HawTel’s
earnings up 155%

Greater demand from
Internet service providers
lifts profits

By Russ Lynch
Star-Bulletin

Still gaining from increased line-capacity demand by Internet service providers, GTE Hawaiian Tel's third-quarter profit soared 155 percent to $26 million, compared with $10.2 million in the third-quarter 1997.

In its quarterly report filed today with the Securities & Exchange Commission, the company reported flat sales for local services -- its state-wide system of home and business phone lines -- showing $66.6 million for the latest quarter and the year-earlier quarter.

However, network-access services produced revenues of $43.5 million in the latest quarter, a 12 percent increase from the $38.8 million generated in the 1997 third quarter.

Keith Kamisugi, a GTE Hawaiian Tel spokesman, said the rise was due to greater demand from Internet service providers for increased bandwidth, the capacity of the system to handle data, audio and video transmissions.

Toll services showed a sales gain of only 0.08 percent to $14.9 million in the latest quarter from $13.8 million in the 1997 quarter, continuing to show the effect of new competitors in the interisland telecommunications business. Kamisugi said toll revenues this year are down. "That's a sign that competition is very healthy in the interisland market," he said.

Total sales and revenues for the latest three months were $165.7 million, up 6.2 percent from $156 million a year ago. The company saved money on income taxes this year, due to tax adjustments made in 1997. The company paid $12.5 million in income taxes in 1998's third quarter, down 24.3 percent from $16.5 million in the 1997 quarter.

For the nine months through September, toll-services revenues were down 9 percent at $42.7 million, compared with $46.9 million for the 1997 nine months. Local services revenues for the nine months were up 3.8 percent at $203.6 million, from $196.2 million last year. Network-services revenues for the latest nine months were 8.3 percent higher than revenues in the same period last year, $134.1 million vs. $123.8 million. Total nine-months revenues were $504.1 million so far this year, up 4.5 percent from $482.2 million last year.