HawTel rings up
29.9% net gain

By Russ Lynch
Star-Bulletin

GTE Hawaiian Tel saw its profits rise 29.9 percent in the first quarter of 1998, compared with the year-earlier quarter, as increased demand by Internet users helped keep phone lines buzzing.

The company, in a filing with the Securities & Exchange Commission, also said its bottom line was boosted by selling access to its Hawaii network to competing telecommunications companies.

Hawaiian Tel said it had a profit of $15.2 million in the three months that ended March 31, compared with a profit of $11.7 million in the first quarter of 1997. First-quarter revenues of $160.3 million were up 6.9 percent from revenues of $149.9 million in the 1997 quarter.

Despite the growth of its newer businesses, local service to its own customers in Hawaii still produced the biggest share of total sales in the latest quarter, $68.4 million, up 5.7 percent from $64.7 million in 1997's first quarter.

But revenue growth from local services was slower than from some of the newer businesses.

The second-biggest part of the company's business, network access services, showed a sales increase of 21.2 percent to $49.1 million in the latest quarter from $40.5 million in the year-earlier period. That business -- providing mainland telecommunications networks with access to Hawaiian Tel's local phone lines -- has been its fastest-growing segment recently.

Competition from outside, however, has its downside for the company. New competitors in interisland telephone and telecommunications service have eaten into its revenues, offsetting some of the other gains. Toll service brought revenues of $15.7 million in the latest quarter, down 20.3 percent from $19.7 million in the 1997 period.

Revenues from special-access fees, meanwhile, grew by $1.4 million because of demand for increased speed and volume capacity, or bandwidth, by Internet service providers and other high-capacity users, GTE Hawaiian Tel said.