Hawaiian Telcom has enabled a total of 202,000 households with fiber-based broadband on O’ahu, meeting the targets for its consumer fiber build program.
Out of this figure, 63% are capable of using fiber-to-the-premises (FTTP) technology. During the quarter, Hawaiian Telcom enabled an additional 1,000 homes with fiber-based broadband services.
At the same time, the service provider has also enabled nearly 7,000 businesses, 1,100 commercial buildings and 500 cell towers throughout the state with fiber.
Scott Barber, president and of Hawaiian Telcom, said in the earnings release that its fiber investments will enable it to meet business and consumers’ escalating broadband and IP services desires.
“Demand for broadband capacity and IP services is expected to grow exponentially in the coming years,” Barber said. “With the strategic investments we’ve made in our fiber network and systems, we are poised to leverage the foundation we’ve built and take advantage of the opportunities that these investments have created for our company and our community today and into the future.”
Here’s a breakdown of Hawaiian Telcom’s key metrics:
Consumer: Driven by the growth of TV and fiber-based broadband services, fourth quarter consumer revenue was $35.1 million, compared with $36.3 million in the fourth quarter of 2015. Fourth quarter consumer strategic revenue increased 1.5% year-over-year and now represents half of total consumer revenue, up from 48% in the same period a year ago.
Hawaiian Telcom TV continued to be the driver of revenue growth in the consumer channel, growing 15.9% year-over-year to $10.7 million for the quarter and has become a $43 million and growing annualized revenue stream. Video subscribers grew 15.8% during the same period and the company ended 2016 with approximately 41,600 subscribers in service. Hawaiian Telcom TV penetration of households increased to 20.6% at the end of 2016, up from 18.9% at the end of 2015.
Internet services revenue declined $1.2 million from the same period a year ago due to continued promotional pricing. The company ended 2016 with about 91,100 internet subscribers and customer adoption of higher speed offerings has continued to grow. Hawaiian Telcom noted that the number of customers that subscribe to speeds between 21 Mbps to 1 Gbps rose by 20% over the last year. The number of triple-play customers increased 6.2% year-over-year and its internet attachment rate continues to be high. As of the end of 2016, about 95% of all video subscribers had subscribed to a double- or triple-play bundle.
However compelling the next-gen services growth was, it was more than offset by the year-over-year revenue decline in consumer legacy voice and low-bandwidth copper internet services.
Business: Business revenue remained flat year-over-year at $44.4 million. Taking out the nonrecurring revenue associated with a large one-year government agency contract recognized in the fourth quarter of 2015, total business revenue for fourth quarter 2016 would have increased 1.7% year-over-year. As customer demand for high-bandwidth IP-based data services such as Ethernet, dedicated internet access, high-bandwidth fiber internet and BVoIP continued to rise, data services revenue rose 6.2% year-over-year. Hawaiian Telcom noted one of the measures of this trend is the increase in BVoIP lines, which grew 14% year-over-year to approximately 19,100 lines, offsetting a third of total legacy voice access line decline.
Hawaiian Telcom noted that it saw an uptick in data center services revenue. Data center services grew 5.3% year-over-year for the fourth quarter, driven by increased sales of network services and security solutions.
In order to support the growing demand for bandwidth and cloud adoption, the telco deployed its fiber GPON technology to further leverage its next-generation network to 1,100 small business addresses, providing customers access to 1 Gbps internet service. This brings Hawaiian Telcom’s total fiber-GPON-enabled business addresses to 6,800 at the end of 2016.
Fourth quarter business strategic revenue increased 6% year-over-year and now represents 38% of total reported business revenue, compared with 36% in the same period a year ago. Revenue increases from business strategic services and equipment and related services offset the year-over-year decline in business legacy voice services.
Wholesale: Fourth quarter wholesale revenue totaled $13.3 million, compared with $14.1 million in the fourth quarter 2015. The revenue growth in Ethernet services on multi-year contracts was more than offset by the revenue decline from certain wholesale customers disconnecting low-bandwidth TDM circuits, as well as reduction in rates for certain wireless carriers in exchange for extended terms.
Financials: Hawaiian Telcom reported $96.8 million in revenues for the fourth quarter and $393 million for full year 2016. The company noted increases driven by growth from video, high-bandwidth Internet, and IP-based business services were offset by revenue declines from legacy voice and low-bandwidth Internet services.