Network operator Superloop has announced plans to retire its non-core cloud managed services unit.
The publicly-listed company informed shareholders on 1 August that there will be a 30 per cent decline in its services segment revenue as a result of the performance of the unit.
The cloud managed services unit provides outsourced IT to small and medium enterprises. It has historically contributed to approximately 10 per cent of Superloop's margin but has been declining during the past year.
In February, Superloop posted a decline in the services segment's revenue from $18 million down to $14.1 million in the first half of FY19.
This was attributed to the discontinuation of low margin equipment and software reselling, which reduced revenues by $2 million.
Superloop said at the time it was rationalising its product set to ensure capital is properly allocated and to have a leaner organisation focused on "leveraging connectivity assets".
A spokesperson for the company told ARN that since February Superloop has not sold any further cloud managed services to customers and is in the process of transitioning out of that business.
"There is no firm time-frame in which it will be fully phased out and we continue to support existing customers," the spokesperson told ARN.
Superloop said FY19 has been a transitional year for the business and with challenges.
"The integration of our acquisitions and teams with the simplification of processes and systems was a necessity in order to move forward and provide bandwidth-intensive customers across Asia Pacific a differentiated and compelling service offering," Superloop CEO Drew Kelton said.
"I am extremely proud of the efforts of the entire 300-strong Superloop team who have tackled these challenges voraciously, in a year where the business has delivered two major infrastructure programs for customers."