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HawTel net gains
as expenses drop
The company had a profit
By Russ Lynch
of $11.8 million in the first
quarter despite lower revenues
Star-BulletinGTE Hawaiian Tel reduced its first-quarter operating expenses by $3.2 million, helping the company record a $11.8 million profit.
That was slightly ahead of the year-earlier quarter's $11.7 million income, despite a small dip in total revenues in the latest period. The company, a wholly owned subsidiary of GTE Corp., had revenues of $155.7 million in the first quarter, nearly $1 million less than $156.5 million reported for the first quarter of 1999. Operating expenses of $128.4 million were down from $131.6 million in the year-earlier quarter.
The company is not publicly traded and has one stockholder, GTE Corp., but discloses its performance in filings at the Securities & Exchange Commission.
GTE Hawaiian Tel had local-service revenues of $71.4 million in the latest quarter, a 4.4 percent increase from $68.4 million in the 1999 period, thanks to an increase in minutes of use of its local phone service plus greater use of high-bandwidth services by Internet and other data-communications customers.
However, mandated reductions in interstate and intrastate rates cut into network access revenues, income from other service providers who pay to use its Hawaii network. Those services generated $41.7 million in revenues in the latest quarter, down 7.7 percent from $45.2 million in the year-earlier period.
"Although our first-quarter revenue was down slightly due to reductions in our local transport charges to long-distance companies, we were still able to increase our net income. The report also shows continued growth in demand for bandwidth, fueled in part by strong interest in high-speed Internet access services like DSL, or digital subscriber lines," the company said in a statement. Also contributing to the profit improvement was a greater demand for enhanced custom-calling features in its local service.
GTE Hawaiian Tel's parent is heading toward a merger with Bell Atlantic Corp., to create a big new company called Verizon (pronounced ver EYE zon) Communications Inc.
GTE Hawaiian Tel said no decision has yet been made on what the local company will be called after the merger, but local service is unlikely to be affected.
