Hawaiian Telcom (Nasdaq: HCOM) reported that Q3 2013 consumer revenues rose 2.4 percent to $35.3 million due to an increase in IPTV and broadband subscribers.
As seen in previous quarters, revenue growth in video and broadband services continued to offset declining legacy voice services. The telco said that combined, these services now represent 30 percent of consumer revenue, up from 22 percent year-over-year.
"We have brought a new level of competition and choice to the people of Hawaii with our next-generation Hawaiian Telcom TV service, now serving over 15,000 video subscribers and supporting strong HSI subscriber growth as more customers bundle services," said Eric K. Yeaman, Hawaiian Telcom's president and CEO, in the earnings release.
Here's a breakdown of the telco's key metrics:
Consumer revenue: In the consumer segment, the story continued to focus on video and High Speed Internet (HSI) service. Video service revenue grew to $3.7 million, up from $1.5 million in the same period a year ago. It added 7,300 subscribers, ending the quarter with a total of about 15,800 customers. During the quarter, it enabled 11,000 additional households with IPTV, increasing the number to 111,000. Hawaiian Telcom TV average revenue per user (ARPU) was up approximately 22 percent year-over-year.
HSI revenue rose 4.3 percent year-over-year to $0.9 million and ended the quarter with a total of 90,250 HSI subscribers. As of the end of September, about 56 percent of all video subscribers had a triple play bundle and nearly 89 percent had double, or triple-play bundles.
However, Hawaiian Telcom said that increases in HSI services driven by next-generation consumer video and HSI services "were partially offset by declines in legacy consumer access and long distance lines of 8.5 percent and 7.5 percent, respectively."
Business revenue: This unit's revenue rose 2.7 percent to $42.7 million year-over-year due to the additional revenue it received from its acquisition of Wavecom. Data revenue, excluding Wavecom-related revenue, rose 11 percent year-over-year due to higher demand for IP-based services such as switched Ethernet, IP-VPN and dedicated Internet access (DIA).
All of these gains were partially offset by a $1.5 million year-over-year decrease in equipment and managed services revenue and the usual year-over-year decline in legacy business access and long distance revenues.
Wholesale revenue: Driven by a decline in switched carrier access and overall access line losses, wholesale revenue declined 6.6 percent year-over-year to $16.5 million. Carrier data revenue also declined $0.8 million year-over-year to $14.9 million, a factor it said was due to the elimination of previously recognized revenue that related to services provided to Wavecom. Finally, switched carrier access revenue declined $0.6 million year-over-year to $1.6 million.
Overall company revenue was $97.7 million, up 1.1 percent year-over-year from $96.6 million in Q3 2012. Growth in video, HSI, and revenues related to the Wavecom acquisition helped to more than offset the impact from a decrease in equipment and managed services revenue and a 2.3 percent decline in access lines, which included Wavecom lines.
Shares of Hawaiian Telcom were listed at $27.40, up 32 cents, or 1.18 percent, in morning trading on the Nasdaq stock exchange.
- see the earnings release
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