Hawaiian Telcom (HT) filed for bankruptcy protection in Dec 2008. While management problems and billing issues helped accelerate HT's financial problems, the company also encountered a trend that is hitting the fixed-line telecom industry on a global scale.
A Berstein report in April 2009 showed residential access lines in the United States decreased at a rate of 11.6% throughout all of 2008, while decreasing at 11.5% in just the 1st quarter of 2009. As fixed-line revenue decreases, there is a parallel decrease in state and federal tax revenues being collected, further contributing to budget shortfalls in states such as California.
We expect that tax revenue recovery for telecommunications will find its way into broadband Internet, higher taxes on mobile phones, and voice over Internet protocol (VoIP) phones.