. 4.4.1 Reserved and unreserved market segments The unreserved market includes the provision of all courier services together with any postal service that falls outside of the reserved area. According to ICASA's database, there were just under 300 courier operators registered in 2012. While there may be several hundred postal and courier operators in South Africa, the sector is dominated by approximately 20 firms, accounting for 98% of the industry's revenue. The five largest firms account for 78% of the total revenue in the sector, indicating a high level of concentration. SAPO's exclusivity renders it the most dominant operator in the sector, accounting for about 60% of market share in terms of revenues from postal and courier services in 2012. Despite the legislative delineation of the market into reserved and unreserved segments, there are unlicensed operators encroaching on the reserved services market. Despite being illegal, this practice amounts to unfair competition to SAPO,given that operators in the unreserved market segment do not have universal service obligations. For this reason, the capacity of the Regulator to monitor compliance in the sector cannot be over-emphasised. 29 This gazette is also available free online at www.gpwonline.co.za 33