Telkom Group is currently searching for a “strategic equity partner” to invest in its BCX IT services unit, as that will help it unlock cash-flow to scale the business.
CEO of the Telkom group, Serame Taukobong told ITWeb that the company is continuing with its “value unlock strategy”, where it is looking for partners to support its requirements either for scale or capability, or both. This will enable it to compete more effectively in the market.
The potential takeover of Telkom has sparked industry-wide interest, as the ailing telephony group is becoming more attractive to potential investors due to its extensive infrastructure, data centres and customer base.
Taukobong says Telkom is investigating the possible introduction of a strategic international or local equity partner at BCX, which will help enhance scale and capabilities in various growth areas, especially the cloud services and cyber security.
Telkom reported its revenue was marginally up by 0.9% in its latest financial results, and it mentioned that it has plans in plan for an asset write-down of R13 billion, through the planned impairment of its businesses Openserve, Telkom Consumer, Gyro and BCX.
The announcement shot the telco’s shares by 30%. The results also revealed that BCX remained under pressure, as its converged communications business continued to be impacted by migration to next-generation technologies and robust competition in the market.
During the annual results webcast presentation to investors last week, Taukobong said BCX had a challenging year but managed to maintain stable revenue levels. Performance was driven by growth in the IT business, which was offset by declines in the converged communications business. He explained that markets are changing significantly, and the challenging economic conditions, among other difficulties, had an adverse effect on the group’s performance.
“With BCX, we’ve always talked about finding the right strategic partner, and what we need in scale and capability. So, if we do find the right strategic partner, we would definitely give it our consideration.” – Taukobong said.
Picture: Infraset
