Updated at 2:42 p.m., Wednesday, November 15, 2006
Hawaiian Telcom: Glitches may persist until next year
BY Greg Wiles
Advertiser Staff Writer
"There still remains a significant amount of work to be done," Michael Ruley, Hawaiian Telcom chief executive said today in a conference call with investors.
"It will be several quarters before we think we can return to a more normal operating mode than the one we're in today."
Hawaiian Telcom disclosed that its customer care, order management, billing and financial reporting systems are still not working properly because a management consultant hired to build its information technology systems, BearingPoint Inc. of MacLean, Va., hadn't delivered systems that were operating properly. Hawaiian Telcom relied on the systems when it took over operations from Verizon Communications Inc.
Since then, some customers have complained about billing errors, long wait times for reaching customer service representatives and other problems. Ruley said Hawaiian Telcom has hired other contractors and had employees work overtime to help resolve problems that include work orders getting lost and longer call handling times.
While it will take months before all of the systems are functioning properly, customers should be seeing progress, company spokesman Dan Smith said. The average customer service call hold time is down from 28 minutes in May to under 4 minutes now, he said. The company's goal is to have calls answered within 20 seconds.
"There have been improvements, but certainly not enough," Smith said.
"Our performance remains at an unacceptable level today," Ruley said.
A quarterly filing at the U.S. Securities and Exchange Commission shows the company has spent $11.3 million on outside consultants and services to resolve its back-office and information technology system problems.
Ruley said the company is in talks with BearingPoint about recovering some of what it's spent resolving the situation. BearingPoint has acknowledged there were delays in meeting deadlines at Hawaiian Telcom and that it was in discussions with the company.
Hawaiian Telcom was formed last year after Washington, D.C.-based Carlyle Group bought the phone company from Verizon for $1.6 billion. Under the terms of the sale, Hawaiian Telcom was to take over operations from Verizon in February. In its SEC filing, Hawaiian Telcom disclosed that it spent $22.3 million on a two-month extension with Verizon as it waited for BearingPoint to get systems built.
The Honolulu-based utility hasn't disclosed how much it is seeking in damages from BearingPoint. But Smith said the company's contract states that it can recover costs incurred because systems don't function properly.
Hawaiian Telcom also said yesterday that it won't start offering an Internet-based television service until the second half of next year. The company earlier had discussed offering the service by the end of December.
The company said the rollout is being delayed, in part to make sure it lines up the right features and functionality as technology evolves.
Reach Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com.