Hawaiian Telcom reaches nearly 18% of households with IPTV

Hawaiian Telcom is making headway with its IPTV rollout, reporting that as of the end of the first quarter, it penetrated 17.9 percent of households with the service.

During the quarter, the service provider added nearly 1,600 TV subscribers, ending the quarter with about 29,700 subscribers.

As a result of the TV subscriber additions, Hawaiian Telcom's video service revenue grew to $7.5 million, up from $4.8 million in the same period a year ago. The telco's TV average revenue per user (ARPU) was up approximately 5.8 percent year-over-year. 

At the same time, Hawaiian Telco enabled 6,000 additional households with IPTV, increasing the total number of households enabled to 166,000, with about 57 percent of those households capable of using fiber-to-the-premises (FTTP) technology. 

Eric Yeaman, Hawaiian Telcom's president and CEO, said in the earnings release that ongoing expansion of its FTTP network, its TV service and broadband data "led to significant growth in our consumer channel, despite healthy competition in the marketplace."

Here's a breakdown of the service provider's key metrics:

Consumer: First-quarter consumer revenue was $37.5 million, up 4.8 percent year-over-year due to revenue growth from Hawaiian Telcom TV and high-speed Internet services. The telco said that 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 41 percent of consumer revenue, up from 34 percent in the same period a year ago, and 25 percent in the same period two years ago.

Led by a 1.8 percent year-over-year increase in consumer HSI subscribers to approximately 93,100 and a 7.3 percent increase in consumer HSI ARPU due to increased adoption of higher speed offerings, consumer HSI revenue rose year-over-year from the first quarter of 2014. Interestingly, as of the end of March, about 93 percent of all video subscribers had double- or triple-play bundles. However, HSI and TV revenue increases were partially offset by legacy revenue declines related to consumer voice access and long distance line losses of 9.5 percent and 9.1 percent year-over-year, respectively.

Business: Business revenue was $41.6 million, down from $42.5 million in the first quarter of 2014. The company said that growth from next-generation services, primarily from a 5.8 percent year-over-year increase in business data revenue and an 8 percent year-over-year increase in data center revenue, was more than offset by the year-over-year decline in legacy business access and long distance revenues. 

Similar to larger telcos like AT&T (NYSE: T) and Verizon (NYSE: VZ), Hawaiian Telcom said that with customer demand for higher bandwidth services and integrated communications solutions, next-generation services now represent 31 percent of business revenue, up from 29 percent in the same period a year ago, and 23 percent in the same period two years ago.

Wholesale: In the wholesale segment, revenue declined slightly to $15.6 million compared with $15.9 million in the first quarter of 2014.  Wholesale carrier data revenue remained flat year-over-year at $14.3 million. Switched carrier access revenue declined $0.2 million year-over-year to $1.3 million, attributable to both the overall decline in voice access lines and minutes of use and the impact of intercarrier compensation reform.

Overall company revenue remained flat at $97.1 million. However, adjusted EBITDA of $29.2 million was up 0.4 percent year-over-year.

Shares of Hawaiian Telcom were trading at $26.30, down 3 cents or 0.11 percent, on the Nasdaq stock exchange.

For more:
- see the earnings release

Special Report: Wireline telecom earnings in the first quarter of 2015

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