Anittel has completed the sale of its hosting division to BigAir for $6.5 million.
The sale, which was announced on 20 December, will inject cash into Anittel, which last year reported a net loss after tax of $7.3 million.
Peter Kazacos told CRN this morning that along with the injection of funds, Anittel sold the business because it was too costly to achieve the requisite scale in the carrier space.
"Although we see telco as something we should be selling along with IT services, to be a carrier ourselves in current environment, you need to have a larger scale. We were a subscale carrier. We weren't at the level to continue to invest in the carriage side as our competitors in that space," he said.
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In contrast to Anittel's downbeat results, BigAir increased net profit after tax by 5.5 percent in the 2012-13 year to hit $5.5 million off the back of a 31 percent increase in revenue to $29.9 million.
The carrier business is expected to generate $11-$12 million of revenue and should add more than $2 million in annualised earnings to BigAir.
Changes "all the way up"
Kazacos said "a large number" of Anittel staff had moved to BigAir as part of the sale, as well as two sites in the Gold Coast. He conceded there had been redundancies due to overlap, but "can't comment on the numbers at the moment".
It is thought that the cutbacks included senior staff; Kazacos wouldn’t provide details, other than to say: "With a large chunk [of the business] coming out, we need to rationalise all the way up and we made the decisions to do that."
Kazacos hinted at more changes to come. "We will be making some interesting announcement around stuff going forward. All I can say is [the sale] is concluded. I am happy, it has been done well, the relationship is strong between us and BigAir and we will be able to continue to provide telco products to our customers and a larger variety of products, because it incorporates products that BigAir has in their arsenal."
Anittel will continue to resell its former voice and data services through a channel partnership agreed with BigAir.
BigAir's shares fell 6.5 percent on the news to 73c. Anittel has traded at under 1c since February 2011.