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.
“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.