Telecom Corp has sold its Australian AAPT unit for $450 million to ASX-listed internet service provider, TPG Telecom, beating initial expectations of what the unit would go for.

The Macquarie-managed-managed sale is expected to be completed on February 28, and was at a multiple of about 6.4 times AAPT’s recurring annualised earnings before interest, tax, depreciation and amortisation of $NZ70 million ($A64.10 million), Telecom said in a statement.

When Telecom announced the unit was up for sale in October, Australian media reported AAPT could fetch as much as $403.5 million.

The proceeds will be used to repay debt in the first instance, and Telecom will provide more guidance on where the remainder will go at its first-half profit announcement next February.

Under the new leadership of chief executive Simon Moutter, Telecom has been refocusing its strategy to targeting mobile and data revenue and backing away from being a simple infrastructure player.

“The sale of AAPT is consistent with this strategy and with our desire to focus principally on our New Zealand operations and on the needs of New Zealand customers,” Moutter said.

“AAPT is performing well. David Yuile and his management team have done an impressive job during the last three years to simplify, stabilise and reshape the company.”

Telecom sold its AAPT consumer division to ASX-listed iiNet for $60 million, leaving the New Zealand company with wholesale customers for its network infrastructure. The Australian unit has been a perennial underperformer for the company since it spent $2.3 billion to acquire AAPT at the height of the dot-com boom in 1999 and 2000.

The AAPT unit reported a 16 per cent drop in earnings to $NZ74m in the year ended June 30 on a 22 per cent slump in sales to $NZ515m, with the decline heightened by a stronger kiwi dollar.

The unit lost customers amid market consolidation in the Australian Federal government’s national broadband network roll-out.