The company said today the rise to a $15.5 million profit from just under $13 million in the year-earlier quarter came partly from decreased costs, as the local telephone company ends a three-year re-engineering of its operations and customer service.

It also had higher income from the fees long-distance telephone companies pay for access in Hawaii. "The biggest driver of the (fees) increase is that people are using the phone more," said Dan Smith, a Hawaiian Tel spokesman. Minutes of use were up, he said.

Overall revenues of $153.5 million for the three months ended Sept. 30 were up only half a percentage point from $152.7 million a year earlier. But there were substantial differences among the various revenue sources.

For example, sales of local telephone service brought in $60.5 million, up only 1.5 percent from $59.6 million a year earlier.

Network access services, access to Hawaiian Tel's system by various long-distance carriers, brought in $37.2 million, up 9.8 percent from $33.9 million in the 1995 quarter.

However, toll services, the company's interisland business, had a 10.8 percent drop in revenues to $23.3 million, from $26.1 million a year earlier.

Smith said the increased use of discount calling plans contributed to the dip in income from toll services. "Also competitors are offering service and that is siphoning off some of the revenue."

The company lowered its total operating expenses 4 percent to $122 million in the latest quarter, from $127.1 million in the year-earlier period.

For the first nine months of 1996, the company had a net profit of $48 million, up 10 percent from $43.6 million in the 1996 period.

GTE Hawaiian Tel has only one shareholder, its parent GTE Corp., based in Stamford, Conn. Although it is a wholly owned subsidiary it reports the Hawaii results separately, partly to keep the bond market apprised of its performance.