Hawaiian Telcom sees wireless backhaul customers scaling up speeds

Hawaiian Telcom said it is seeing more of its wireless backhaul customers ramp up their speeds from an initial 50 Mbps to 100 and even 200 Mbps.

Eric Yeaman, president and CEO of Hawaiian Telcom, told investors during the fourth-quarter earnings call that requests for more bandwidth at towers is helping the telco grow wireless backhaul revenue.

"Future proof that fiber bandwidth to the cell sites are easily increased to provide wireless carriers more capacity, which can drive a meaningful increase in revenue over time," Yeaman said during the fourth-quarter earnings call, according to a Seeking Alpha transcript. "The majority of initial cell sites we built were provisioned with 50 megabit circuits, but now approximately 75 percent of our existing 411 cell sites are 100 megabits or higher and 37 percent are 200 megabits or higher."

In 2014, the telco continued to make progress in the wireless backhaul front, completing the buildout of fiber to 411 towers, which it says equates to annualized revenue of about $6 million.

Yeaman said it also has "another 73 sites under contract to build and we are currently pursuing a number of additional sites."

Growth in special construction related to new fiber-to-the-tower sites helped drive up Hawaiian Telcom's fourth-quarter 2014 wholesale revenue year-over-year by $300,000 to $14.7 million.

Given the pressures of declining switched access revenue and the migration of wireless customers off of copper-based TDM to fiber-based IP/Ethernet services, fourth-quarter 2014 wholesale revenue, which consists of wholesale carrier data revenue and switched access revenue, remained flat year-over-year at $16 million.

But wireless backhaul is just one form of new wholesale potential for the company.

Another wholesale opportunity could come from its participation in the Southeast Asia--United States (SEA-US) consortium, which is building a trans-Pacific submarine cable system, connecting Indonesia, Philippines, Guam, Hawaii and California.

"In the wholesale channel, we will continue to take advantage of the fiber to the tower opportunity and we expect construction on the new Trans-Pacific submarine cable system to begin shortly," Yeaman said. "With the start of construction, we will be able to negotiate with our carrier and enterprise customers on capacity sales agreements. We have already received strong indications of interest for purchasing such capacity."

For more:
- see the earnings transcript (sub. req.)

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