Hawaiian Telcom sees 64% jump in adoption of 100 Mbps to 1 Gbps fiber

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Hawaiian Telcom is seeing the fruits of its fiber broadband expansion as more of its residential customers adopt speeds of 100 Mbps to 1 Gbps.

The service provider noted that as of the end of September, the number of internet subscribers on packages with 100 Mbps to 1 Gbps fiber speeds grew 64.4% year-over-year. However, internet services revenue for the third quarter decreased $0.4 million year-over-year and is consistent quarter-over-quarter.

“Consumer Internet revenue and subscribers increased sequentially for the first time in eight quarters, driven by strong demand for our exclusive Fiber-to-the-Home Internet speeds,” said Scott Barber, Hawaiian Telcom’s president and CEO, in the earnings release.

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A big driver here was the build-out of fiber to more households. During the quarter, Hawaiian Telcom fiber-enabled 1,000 additional consumer households on O'ahu, including success-based bulk multi-dwelling units and greenfield single-family homes, bringing total NGN households to 205,000, or approximately two-thirds of total marketable households on O'ahu.

At the same time, Hawaiian Telcom continues to see more customers purchase double and triple-play service bundles. The service provider said that 95% of all video subscribers had subscribed to double- or triple-play bundles with internet service.


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“When combined with approximately 6,000 additional Internet subscribers on our NGN footprint that do not have TV service, the penetration rate in our NGN footprint is approximately 25%, an increase from 22% in the same period in the prior year,” Hawaiian Telcom said.

Here’s a breakdown of Hawaiian Telcom’s key metrics:

Consumer revenue: Hawaiian Telcom reported consumer revenue was $33.7 million, compared to $35.7 million in the third quarter of 2016. Revenue growth in the quarter from Hawaiian Telcom TV and high-bandwidth fiber internet services was more than offset by the year-over-year revenue decline in legacy voice and low-bandwidth copper Internet services. Third quarter consumer strategic revenue increased 4.6% over the last two years now represents 53% of total consumer revenue, up from 46% in the same period two years ago.

Business revenue: Third quarter business revenue totaled $41.9 million, down $2.9 million year-over-year primarily due to lower levels of equipment sales and the decline in legacy voice and low-bandwidth Internet services, as well as lower average revenue per unit on certain data services because of promotional pricing. These decreases were partly offset by continued growth in high-bandwidth fiber Internet services and a 13.3% year-over-year increase in business VoIP revenue, driven by strong demand for Hawaiian Telcom’s hosted voice and data bundle.

Wholesale Revenue: Hawaiian Telcom’s third quarter wholesale revenue was $12.6 million, down $0.9 million compared to third quarter 2016. Revenue from high-bandwidth, multi-year contract wholesale services including Ethernet, trans-Pacific fiber circuit capacity, and optical transport services rose 24.8% year-over-year and now represents 35% of total wholesale revenue, up from 23% in the same period two years ago. The company noted this revenue growth was offset by the revenue decline from certain wholesale customers disconnecting low-bandwidth legacy circuits on month-to-month service.

Financials: Hawaiian Telcom reported third-quarter revenue was $91 million, down year-over-year from $97.8 million in the third quarter of 2016. The company said the year-over-year change was primarily due to revenue growth in consumer video, business VoIP, and high-bandwidth fiber consumer and business Internet services being more than offset by revenue declines associated with legacy voice and low-bandwidth Internet services, as well as lower levels of equipment sales.

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