Home Telecoms & NBN amaysim exits broadband market, sells customer base to Southern Phone
amaysim exits broadband market, sells customer base to Southern Phone Pixabay Featured

Mobile virtual network operator amaysim has sold its fixed line broadband customer base to regional telecommunications operator Southern Phone for about $3 million in a transaction expected to be completed by the end of the month.

The company said in a statement to the ASX that the decision followed a review of its broadband business was aimed at maximising shareholder returns.

Chief executive and managing director Peter O'Connell said: "The broadband team has worked very hard and done an outstanding job creating industry leading products and processes. The decision to exit broadband was not easy and was made in light of unsustainably high wholesale costs, intense competition and the need to allocate the company’s capital appropriately.

“This transaction will enable the company to simplify its operating structure, defend and grow its core mobile and energy businesses, and invest in its technology platforms. We will continue to explore additional products and services that we can offer to our significant mobile subscriber base.

"However, we will do this in a way that is profitable, delivers a great customer experience and aligns with our asset-light business model.”

amaysim said it would enter the broadband market in July 2016 after buying the Internet service provider, Australian Broadband Services for $4 million.

In June last year, the company said it would offer its customers the first month free in a bid to snag a share of the NBN market.

Southern Phone is one of the larger providers of fixed line, mobile and Internet communications services in regional Australia. It plans to migrate amaysim’s fixed line broadband customer base onto its platform in November 2018. Customers will be notified by amaysim and no disruption is expected.

amaysim said it would recognise a non-cash impairment of approximately $7 million pre-tax and write down the carrying value of the broadband assets to zero. The impairment charge will be finalised after the transaction is completed and will be removed from underlying performance in the 2019 financial year results.

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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