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The Honolulu Advertiser
Posted on: Friday, May 12, 2006

Hawaiian Telcom catches some static

By Sean Hao
Advertiser Staff Writer

It's been a frustrating six weeks for some Hawaiian Telcom customers.

Hawai'i's major telephone company took over all customer service responsibilities on April 1 as part of its sale from Verizon Communications Inc. to the Carlyle Group.

The company says 90 percent of its approximately 650,000 customers did not notice the transition, but it left some of the remaining 10 percent fuming.

Initially, Internet users were bothered by the switch of e-mail addresses from verizon.net to hawaiiantel.net. Then heavy spring rain interrupted a lot of service. Finally, April bills have been arriving at customers' homes as much as two weeks late.

Each event led to more calls to customer service. Before April, 90 percent of customer calls were answered within 20 seconds. Now there are customer complaints of waiting 15 to 30 minutes.

"We're aware that it has been very frustrating for some customers," said Hawaiian Telcom Chief Executive Mike Ruley. "We sincerely apologize to anyone who has been inconvenienced in any way."

TEMPS HIRED

The company has hired more than 200 temporary workers to handle repair, technical support and customer service. It has created an option for callers to leave a message after holding for four minutes and is waiving late fees for April and May phone bills.

Employees are working overtime and on weekends to bring wait times down, said Ruley, adding that it could still take a couple of weeks to get back to normal. "We're trying to get on top of the business."

The switch from Verizon to Hawaiian Telcom is supposed to eventually result in better customer service along with new products. Hawaiian Telcom is spending $100 million to bring Verizon's back-office operations to Hawai'i and to integrate systems to speed up customer service. This includes opening a local customer-service center. The company also plans to offer a television service via high-speed phone lines.

However, because of the complexities involved in switching services from one company to another, the first six weeks have been rough. Those most affected include callers seeking customer service, repairs and people looking to add or change services.

The company was surprised by the large number of users who needed help reconfiguring their e-mail software after the change from verizon.net to hawaiiantel.net, Ruley said. The severe rain in March and April also was unexpected.

"Some parts of the transition from Verizon have been more difficult than expected, which has been frustrating for us as well as customers," Ruley said. "We estimate that 90 percent of our customers have not felt the transition at all."

'IT TOOK A LONG TIME'

Alex Salkever of Kaimuki, unfortunately, was not in that group. Salkever said it took more than a half-hour to get through to a person to resolve a dispute over $20 in extra charges on his April long distance bill. The company promised to refund the money, said Salkever, a financial researcher.

"They were very apologetic and nice when I got them on the phone," he said. "It just took a long time to get someone on the phone.

"It pushes me closer to thinking about switching to cable" phone service, Salkever said.

That would be bad news for Hawaiian Telcom and its owner, The Carlyle Group, an equity firm based in Washington, D.C. Carlyle paid $1.6 billion for Hawaiian Telcom and has said it will only be an interim owner of the phone company. Ultimately, Hawaiian Telcom could be taken public or privately sold.

Last year Hawaiian Telcom lost 6.3 percent, or more than 43,000, of its phone-line accounts. While that was higher than the company originally estimated, the rate of line loss has declined each quarter since the sale of Verizon Hawaii closed in May of last year, according to Hawaiian Telcom.

How well Hawaiian Telcom performs under its current owner or a future owner could affect customer rates and the company's 1,800 employees.

Reach Sean Hao at shao@honoluluadvertiser.com.