BCX CEO Jonas Bogoshi is clear-eyed about both the challenges and the opportunities facing the South African IT services provider and subsidiary of Telkom Group.
After years of restructuring, retrenchments and the drag of Telkom’s declining legacy communications business, he believes the picture is improving for BCX, with the business positioned for growth in a market being reshaped by cloud and artificial intelligence – and fiercer-than-ever competition.
But the turnaround is far from simple. In an interview with TechCentral on Wednesday, Bogoshi detailed how BCX is navigating the complex transition from legacy infrastructure and voice services to higher-growth businesses such as cloud services, cybersecurity, the internet of things and proprietary sector-specific platforms.
BCX is essentially two businesses moving in opposite directions. The IT solutions segment is growing at 3-4%/year, while the old Telkom Business – essentially the converged communications division – continues to shrink.
Legacy products such as ADSL, MPLS and traditional voice, which historically enjoyed high margins, are fast disappearing.
“The days of ADSL and MPLS networks are over,” he said. Though customers benefit from lower costs when shifting to next-generation connectivity, BCX takes a revenue and margin hit when that happens. But legacy communications revenue that once fell 15% year-on-year is now declining at around 5%, suggesting an inflection point is near.
The goal now, according to Bogoshi, is to emerge from decline into flat growth over the next year before returning to modest expansion.
Shifting demand
On the IT side, the picture looks brighter. Enterprise budgets are flat, but demand is shifting towards cloud, AI and security, where revenue is growing nicely. BCX is delivering double-digit growth in cybersecurity services, for example, and its multi-cloud orchestration strategy – supporting Amazon Web Services, Microsoft Azure and Alibaba, along with its own cloud offering – is paying dividends.
IoT is another growth pillar. BCX has built in-house platforms for intelligent building management, surveillance and manufacturing automation. Growth is still modest, but the pipeline is encouraging, Bogoshi said.
In vertical markets, BCX is unusually strong. Its pharmacy management system – recently modernised – is used by roughly 60% of the country’s pharmacies and now includes an integrated clinic module. Municipal solutions are another standout: BCX provides financial management ERP software to 60-65% of municipalities, a notoriously complex environment where major global vendors often fail to gain traction.
Read: Telkom keeps winning – but BCX is still a drag
The past few years of restructuring were painful. BCX cut its management layers by 40%, shrinking its extended leadership team from over 100 people to just 35. Developers were centralised into a common team to drive best practice and scale. Cost-cutting led to underutilised floor space at its imposing head office in Centurion, near Pretoria, which has now been occupied with third-party tenants.
A long-discussed strategic equity partner, first mooted under the leadership of former Telkom Group CEO Sipho Maseko, is firmly off the table for now. Telkom’s new leadership team, under Maseko’s successor, Serame Taukobong, is driving closer integration under a “One Telkom” model – effectively reversing the earlier strategy of independence. “The synergies between Telkom and BCX are strengthening, not weakening,” Bogoshi said.
BCX’s AI strategy, meanwhile, is deliberately cautious. South African businesses are accelerating experimentation, but the scale of future workloads remains uncertain. “If you look at the stats of what will be the demand for AI … they differ by more than 80%,” Bogoshi said. That makes capital allocation risky.
For now, BCX is tracking customer demand and offloading workloads to “hyperscale” cloud providers like AWS. Only once the trajectory is clearer will it invest in its own GPU clusters. “We want to keep our options open … without misallocating capital.”
Bogoshi is blunt about the skills shortage: “We are not finding the people we need.” Cloud architects, cybersecurity professionals and AI specialists are in critically short supply – made worse by global firms poaching remotely.
BCX has responded by building internal academies. Its first cohort of 200 cloud specialists has graduated, with another 200 in training. A cybersecurity programme with universities and tech partners will produce 60 graduates by March. AI is next.
The enterprise IT landscape is shifting, with competition intensifying, including from global consulting firms using AI to automate previously labour-intensive tasks.
“If you don’t have scale in this business, you will be in trouble,” Bogoshi warned, predicting consolidation. BCX intends to be a consolidator, not a target.
Despite the market turbulence, Bogoshi remains upbeat. The combination of cloud, cybersecurity, IoT and sector-specific intellectual property – backed by a leaner, more accountable organisation – has put BCX on a stronger footing, he said. – © 2025 NewsCentral Media
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