Hawai'i's major phone company lost $29.5 million during the three months ended Sept. 30, versus a $43.9 million loss in the year-ago quarter. The company attributed the improved results on lower operating costs and an income tax gain. During the quarter revenues fell 3.4 percent to $120.4 million, when compared with the year-ago quarter.

Revenues were down following a drop in access lines. Year-over-year the company's switched access lines, which is a gauge of service accounts, fell 6.9 percent to 572,997, with most of the erosion coming from the residential market.

Hawaiian Telcom said those losses were inline with industry trends, which are driven by a defection of landline phone users to cable and wireless competitors. Those losses have been somewhat exacerbated by the company's ongoing "back office" support systems problems, which have limited Hawaiian Telcom's ability to launch new products. Still Hawaiian Telcom was able to launch faster versions its High-Speed Internet service during the quarter.

"I remain encouraged by the strides we continue to make developing the company," said Mike Ruley, Hawaiian Telcom's chief executive, during a call with investors and analysts. "These efforts have led to improvements in or operational efficiency and the further stabilization of our business, but unfortunately we have not delivered the type of financial performance I am confident this business is capable of delivering."

In 2005, the phone company was sold for $1.6 billion by Verizon Communications Inc. to the Washington, D.C.-based global equity firm The Carlyle Group and a small group of local investors. The company has since struggled with billing and customer service issues.

During the conference call company officials could not predict when the business would no longer be hampered by recurring billing problems and other information systems issues. The privately-owned company also did not announce any further developments regarding plans to launch a new video service sometime next year.

During the first nine months of 2007 Hawaiian Telcom posted a profit of $7.4 million, versus a loss of $114.8 million during the year-ago period. Year-to-date profits were helped by a one-time $52 million cash payment from former Hawaiian Telcom consultant BearingPoint Inc. Revenues during the first three quarters of 2007 fell 3 percent to $367.3 million.

At the end of the third quarter Hawaiian Telcom had 1,632 employees, which was 202 fewer positions than on Sept. 30, 2006. A portion of those cuts came in response to early retirement incentives offered by the company. Hawaiian Telcom also has cut costs by freezing the pension benefit plan for nonunion employees.

During today's conference call Ruley said further reorganization moves were being planned. Those moves include a small reduction in senior executive positions, though no further details were released.

"When we get those plans laid out, we can report on those," Ruley said.