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Sipho Maseko, CEO of Telkom
Telkom ICT Services business BCX will spin off its data center business into another Telkom subsidiary, Gyro, and the telecommunications group will then be able to seek outside investors.
That’s according to Telkom CEO Sipho Maseko, who said in an interview with TechCentral following the release of the group’s interim financial results on Tuesday that the idea is to create a “vendor-neutral” data center business. . He explained that the new business will be kept at a distance from Telkom, managed independently and will not make decisions that favor Telkom over third parties who will be encouraged to lease space in the facilities.
Vendor-independent data center operators, such as Teraco Data Environments, South Africa’s largest, are often not owned or aligned with telecom operators. Rather, they act as neutral environments in which operators, Internet service providers, and content companies can freely interconnect with each other.
Maseko said Telkom has made significant moves to separate key businesses from its core, including Openserve (its wholesale division, where it has begun limited structural separation) and Gyro, its mast and tower and property management business, which is actively leasing space. at its highest point. sites to other service providers.
“Openserve is not even five years old as a brand. Before that, we were never trusted to be agnostic with all retailers, ”Maseko said, referring to third-party Internet service providers that use Telkom’s fixed line infrastructure to deliver broadband services to end users. “We have been able to achieve that credibility in the market. The same goes for the masts and towers. We created a separate brand (Gyro) and enforced neutrality on that supplier. “
Second class of assets
He said the data center business, yet to be named, will be the second class of assets hosted under Gyro.
“Gyro has built enough credibility to be neutral with respect to suppliers. BCX will be a tenant; maybe Openserve is a tenant. Transparency is something we are committed to. Over the past few years, we’ve shown that you can take our word for it, ”said Maseko.
BCX employees directly involved in managing the data center will be transferred to the new business; employees who provide IT services to customers using the data centers will remain at BCX.
Maseko said that by the end of Telkom’s financial year in March, he wants to have completed the “separation” of the data center business. Then you are likely to seek outside investors. The amount of equity you sell in the new business will depend on the advantage Telkom believes there is.
“The timing of our exit will be consistent with our value release strategy. If our shareholders will be better off if we sell more now, that’s what we will do. If our shareholders will be better off if we sell a part now and another part in five years, we will also consider it, ”he said.
However, he added that selling a stake in the data center business will involve “much more than money” and that there must be “strategic alignment.” Prospective investors should be intent on reinvesting in it and growing the business, he said. – © 2020 NewsCentral Media
