Hawaiian Tel posts
16.5% net gain
Special services offset
By Russ Lynch
a drop in toll revenues
Star-BulletinGTE Hawaiian Tel had a 16.5 percent increase in second-quarter profits, as the company continued to record a boost in revenues from special services, such as Internet connections.
However, the company also said it had a decline in toll revenues because of competition in the interisland market.
The company, a subsidiary of Stamford, Conn.-based GTE Corp., yesterday reported a net income of $27.6 million in the three months ended June 30, up from the $23.7 million in the second quarter of 1997. Total revenues of $178.1 million in the three months through June 30 were up 1 percent from $176.3 million in the 1997 quarter.
Higher earnings are the result of the heavy investment GTE has made to modernize the Hawaii network, $2 billion over the past two years, the company said in a written statement.
Next month, for example, GTE Hawaiian Tel will complete its conversion to digital switching, making Hawaii one of only a handful of states with a 100 percent digital telephone system, the company said.
For the latest period the company reported revenues of $68.6 million from local services, up 5.9 percent from $64.8 million in the second quarter of last year. Demand for extra services such as its SmartCall system produced some of that added local revenue.
The company also hooked up more access lines and had new income from its integrated services digital network, the recently introduced system that uses standard phone lines for high-speed Internet communications.
Network access revenues -- from fees charged to long-distance telecommunications companies outside Hawaii for access to Hawaiian Tel's system -- fell 6.7 percent at $41.6 million in the latest quarter, compared with $44.6 million a year earlier. Part of that decline was due to a new fee structure that went into effect at the start of the year under a Federal Communications Commission order, the company said.
Toll services revenues were down 10.4 percent at $12 million in the 1998 quarter, from $13.4 million in the 1997 period. The company said its toll-call volume was down because of heightened competition and interisland customers are paying less per call this year because of a rate cut that went into effect last year.
For the first half of 1998, GTE Hawaiian Tel had a profit of $42.8 million, up 21.2 percent from $35.3 million in the 1997 first half. This year's half-year revenues of $178.1 million were up 1 percent from $176.3 million in the 1997 period.
Due to a stronger first quarter this year, local services through the first half of the year had a 5.7 percent revenue increase, to $137 million from $129.6 million. Half-year network access revenues were up 6.7 percent at $90.6 million from $85.1 million last year.
Half-year revenues from toll services of $27.8 million were down 16 percent from $33.1 million in the 1997 first half.
The company said new technology introduced by its capital investment in Hawaii allowed it to provide new services such as voice mail and caller identification, which are adding to revenues.
Hawaiian Tel said it has also been successful in reducing costs and streamlining its work processes.
