32 No. 37261 GOVERNMENT GAZETTE, 24 JANUARY 2014 Chapter 4: Postal Infrastructure Services and Content 4.1 Introduction The postal services sector is an important component of the economic sector in South Africa contributing approximately 3,16% to GDP. This includes the courier and express parcel market. The sector enables individuals and businesses economically and plays an important role in development. The letter post is declining both in terms of volume as well as a percentage of total revenue generated in the sector. The declining trend in letter mail volumes is ascribed to the global recession and electronic substitution effects. Despite this trend, the need for a postal service is unlikely to disappear. While efforts are being made to bridge the wide digital divide in South Africa, postal services remain important for people and communities who do not have ready access to e-mail or the internet, for example, when applying for jobs or keeping in touch with family. The postal network also serves as a conduit for government to communicate with communities in the most rural parts of the country, as well as communities without access to electronic media. Besides, almost every business relies on the postal, courier and express parcel market for daily operations. From a social perspective, a basic postal service is the right of all citizens and is essential to the social and economic development of South Africa. Almost every individual is dependent on postal services and almost every business's value chain intersects with the postal service's value chain. There is a need to fulfil the social obligations of the sector while still ensuring that it remains commercially viable. The social objective is characterised by universal service obligations and is driven by affordability, equity and keeping costs down, while the commercial objective is driven by profit maximisation, efficiency, and quality of service imperatives. 4.2 Policy and regulatory environment The Postal Services Act No. 124 of 1998 (the Postal Services Act), provides for an operator to be invited by the Minister to provide services within the reserved area. Currently SAPO holds a 25-year licence and is the only operator licensed to provide services within the reserved area. Operators wanting to operate within the unreserved area must apply for a registration certificate with the regulator. The registration is valid for one year from the date of issue and costs a non-refundable fee of R500. SAPO is also required to register in order to provide unreserved postal services. The Act provides for the Regulator to suspend or cancel any licence or registration certificate issued, if the holder has contravened the terms and conditions of the licence or certificate or the provisions of the Act. ICASA is expected to monitor not only SAPO's compliance with licence terms and conditions as well as the law, but that of all postal operators serving the unreserved market. However, due to capacity constraints, over the years ICASA has relied on compliance reports submitted by SAPO and has performed limited inspections. 28 This gazette is also available free online at www.gpwonline.co.za