Shares in Superloop (ASX:SLC) dipped 3.66% on Feb. 11 after the network provider warned of a potential $4 million annualised hit to its gross margins.
The forecast follows a major consolidation in the sector, as Aussie Broadband (ASX:ABB) moves to acquire AGL Energy's (ASX:AGL) telecommunications arm in a $115 million scrip-based deal.
The financial fallout stems from a shift in wholesale traffic; AGL's subsidiary, Southern Phone company, currently relies on Superloop for network and backhaul services under a contract slated to run until 2029.
However, with AGL migrating its subscriber base to Aussie Broadband's proprietary network—a move expected to wrap up by the first half of FY27—Superloop expects a significant reduction in service usage.
Despite the long-term contract, Superloop confirmed that a full migration by AGL would result in the multi-million dollar margin contraction.