New HawTel CEO to introduce more services
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Less than a week before Hawaiian Telcom Communications Inc.'s 125 anniversary, new Chief Executive Eric Yeaman outlined a series of initiatives to build the company's products and grow its customer base.
"A strong competitive environment in Hawaii continues to present challenges for our company," he said on a conference call with investors and analysts yesterday. "We have increased our focus on retention activities in order to combat this issue."
It was the first time the company has provided details on how it will fight strong competition in the high-speed Internet market and replace a slumping residential and business phone customer base since turnaround specialist Stephen Cooper took over as CEO from a fired Michael Ruley in February.
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Hawaiian Telcom Communications Inc.
's new chief executive yesterday outlined more than a half-dozen areas he said will help turn around the troubled telecommunications company.
Eric Yeaman, who took over as CEO in June, said on a conference call with investors and analysts that building a strong senior management team and introducing new products and services are his top priorities. He has hired six new executives.
The Honolulu-based company said Wednesday that a continued drop in land-line customers led to a loss of $30.5 million for the second quarter, down from a profit of $21.4 million a year earlier. Residential customers dropped 11 percent, while business customers sank 4 percent in the quarter from last year.
"Based on the work done to date, and the critical need to introduce new products to build a sustainable business, we sought and obtained the board's approval to move forward with four new products, three of which focus on the business market and to pursue two new wholesale opportunities," he said.
When pressed by analysts, Yeaman said the company is developing its "critical" wireless and video services. He said he would provide further details on the company's next quarterly conference call.
"What is key in my mind is we have to move forward with the introduction of new products and services in order for us to be competitive," he said. "Incrementally, the cost of launching three of the new sort of business products are not that significant overall. They do incrementally add to the cost at (capital expenditures) but not at levels that would be material on an individual basis."
The company also has continued to reduce the amount it is paying the remaining members of Stephen Cooper's Kroll Zolfo Cooper management team. Compensation for the team, which took over after Michael Ruley was fired as CEO in February, is now at $225,000 a month compared with $600,000 a month.
Contract negotiations with the International Brotherhood of Electrical Workers Local Union 1357 also are continuing. The current contract expires Aug. 31.
On the customer-service front, which has struggled in the wake of back-office systems troubles that started in April 2006, the company has implemented a tool that will pre-qualify in real time what speed a potential new high-speed Internet subscriber can receive. Hawaiian Telcom also consolidated its sales and marketing teams and improved its customer data systems, Yeaman said.
"On Monday, we will be celebrating Hawaiian Telcom's 125th anniversary, which is a testament to the company's long history in the islands," he said. "Our heritage is a source of pride for all the employees of Hawaiian Telcom, but our past does not guarantee our future."