GCI posts $8.9M loss in 4th quarter of 2015

Anchorage-based telecom giant GCI reported a net loss of $8.9 million in the fourth quarter of 2015, but growth in managed broadband and consumer data boosted its revenue, the company announced Wednesday.

GCI's revenue grew to $241 million in the fourth quarter of 2015, up about 5 percent from the same time during 2014. The company's revenue for all of 2015 grew about 8 percent from 2014, to $979 million.

The company had a net loss of $26 million for all of 2015, compared to a net income of $59 million in 2014. GCI's earnings before interest, taxes, depreciation and amortization were $70.5 million in the fourth quarter of last year, about flat compared to the same time the year before.

"We finished 2015 on strong operational footing, which sets us up to capitalize on opportunities in 2016," said Ron Duncan, GCI's president and CEO, in a statement. "Our broadband data products continue to provide core growth and our new wireless roaming agreements secure an important revenue source for the long-term health of the company."

GCI plans to sell its urban wireless towers in 2016 in a sale and leaseback transaction so that another company will operate the towers. That will "support significant investments in a diverse fiber to the North Slope and continued expansion of our TERRA network," Duncan said.

Company spokesman David Morris wouldn't say to whom the company might sell the towers.

"The towers in and of themselves are their own business just in terms of maintaining them and keeping them," he said. "If we can avoid those types of distractions then we can focus on our core business … the cellular services provided because of the towers."

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He said that part of the reason the company posted a loss last quarter and last year is that GCI is spending money on building out its wireless network in Alaska and also investing in its TERRA network, which serves rural Alaska.

Those managed broadband and consumer data areas of growth include distance education and telehealth services in rural Alaska as well as home Internet throughout the state. In the fourth quarter of 2015, revenue for the wireline -- cable Internet, cable TV and traditional telephone customers, as well as people who have cellphone plans with GCI -- consumer segment of GCI's business grew nearly 17 percent, to $89 million.

Revenue from businesses using GCI's services, however, fell about 11 percent between the fourth quarter of 2014 and the same time period in 2015. GCI attributes this drop to advertising.

"The substantial majority of these declines were from lower advertising revenues as compared to 2014," the company said in its earnings report, "which was a particularly strong year for political advertising in Alaska."

Morris said an enormous number of political ads in 2014, especially in the race between former Alaska U.S. Sen. Mark Begich and U.S. Sen. Dan Sullivan, appeared on Denali Media Holdings TV stations. Denali is owned by GCI.

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.

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