Hawaiian Telcom TV customers rise twofold

Hawaiian Telcom through the past year more than doubled the number of subscribers to its television service on Oahu to 13,600 households and has expanded the reach of its fiber-optic lines to about one-third of the island’s homes.

Hawaiian Telcom crews have been laying fiber-optic cable around Oahu to provide the bandwidth needed to support the TV service it began two years ago. The company so far has installed enough fiber-optic capacity to “enable” 100,000 of Oahu’s estimated 300,000 households to receive the service, company officials said as part of Hawaiian Telcom’s quarterly earnings report. The company said its goal is to enable an additional 50,000 homes a year.

Growth of the TV service, high-speed Internet subscribers, and revenue related to its acquisition of Wavecom Solutions Corp. were major revenue drivers for Hawaiian Telcom in the second quarter.
However, the early retirement of debt and several other one-time factors curbed the company’s profit in the quarter compared with the same period a year earlier.

Hawaiian Telcom reported net income of $4 million, or 36 cents a share, in the April-to-June quarter, down from $5.5 million, or 51 cents a share in the second quarter of 2012. Revenue grew by 2.4 percent to $97 million in the second quarter from $94.7 million a year ago, Hawaiian Telcom reported.

Although Hawaiian Telcom has begun to expand the marketing effort for its TV service, the company is still relying predominantly on a direct mail and door-to-door campaign in an attempt to reach only subscribers who have the capability to receive the service, CEO Eric Yeaman said in a conference call with telecom industry analysts.

Hawaiian Telcom expanded its marketing toward the end of the April-to-June quarter to include targeted advertising in some communities and, more recently, radio ads, company officials said.

“We’re going to start to evaluate how that goes, and then in the fourth quarter consider whether we change that strategy. It’s still a balance between making sure that we don’t generate calls that end up disappointing customers,” Yeaman said.

State regulators approved Hawaiian Telcom’s license to provide TV service in 2011, clearing the way for it to compete with Oceanic Time Warner, which controls an estimated 94 percent of the cable TV market on Oahu.

Revenue from the TV service and high-speed Internet installations is helping offset declines in Hawaiian Telcom’s traditional land-line telephone accounts. The company had 394,412 residential, business and public land lines at the end of June, down from 402,235 at the end of June 2012.

The growth in cellphone use in the past decade has cut into traditional land-line business across the country.

Hawaiian Telcom’s predecessor, Verizon Hawaii, had more than 700,000 land-line accounts before it sold the company to the Carlyle Group in 2005.