BCX to compete against other ISPs

By Iain Scott, ITWeb group consulting editor

Johannesburg, 23 Aug 2005

Business Connexion (BCX) plans to use its acquisition of Bidnet to compete against other players in the corporate Internet service provider (ISP) market.

The group announced yesterday it had acquired Bidvest Network Solutions (Bidnet) from the Bidvest Group - subject to Competition Commission approval - putting it in a comfortable position to provide converged communication services.

Willem van Rensburg, BCX group executive for strategy, says that if the deal goes ahead, the group will compete against other corporate ISPs rather than simply focus on existing clients.

"We have been holding off for many years on starting our own VPN [virtual private network] because we wanted to see what comes out of the Convergence Bill," he says. "We`ve been taking a long, hard look at the market."

Van Rensburg adds that BCX has also been under pressure from its large outsourced client base to begin providing this kind of service. "So now we can step in and offer a full service. This is a good acquisition for us. It puts the C into our ICT services."

He says although Bidnet, formerly i-Fusion, has made losses in the past, "there has been a lot of restructuring and the company we bought is very different from i-Fusion. At the moment it looks quite positive.

"Brian [Bidvest CEO Brian Joffe] said that Bidnet lost R6 million last year, but that was because of a lot of investments they had to make for the future."

BCX could have built its own network, "but here is a state-of-the-art network already - with clients - as a going concern and already offering VOIP [voice over Internet Protocol]".

Van Rensburg adds that BCX considered several other players in the market, "but a lot of other people we looked at have legacy [systems]. We have a new-generation network view of life and we don`t want to be hampered by that stuff."

Bidnet`s 82 staff members are moving across to BCX, with no retrenchments being planned.

"We can`t really make a decision on rebranding before Competition Commission approval, but the intention is to bring Bidnet into the BCX fold," Van Rensburg adds.

He says because BCX is a large group, the acquisition will not make a "hugely significant" contribution to revenue initially, "but it`s a foundation for us to do more things".