Hawaiian Telcom reports $5.5 million in profits

Hawaiian Telcom said yesterday it posted a  $5.5 million profit in the first quarter as it boosted its number of high-speed Internet subscribers and slowed the loss of land-line customers.

The first-quarter profit compared with a $23.3 million loss in the year-ago period when the state’s largest telephone company was working its way through bankruptcy.

Hawaiian Telcom increased the number of high-speed Internet customers by 3,900, or 4 percent, to 101,200 in the January-through-March period. Revenue from the broadband business rose to $8.8 million, up 2.5 percent from the same quarter a year earlier. The increase in customers was partially offset by a reduction in the average rate charged.

The number of land-line telephone customers, meanwhile, fell by 6 percent in the first quarter, down from a 7.3 percent drop for the comparable period a year earlier. In addition, the company said it added 4,500 residential "bundles" combining telephone and Internet service in the first quarter.

"Overall, I am pleased with our results for the first quarter and the solid progress we continue to make in many of our key operating metrics," Eric Yeaman, Hawaiian Telcom’s president and chief executive officer, said in a telephone conference call with analysts.

The company is moving forward with its plans to offer television programing over its telephone lines and hopes to receive a cable license from the state Department of Commerce and Consumer Affairs by the end of June, Yeaman said. Public hearings last month on Hawaiian Telcom’s applications "were uneventful, and we’re now in the final stages of negotiating the franchise agreement with the DCCA," Yeaman said.

"We continue to add customers to our pilot program and provide live service to them and remain ready to commercially launch service," he said.

Hawaiian Telcom’s planned video service will provide consumers with an alternative to the cable TV product offered by Oceanic Time Warner, which dominates the local market. Yeaman said the company will compete by packaging its television service with other Hawaiian Telcom products.

"The future launch of IPTV (Internet protocol television) will allow us to enhance the attractiveness of our bundle offer and the value we can deliver in the marketplace," he said.

Among its business customers, Hawaiian Telcom continued to "gain traction" in Internet-based services such as ethernet, virtual private network and voice-over Internet products, according to Yeaman.

Capital spending totaled $15.5 million in the first quarter, up 17 percent from the year-ago period due primarily to the deployment of fiber-optic cables to various wireless cellular sites to support the upgrade to 4G, the company reported.

Hawaiian Telcom shares closed down 25 cents at $27.75 yesterday in over-the-counter trading.

Yeaman said the company is moving ahead with plans to list its shares on Nasdaq. "I’m hoping we’re less than a few weeks away," he said.