Victoria-based Datafast Telecommunications will sell its Warrnambool business system solutions arm to expand its Lucent ATM/voice over IP network nationally.
The Warrnambool operation, which sells PC and business solutions to regional small and medium businesses, has operated at a loss since the telco launched in September last year.
"The division was not successful because this is a tough space to operate in," said Chris Moore, CFO of Datafast. "Companies are not very driven when it comes to buying and selling of PCs and peripherals."
Through the sale -- a management buyout -- the telco will whittle its business down to two core divisions which will focus on Internet and networking services for regional corporates, Moore explained.
According to Kimley Wood, MD of Datafast, over $2.1 million was spent on the unsuccessful Warrnambool business. That extra cashlow will stimulate Datafast's concentration on Internet and networking services.
Primarily, Datafast will expand its western Victoria-based Lucent ATM/VoIP network throughout regional Australia. The national service will see Datafast offer national and international long distance telephone services through Datafast's own network at "reduced costs to what the major carriers offer", Wood said.
The Warrnambool arm will become Datafast's dedicated reseller for the region, selling business systems packages (mainstream software and hardware) and ISP services to SMBs, particularly to education and Government organisations.
The rationalised focus will see Datafast offer new telephony-based, wireless and broadband products over the next few years. "We wanted to focus on core products and get rid of distractions," Moore said.
Datafast will capitalise on an existing PC and ISP-buying channel in regional Victoria (15,000 dial-up clients) for its telephony-based offerings.
Moore claimed the Warrnambool sale would enable Datafast to compete with the likes of all major carriers AAPT, Telstra and Optus as well as all the major ISPs.