Hawaiian Telcom extends 1 Gig service to rural markets with CAF-II funds

Hawaii

Hawaiian Telcom is bringing its 1 Gbps FTTH service to homes in Hawaii Island’s Puʻu Lani Ranch subdivision and the surrounding Puʻuanahulu area using funds from the FCC’s CAF-II program.

RELATED: Hawaiian Telcom’s Q3 internet services revenue takes hit on promotional pricing

Puʻu Lani Ranch is the first 1 Gbps deployment Hawaiian Telcom is making that uses the FCC’s CAF-II support since announcing in 2015 that it would accept $26 million in CAF-II funding to extend 10/1 Mbps capable broadband service to over 11,000 unserved rural locations. The service provider has been extending its broadband infrastructure on Hawaii Island, leveraging CAF-II funds and its own capital.

Leveraging CAF Phase I support of about $1.4 million, Hawaiian Telcom has deployed broadband internet services to over 1,800 locations on Hawaiʻi Island. These locations are within areas that include Ainaloa, Aliʻi Kane, Fern Acres, Fern Forest, Glenwood, Hawaiian Acres, Kaiwiki and Miloliʻi.

After launching 1 Gbps service in 2015, Hawaiian Telcom has enabled 125,000 homes and 5,600 businesses statewide and continues to expand availability to new locations every month.

Similar to fellow telco CenturyLink, Hawaiian Telcom is seeing the so-called halo effect in which the presence of 1 Gbps is driving more customers overall to purchase higher speeds.

The service provider said during its third-quarter earnings call that the number of customers purchasing 21 Mbps to 1 Gbps speeds increased by 21 percent over the last year and 66 percent over the last two years. The company ended the third quarter with approximately 91,000 internet subscribers, and customer adoption of higher speed offerings has continued to increase. 

Hawaiian Telcom continues to see year-over-year subscriber growth and increasing customer adoption of its higher speed offerings on Oahu, where it has built out its FTTH network.

While it’s unclear whether consumers will adopt 1 Gbps service in the more rural parts of Hawaiian Telcom’s footprint, the service provider noted during its third-quarter call that it is seeing a reduction in churn and an increase in TV penetration.

In its FTTH markets, Hawaiian Telcom said that TV penetration in its fiber to home mature footprint which is at least four years old is 34 percent and growing.

“We are confident that we can continue to increase penetration market share in these areas with on growing integrated marketing efforts aimed at educating customers on the benefits in fiber and to enhance segmentation and targeting,” said Scott Barber, CEO of Hawaiian Telcom, during the third-quarter earnings call, according to a Seeking Alpha earnings transcript.

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