Hawaiian Telcom's (Nasdaq: HCOM) former troubles continue to be nothing more than a footnote in its history, but ongoing landline losses drove down Q3 revenues to $97 million, down from $101.5 million in Q3 2010.
Despite the decline, the service provider reported that it saw continued growth in IP-based business services and high speed Internet (HSI) services.
At the same time it reported that adjusted EBITDA was $30.9 million, up 6.5 percent year-over-year, a factor it attributes to lower operating expenses as a result of a number of cost cutting measures.
Here's a breakdown of its key unit results:
- Consumer services: As expected, Q3 2011 local services revenue was $36.9 million, a 5 percent decline from Q3 2010, which is due to a 5.6 percent year-over-year decline in access lines. However, this was an improvement over the 6.6 percent decline in the same period last year. The service provider said that the line loss improvement is attributable its customer retention and acquisition programs such as its "Price for Life" consumer bundle.
- Broadband and video: During the quarter, the service provider reported $8.9 million in broadband revenues, up 5 percent from the same period a year ago, driven by a 4.2 percent year-over-year increase in HSI subscribers. Although still a nascent service, Hawaiian Telcom reported video sales penetration of about 10 percent of marketable homes on Oahu.
- Business: Similar to broadband and video, enterprise data services rose 7.7 percent year-over-year. To make its offering more competitive, the service provider added Ethernet access delivery to its Dedicated Internet Access (DIA) service. In addition, 46 percent year-to-date of its business VoIP sales were on five-year contracts and 78 percent year-to-date small businesses have signed up for two year business service bundles.
- Wholesale: Like other incumbent service providers, Hawtel is also seeing the opportunity to target new wireless backhaul opportunities. In Q3, it completed building out fiber to 46 cell sites and has completed 141 cell sites year to date. It did, however, report that it saw more customers disconnecting TDM circuits sooner than expected.
Looking forward, Hawaiian Telcom expects total capex spending for 2011 to be consistent with 2010 levels of about $79 million.
- see the release
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