Singapore Post (SingPost) has been granted approval for the revision of rates for domestic and international postage services with effect from 1 Oct 2014. The rate increases vary for different weights and types of articles, though SingPost estimates that the average annual postage spend per individual for domestic standard mail will rise from S$1.56/year to S$1.80/year, for an average of six letters sent per individual a year.
This is the first effective domestic postage rate increase in eight years despite cost increases of nearly 50% since the last postage revision in 2006, and international airmail postage rates have not been revised since 2006 despite terminal due rates having risen by 42.6% and will further increase by 37% by 2017.
To mitigate the impact of new postage rates, SingPost will give out 10m stamps to households and also offer a 5% rebate on franked mail for businesses for a year from Oct. Pending more details from management, we put our Hold rating and S$1.71 fair value estimate under review
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