A South African Post Office (SAPO)-focused partnership programme with the private sector will commence this quarter, as part of plans to resuscitate the ailing state entity.
This was revealed by the Department of Communications and Digital Technologies (DCDT) in a written reply to a Parliamentary question from EFF MP Sixolise Gcilishe.
The MP’s question is based on the Auditor-General of SA’s report that shows financial difficulties among key entities under the DCDT’s oversight, notably SAPO, the South African Broadcasting Corporation and Broadband Infraco (BBI).
The DCDT oversees 11 entities, with several having received billions of rands in bailouts from the state. Despite this, they remain under strain.
The post office, which was once considered a key institution, has been brought to its knees due to mismanagement, staff retrenchments and inadequate investment in IT systems.
To save one of the state’s oldest establishments, the department heads have touted plans to pursue private financial and operational partners for the post office.
In the Parliamentary reply, minister Solly Malatsi indicates that his department is engaging the Development Bank of Southern Africa for technical assistance in the implementation of a proposed partnership programme with the private sector, designed to maximise value from SAPO’s asset base and create mutually-beneficial services.
“The programme was launched in November 2025, and a clarification meeting was held in December 2025. The programme is expected to formally commence during the first quarter of 2026,” he states.
Shifting to BBI, the backhaul connectivity provider, the minister notes that rationalisation plans are still in place, as part of its revised turnaround strategy.
“BBI and Sentech are proposed to be rationalised, and steps will be taken in the first quarter of 2026 to appoint a transaction adviser for this purpose,” he reveals.
A merger between BBI and state-owned signal distributor Sentech will result in the establishment of the State Digital Infrastructure Company.
Sentech will take charge of BBI by means of an acquisition, resulting in the formation of the new entity. Its creation falls within government’s mandate to consolidate state-owned companies that operate within similar environments.
BBI offers long-distance national and international backhaul connectivity. Its wholesale broadband connectivity products are supplied to private and public customers across South Africa, as well as neighbouring Southern African nations.
As a schedule two company, in terms of the Public Finance Management Act, BBI has a profit mandate. However, it has a history of recording financial losses and its struggles to fulfil its broadband access mandate have also been documented.
The South African Post Office was placed under business rescue in 2024, because of its dire financial status.
According to the minister’s reply, to keep SAPO afloat, the department has utilised current legislative funding mechanisms within government, while pursuing alternative methods of funding, including partnerships and entity actions taken to secure funding with the private sector on business initiatives.
“Submissions have been motivated through the MTEF and MINCOMBUD [ministers’ committee on the budget] and directly with [National] Treasury, but funding is not available.
“SAPO’s business rescue process has reduced SAPO’s staff cost and closed some post offices to reduce cost in that area as well.”
For BBI, the entity has been formally directed to prioritise stringent cost-containment, debt management, and cash-flow improvement measures within its turnaround strategy.
According to the ministerial response, BBI’s intended rationalisation with Sentech is expected to reduce costs in both entities and achieve savings. “Additional funding is not available.”
Share