Hawaiian Telcom continued to ramp up its IPTV service, adding approximately 8,600 subscribers to offset ongoing declines in its legacy consumer POTS voice business.
Due to its gains in video and high speed Internet (HSI) data services, overall consumer revenue rose 3.4 percent to $35.8 million.
Revenue growth in video and HSI services continues to more than offset lower revenue from legacy services, and combined video and HSI services now represent 34 percent of consumer revenue, up from 25 percent in the same period a year ago, and 19 percent in the same period two years ago.
"The reach of our video footprint expanded to 130,000 households on Oʻahu in the first quarter with 48% of those households capable of connecting their homes directly to our ultra-fast fiber-optic technology," said Eric K. Yeaman, Hawaiian Telcom's president and CEO. "This allows these households to take advantage of Hawaiʻi's fastest Internet service featuring download speeds of 100Mbps, 300Mbps and 500Mbps, which we launched in the quarter."
Here's a breakdown of the telco's key metrics:
Broadband and Video: Consumer HSI revenue also was up from the same period a year ago, led by a 2.2 percent year-over-year increase in consumer HSI subscribers to approximately 91,400, which was primarily driven by HSI pull-through rates from new video subscribers and standalone HSI subscriber additions. It also reported that about 55 percent of all of its video subscribers subscribed to a triple play bundle and about 91 percent had double- or triple-play bundles. The company said that increases in next-generation consumer and HSI services more than offset legacy revenue declines related to consumer access and long distance line losses of 8.4 percent and 7.3 percent, respectively.
Likewise, video service revenue grew to $4.8 million for the quarter, up from $2.2 million in the same period a year ago, driven by the addition of approximately 8,600 subscribers for a total of about 20,300 subscribers at the end of the first quarter. During the quarter, the telco enabled 10,000 additional households with IPTV services, increasing the total number of households enabled to 130,000 with 48 percent of those households capable of connecting directly to the company's fiber to the home (FTTH) technology.
Business segment: Hawaiian Telcom's acquisition of SystemMetrics continued to have a positive effect in the first quarter. Revenues rose 4.9 percent to $42.5 million due to $2.2 million of incremental net revenue added as a result of the SystemMetrics acquisition. Business data revenue increased 7.1 percent year-over-year driven by higher demand for IP-based data services. However, these increases were partially offset by a $0.9 million year-over-year decrease in equipment and managed services revenue and the year-over-year decline in legacy business access and long distance revenues.
Wholesale segment: Wholesale revenue was $15.9 million, down $1.3 million from the first quarter of 2013. Due to about $0.8 million of one-time backbilling and circuit termination charges realized in the year-ago period, wholesale carrier data declined $1.1 million year-over-year to $14.4 million.
Overall revenue was $97.1 million, up 1.2 percent year-over-year from $96 million in the first quarter of 2013. The service provider said that growth in video, HIS and $2.2 million of incremental net revenue related to the SystemMetrics acquisition more than offset the impact from a $0.9 million decrease in equipment and managed services revenue, solely related to lower customer premise equipment sales, and a 5.4 percent decline in access lines.
Shares of Hawaiian Telcom were listed at $26.00, down 6 cents or 0.23 percent, in Thursday morning trading on the Nasdaq stock exchange.
- see the earnings release
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