The sale is designed to enable People Telecom to deliver on its strategy to drive revenues and profit focused on its core small-to-medium-enterprise, ADSL and mobiles businesses.
The transaction comprises People Telecom's high-speed optical-fiber data ring around the Perth CBD and a data co-location and interconnect center as well as customer revenues of $6 million per annum.
Agreements covering the acquisition were signed in Sydney and Perth by People Telecom and Amcom.
The expected completion date of the transaction is March 31, 2007.
People Telecom CEO, John Stanton, welcomed the commercial benefits it will generate.
"This transaction aligns to our strategic aims and will allow People Telecom to focus on profitable growth in our core businesses," Stanton said.
"It will add horsepower to our growth in provision of leading-edge voice and data solutions to SME customers across Australia and the further expansion of our strong ADSL and Mobiles businesses at both the retail and wholesale level."
Stanton stressed that the sale did not represent any reduction in People Telecom's ongoing commitment to its SME and consumer customers in Perth and Western Australia.
"We will continue to serve our SME and consumer customers in Western Australia and push to further grow our market share in those important customer segments," he said.
"The transaction with Amcom includes supply agreements to ensure that People Telecom has full capability to continue serving SME data requirements.
"The sale of our Perth corporate data business to Amcom will generate stronger operating margins and increased market share within our core customer segments."
"Amcom and People Telecom already enjoy a strong commercial relationship and we see opportunities to further build on this in the future through bilateral supply arrangements and other cooperation."
Stanton said the two companies will work together over the coming months to ensure a smooth transition of corporate customers onto the Amcom network, and to manage the relocation of its national network operating center from Perth to Sydney.