Irrespective of the outcome of the Competition Tribunal's current review of the pending merger between South African cloud integrator specialist Business Connexion (BCX) and local telecommunications services provider Telkom Group, BCX chief executive officer Isaac Mophatlane has reaffirmed the importance of the company's pan-African growth strategy.

BCX regards Africa as an important strategic component of its overall operation.

The company has confirmed that the proposed move with Telkom has already been given the green light from the Namibian Competition Commission, The Tanzania Fair Competition Commission, The Competition Authority in Botswana and The Common Market for Eastern and Southern Africa Commission (COMESA).

The merger represents a convergence of IT and telecommunications streams, which Mophatlane believes is a natural progression in the market and a result of challenges facing telco mobile operators, including declining margins in voice.

Additionally, South Africa's mobile and telecommunications services space has been in the headlines because of labour issues. Mophatlane is not overly concerned about the existing stand-off between Telkom and trade unions, and explains that BCX and Telkom are two different businesses and that there are clear roles that have been pre-determined and a level of autonomy has been agreed upon ahead of the merge.

A recent press release from BCX states that Telkom has indicated its intention to keep BCX as an independent subsidiary with its existing brand and to retain the current leadership structure.

"We are two different businesses, even though we'll be part of one group. I think the key for us is that Telkom presents BCX an opportunity to grow its customer base ... access to Telkom's customers where we are able to offer what we offer in terms of a differential as an IT services provider. So, we see growth opportunities... we are an enterprise service provider, we do not touch the consumer. It is all about efficiencies in our game, it's all about cost reduction," says Mophatlane.

"Post the merger, BCX remains an independent subsidiary of Telkom ... we'll take over the cybernest, which is the data centre stuff for Telkom... so we'll take about 600 odd staff in BCX. What is key for us is that we don't want to be managing what we don't know, so we not going to be managing business units that we do not have the expertise to manage. We currently manage over fifty data centres for customers and seven of our own," he adds.

Knowing its core business will remain intact and there is continuity in terms of leadership, and the opportunity to apply its expertise to the partnership, BCX believes the match is a game changer in the local IT industry.

Mophatlane expects a decision from the Competition Tribunal by the end of July and says to date there has only been one objection raised.

Africa awaits

BCX plans to expand its current footprint in Africa, which includes markets such as Botswana, Kenya, Mozambique, Namibia, Nigeria, Tanzania and Zambia.

While the company's pan-African strategy remains on track, Mophatlane says the business has to be more realistic in terms of growth prospects and expectations in terms of aggressive revenue growth in specific regions outside South Africa.

He refers to the Nigerian market and issues that have impacted on market growth, including a change in government, delay in elections, security threats from Boko Haram, that have all culminated in a general recent slowdown.

"Each geography that we operate is unique, it has its own challenges like we have our challenges here in South Africa... so our growth around our pan-African will be conservative in the sense that we will follow the client , we will work closely with South African clients who are operating outside of SA and we will support them. If there happens to be an acquisition to be made that is in line with our strategy, we will look at those."

Mophatlane says while the pan-Africa strategy is important, there is a need to "bed down" the Telkom deal before aggressively pursuing this strategy.

"Telkom has a number of points-of-presence across the African continent, which together with the capabilities of our existing in-country communications services partnerships and Business Connexion's infrastructure and software capabilities, could provide compelling cloud services offerings," he adds.

In the short term Ghana , Ethiopia and Zimbabwe have been identified as strong possible regions to engage.