Hawaiian Telcom, Inc. is the incumbent local exchange carrier (ILEC) or dominant local telephone company, serving the state of Hawaii. It is owned by Hawaiian Telcom Holdco, Inc., which was formed in 2005 by The Carlyle Group, following its purchase of the Hawaii assets of Verizon Communications. They had been known as Verizon Hawaii, Inc., and previously as GTE Hawaiian Telephone Company, Inc., Hawaiian Telephone Company and Mutual Telephone Company.
Hawaiian Telcom provides local phone, long distance, internet services (dial-up and DSL), and is a directory publisher and mobile virtual network operator using leased capacity provided by Sprint and Verizon Wireless's CDMA networks. Verizon Wireless's Hawaii operations were not included in the deal, and Verizon Wireless continues to operate in Hawaii as before the divestiture.
Carlyle's purchase of Verizon Hawaii was quite controversial with the public and competitive local exchange carriers, Time Warner Telecom and Pacific LightNet, who had doubts about the Carlyle's lack of experience operating telecommunication businesses, and their intentions as to raising rates, upgrading the network with optical fiber as former-parent Verizon was doing on the mainland, and possible resale of the business in just a few years, all seen as being detrimental to the public interest.
Since breaking off from Verizon in April 2005, the company has been overcoming difficulties transitioning to its own systems. Issues ranged from extremely long hold times to speak to representatives, to duplicate and delayed bills. In February 2007, the company announced that it had reached a settlement with its original systems consultant, BearingPoint, and had hired a new contractor, Accenture, to complete the transition to the new systems.
Hawaiian Telcom announced on February 4, 2008, that it was replacing CEO Michael Ruley with turnaround expert Stephen F. Cooper, chairman of Kroll Zolfo Cooper. Cooper's previous management engagements include Enron and Krispy Kreme.
On May 8, 2008, the company named Eric Yeaman as its new CEO, succeeding interim CEO Cooper. Yeaman previously served as Chief Operating Officer of Hawaiian Electric Company, the electric utility serving the island of Oahu. The company also announced that Walter Dods, former president of First Hawaiian Bank and one of several local investors in Hawaiian Telcom, was assuming the role of Chairman of the Board.
On December 1, 2008, the company filed for Chapter 11 bankruptcy after missing an interest payment on its debt. The company's plan to reduce its debt by more than $800 million was approved by Judge Lloyd King of the U.S. Bankruptcy Court on November 13, 2009. The plan required approval by the Hawaii Public Utilities Commission. After leaving bankruptcy, the company's stock became publicly traded in 2010, moving to NASDAQ in 2011.
On June 24, 2011, The State of Hawaii Department of Commerce and Consumer Affairs issued a 15-year cable franchise license to Hawaiian Telcom, thus ending Oceanic Time Warner's 35-year monopoly as the state's sole cable TV provider. Hawaiian Telcom launched the service on July 1, 2011 after a year of testing in the Honolulu area, with islandwide service to expand in 2012.