As BCX, a Telkom company, continues to struggle, the ICT systems integrator is seeking growth within its IT businesses, while pivoting on converged communications.
Telkom reported its third quarter 2023 financial results today, revealing BCX revenue was flat at R3.5 billion, mainly due to an increase in hardware and software sales.
In the period, BCX’s IT business grew 7.4% to R1.8 billion, attributable to growth in the hardware and software business of 30.2%, says Telkom.
The company notes: “The IT hardware and software business leveraged off its partner ecosystem and a more reliable global supply chain to improve the fulfilment of back-logged orders and new orders. Performance was, however, negatively impacted by a 2.5% decline in the total IT services revenue, due to a prior year once-off project in the field services enablement and digital workspace management spaces, not recurring in the quarter.”
Turning to the converged communications business, revenue declined by 7.4% to R1.6 billion, with Telkom saying: “The business continued to see a decline in fixed voice revenue, with ongoing migrations to more cost-effective next-generation solutions.
“The traditional voice revenues declined in line with our five-year migration plan. Furthermore, we experienced lower than expected uptake on the next-generation technologies due to customers still seeing value in the legacy services, especially in the public sector.
“With the increase in adoption of hybrid cloud services, traditional data customers are shifting away more rapidly from premium multiprotocol label switch services and adopting new software-defined wide area network technologies that are driving a shift to lower ARPU broadband services due to more favourable pricing on internet.”
Looking forward, Telkom says: “As BCX continues operating in a challenging landscape, the business seeks to implement measures for growth, specifically within its IT businesses, whilst it pivots its converged communication businesses towards a digital framework.”
Meanwhile, another Telkom unit, Swiftnet, continued to commercialise its portfolio, with the telephony group saying it “remains focused on commercialising the masts and towers portfolio, that amounted to 3 960 towers at the end of the quarter and included 14 towers and three in-building solutions sites that were constructed during Q3 FY2023”.
In other metrics, Swiftnet revenue amounted to R318 million, which was flat year-on-year.
“Revenue growth, underpinned by escalations, new tenancies and existing tenant installation upgrades, was offset by terminations from one of our mobile network operator customers, as well as Openserve's continued optimisation of legacy-based technologies.
“To further augment growth, we received new site applications from various tenants as their 5G rollout plans are implemented.”
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