While the Telkom mobile business has made great strides in recent years, its IT business, BCX, has been struggling.
BCX, then Business Connexion, was originally formed through the merger of two IT businesses, Comparex (formerly Persetel) and Q Data. It was bought by Telkom in 2015 in a R2.7 billion cash deal and offers a range of business IT and telecom solutions.
However, the business has been under pressure for years and has gone through several restructurings, including downsizing programs, to reduce its cost base.
Telkom is still exploring a potential strategic equity partnership for BCX, and group CEO Serame Taukobong told investors this week that if the right partner makes an offer at the right scale, he will certainly consider it.
“We’re looking to the East or India because they have a similar customer base,” he said in an interview with TechCentral Show this week.
The search for an investor for BCX, which is now headed by former Gijima chief executive Jonas Bogoshi, is part of the telecom operator’s broader strategic push to drive shareholder value in its subsidiary businesses. Other initiatives include the planned imminent sale of the Swiftnet mast and tower business and the search for a potential equity investor in Openserve, its wholesale infrastructure subsidiary.
Telkom hopes the outside investment will help stabilize BCX’s business, but progress in finding such a partner appears to have stalled.
BCX revenue for the year was R14.3 billion, a decrease of 0.25% compared to the previous year.
The company embarked on a five-year “legacy migration to the next generation” in 2019, but was slowed down by Covid-19. In the year to March, migration projects resumed, but data revenues declined to rates below pre-COVID-19.
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Although the IT industry benefited from the easing of global supply chain restrictions, load shedding, high local inflation and deteriorating economic conditions added to the pressures facing the business. – © 2023 Central Media News