The Tech Pacific Group yesterday sold the shares of its two telecommunications organisations - switch telecommunications and Frame Relay (formerly known as Interlink Services Australia) - to Telegroup for a total of $36 million.
Industry observers suggest logic prevailed and the Group decided to stick to its "bread and butter" business of distribution rather than plunge headlong into the competitive, yet lucrative, telecomms market.
"We are pleased with the companies that we have built but as they go on to grow quickly as telecommunications companies we decided that we should stay focused on out core business of distribution," Graham Pickles, Tech Pacific Holdings' managing director.
So quickly in fact that the combined revenues for the two companies significantly outweigh those of Telegroup. Figures from analyst organisation, Paul Budde Communications show that Telegroup turned over less than $10 million in Australia in 1997 while the combined revenues of switch and Frame Relay totalled almost $60 million.
Frame Relay was established by the Group in 1996 to service the data traffic generated by Tech Pac's 11 operating subsidiaries in nine countries and then provide this service to third party customers. While switch telecommunications offers a range of voice and data gear including calling cards, call centre software, Internet access, frame relay and broadband services.
The two companies' voice and data network features Lucent's Definity voice switches along with Newbridge, Motorola and Frame Relay points of presence (POPs).
Pickles confirmed that switch telecommunications will continue to provide the virtual private networking for Tech Pac's voice and frame relay traffic along with traffic from the distributor's Web site.