The Indian Postal Service - Getting a Make Over?

It seems like the after much noise about the potential for the Indian Postal service to turn itself around into a new age enterprise, there is finally some action happening. According to this report, India Post is going to attempt to launch banking services. Other interesting stuff that you can already do at your neighbourhood post office is file your income tax returns, pay utility bills, fill up various investment and savings forms, and, that's pretty much all there is.

Here's an interesting presentation on leveraging the reach and ubiquity of the postal service. The World Bank organized a seminar on "efficient service delivery (postal, financial, ICT) within the context of a commercially viable postal institution. "

I wonder why all the various attempts at creating e-choupals by ITC and others do not simply leverage the existing infrastructure of the post offices across the country (150,000 of which 1200 are already connected via VSAT). Why reinvent the wheel? I think the postal service should be looked at simply as an existing massive infrastructure, where the actual delivery of mail will continue to be a loss-making enterprise, but something that cannot be done away with obviously.

At the same time, you have this huge opportunity to deliver everything else, right from FMCG goods to electrical utilities (Italian Post delivers vacuum cleaners among other things), agricultural produce and most of all information. We love to drop the phrase "reaching out to the farthest corners of the country", well here's how to do it. On the other hand, India Post cannot simply be privatized, since the first thing a private player might do is cut off the loss-making mail delivery service, especially to remote villages.

But what's needed more than anything else is the iron-will, vision, and continuously innovative strategy to turn around a PSU behemoth like this one. What is not needed is retrograde government regulations designed to reduce competition - especially from cheaper, efficient courier services.

I remember during a trip to Italy last year when people spoke in almost revered tones about Corrado Passera who turned around Poste Italiane to a profit-making enterprise. When he was called in to the rescue in 1997, it was a basket case (losing $1 billion annually), and now not only is it profitable, but has ventured into services no one thought could be delivered by a postal service.

It has embraced technology, allowing people to write stuff online, which it will then print out and deliver to the remotest villages in the country, and has other cool offerings. And although, its traditional postal service is still loss-making the other unconventional services more than make up for it resulting in annual profits of $400+ million and a valuation of $13 billion with prospective privatization around the corner. Passera of course has moved on now to turn around Banca Intesca along the same lines. It remains to be seen if Jyotsna Diesh and Dayanidhi Maran can pull off a Passera.