Anchorage Daily News

GCI, the state's largest telecom company, reported third-quarter profits of $564,000, down 81 percent from the same three months of last year.

Revenue for the phone, wireless, Internet and cable TV business grew to $151 million in the quarter, up 13 percent, the company said.

The profit and revenue figures are preliminary as some depreciation expenses are being revised, GCI said.

In general, GCI saw increases in its consumer wireless and video business, while AT&T Mobility's shift off of GCI's wireless network held down revenue and profit, the company said. Also, this year's third quarter profit reflected a $600,000 expense for giving broadband capacity to the University of Alaska, GCI said.

GCI is a major player in Alaska's local phone, long-distance phone, wireless, Internet service and cable TV businesses.

The company reported spending $236 million on capital costs from April through September, including $68 million during the third quarter, the last half of that period. Capital spending included a new $33 million fiber cable system in Southeast and an upgraded wireless service being rolled out in rural Alaska.

In the third quarter, GCI bought the remaining stock in wireless phone company Alaska Digitel and is running the company, and it closed on its purchase of Alaska Wireless, a rural wireless provider. These investments "have contributed significantly to our wireless growth," said Ron Duncan, president.

Digitel is upgrading its wireless network, which is causing GCI to depreciate some Digitel equipment faster than previously expected. This is the reason the company is recalculating the depreciation expense it has taken so far this year, GCI said.

The company's phone, wireless, Internet and cable TV services for consumers accounted for 44 percent of all revenue during the third quarter, more than its other business arms.

Consumer revenue of $66.5 million was up 17 percent over the third quarter of last year. Driving that growth were a 10 percent jump in video revenue, largely due to more video subscribers, and more cable TV subscribers getting digital, high-definition or digital video recorders.

In addition, GCI added 8,000 consumer cable-modem subscribers in the past year, and more customers are signing up for faster modem speeds, leading to a 23 percent growth in this revenue item, the company said.

Despite its lower profit, GCI executives stressed its cash flow is growing. A cash-flow measure called EBITDA -- for earnings before interest, taxes, depreciation and amortization -- totaled $44 million, up 18 percent from last year's third quarter, GCI said.

For the first nine months of this year, GCI posted a $4.7 million profit, down 58 percent, on revenue of $428 million, up 10 percent.

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