Credit: Dreamstime
Telecommunications provider Amaysim Australia has entered into an asset sale deed to sell its fixed line broadband customer base to Southern Phone.
The $3 million deal will be payable in two tranches and the sales is expected to complete by the end of October.
In July 2016, the publicly-listed telco entered the broadband market through the $4 million acquisition of Australian Broadband Services (AusBBS), $1 million more than the telco is getting for selling the business now.
"The exit of broadband will enable the company to simplify its operating structure, defend and grow its core mobile and energy businesses, and invest in its technology platform," the company told shareholders on 26 October.
The telco has also closed the devices business.
“The broadband team has worked very hard and done an outstanding job creating industry leading products and processes," said Peter O'Connell, CEO at Amaysim.
"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,” he said.
Southern Phone, an Australian telecommunications provider, will migrate Amaysim’s fixed line broadband customer base onto its platform in November 2018. Affected customers will be notified by Amaysim, who should not experience any disruption to their service.
Amaysim expects to 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 completes and will be removed from underlying performance in the results for the 2019 financial year.
