Hawaiian Telcom plans to ramp up the marketing effort for its new television service on Oahu in 2014 after signing up a record number of subscribers in the fourth quarter of last year, company officials said Thursday.
The TV service has accounted for a growing share of Hawaiian Telcom’s revenue since it was launched in mid-2011, helping offset continuing declines in the company’s landline customers.
The state’s largest phone company signed up nearly 2,600 subscribers for Hawaiian Telcom TV during the final three months of 2013, bringing its total customer base for the service to 18,400 homes.
About 120,000 homes on Oahu have been "enabled" to receive the TV service as a result of Hawaiian Telcom’s effort to expand its fiber-optic network on Oahu. Once a neighborhood is enabled, Hawaiian Telcom begins to offer the TV service to residents in that area.
"We expanded the reach of Hawaiian Telcom TV to 50 percent of the marketable households on Oahu, which positions us to capture a growing share of the consumer video and broadband market in Hawaii," said Eric Yeaman, Hawaiian Telcom chief executive officer.
The company plans to enable another 40,000 homes for the TV service this year and "move to a mass market strategy as well," Yeaman said.
Hawaiian Telcom has been slowly increasing its advertising, including radio ads and shopping mall billboards, as it competes for subscribers with Oceanic Time Warner, which controls more than 90 percent of the Oahu cable TV market.
"We’re just going to slowly continue to ramp up our tactics in the market," Hawaiian Telcom Chief Operating Officer Scott Barber said in a conference call with investors. "And as Eric said, you’re going to see more of that in the second half of the year.
"It’s going to continue to increase, but we’re never going to be at the same level as our competitor. But we’ve got a better product, and we believe once we raise that awareness, that we can continue to grow ourselves."
Hawaiian Telcom reported the latest numbers for its TV service as part of its fourth-quarter financial results, released Thursday. The company’s earnings last quarter fell to $2.6 million, or 23 cents a share, from $98.6 million, or $9.21 a share, in the fourth quarter of 2012. Included in the year-earlier results was a one-time, noncash tax benefit of $94.1 million. After adjusting for the benefit, Hawaiian Telcom earned $4.5 million, or 42 cents a share, in the fourth quarter of 2012.
Excluding the noncash tax benefit, the decline in net income to $2.6 million from $4.5 million primarily was due to a one-time gain in the fourth quarter of 2012 related to the acquisition of Honolulu-based telecommunications provider Wavecom Solutions, according to Hawaiian Telcom.
Revenue rose 4.1 percent in the fourth quarter to $100.5 million from $96.6 million, a year earlier.
For the year, Hawaiian Telcom’s net income fell 90.5 percent to $10.5 million, or 95 cents a share, from $110 million, or $10.32 a share, in 2012. After adjusting for the one-time tax benefit, Hawaiian Telcom earned $11.5 million, or $1.08 a share, in 2012. Revenue rose 1.5 percent to $391.2 million in 2013 from $385.5 million in 2012. Hawaiian Telcom shares fell 32 cents, or 1.1 percent, to $28.70 Thursday on the Nasdaq Global Select Market.