No "coconut telegraph," Hawaiian Telcom, through its operating subsidiaries, provides modern telecommunications services to residential and business customers in the island state. The company has almost 400,000 local access lines (aka landlines) in service, serving about one-third of the state's 1.3 million people. It also provides long-distance phone service to about 200,000 customers and broadband Internet access to about 100,000 customers. Hawaiian Telcom resells wireless communications services through an agreement with Sprint Nextel, but wireless services only account for 1% of sales. The company has been in operation since 1883.
Hawaiian Telcom has some 85 offices around the state for administrative facilities, call centers, and customer service sites.
Sales and Marketing
The company’s number of business and residential customers are split pretty evenly, but business customers generate more revenue. The United States Pacific Command is one of its largest customers, and the state’s various resorts and tourist destinations are also top customers.
Overall sales fell 2% in 2012 to $385 million as the company’s number of local access lines dropped 6%. Network access services, such as wholesale carrier data and subscriber line access charges, also fell. Hawaiian Telcom did see some growth in Internet service and its television service, Hawaiian Telcom TV, which launched in 2011.
Faced with mounting competition from mobile phone providers, as well as ISP's that offer computer telephony as an alternative to landlines, Hawaiian Telcom has struggled to grow its base of subscribers and bring in sufficient revenue to fund its operations. The company tries to differentiate itself from the competition by providing a higher level of customer service than its mainland rivals. Other ways it tries to combat competitive pressures include upgrading and upselling services to existing customers, winning back former customers, offering new products and features (such as TV), and controlling costs.
Mergers and Acquisitions
Since Hawaiian Telcom can’t compete with wireless providers, it is trying to brand itself as a provider of advanced communications and network services to business customers. To that end, in 2013 it bought data center services provider SystemMetrics Corporation for $16 million in cash.
The year before it bought the competitive local exchange carrier (CLEC) business of Honolulu-based Wavecom Solutions Corporation for $13 million. The deal added about 1,700 customers statewide and augmented the company's broadband fiber capacity.
In late 2008 the company filed for Chapter 11 bankruptcy, citing increased competition and economic volatility. It emerged nearly two years later with a decreased debt burden.