diff --git a/patches/systemvm/debian/config/etc/init.d/cloud-early-config b/patches/systemvm/debian/config/etc/init.d/cloud-early-config
index d4af3a95755..258e71e24a9 100755
--- a/patches/systemvm/debian/config/etc/init.d/cloud-early-config
+++ b/patches/systemvm/debian/config/etc/init.d/cloud-early-config
@@ -597,6 +597,11 @@ setup_vpcrouter() {
     setup_vmware_extra_nics
   fi
 
+  if [ -f /etc/hosts ]; then
+    host=`hostname -s`;
+    grep -q $host /etc/hosts || echo "127.0.0.1 $host" >> /etc/hosts;
+  fi
+
     cat > /etc/network/interfaces << EOF
 auto lo $1
 iface lo inet loopback
@@ -814,18 +819,9 @@ change_password() {
 	fi
 }
 
-set_etc_hosts() {
-  if [ -f /etc/hosts ]; then
-    host=`hostname -s`;
-    grep -q $host /etc/hosts || echo "127.0.0.1 $host" >> /etc/hosts;
-  fi
-}
-
 start() {
   # Clear /tmp for file lock
   rm -f /tmp/*.lock
-  # fix lookups for our hostname (iptables, etc)
-  set_etc_hosts
   local hyp=$(hypervisor)
   [ $? -ne 0 ] && log_it "Failed to detect hypervisor type, bailing out of early init" && exit 10
   log_it "Detected that we are running inside $hyp guest"