GCI posts record revenue, but net income loss, for 2015
General Communication Inc. finished the fourth quarter of 2015 strong, with record revenues but negative income, courtesy of the purchase of Alaska Wireless Network. GCI posted a $10 million net income loss for 2015, following a $7.6 million net income in 2014.
Alaska Communications Systems Group Inc. sold its wireless subscriber business and its 33 percent share of the Alaska Wireless Network to General Communications Inc. for $300 million in cash in a deal finalized Feb. 2, 2015. In the second quarter of 2015, GCI folded the 87,000 acquired wireless subscribers into its coverage.
The purchase has increased revenues, particularly in the consumer wireless segment in which GCI no longer competes for business with ACS. Total revenue increased from $910 million in 2014 to $979 million in 2015.
Between 2014 and 2015, GCI wireless lines in operation increased from 149,600 to 227,800.
The increase yielded expected results. Revenues for consumer wireless plans spiked in 2015 to $75.8 million, $45 million more than in 2014. Business wireless revenue increased $4 million from 2014 to $8.1 million in 2015.
Wireless data plans for consumers also increased by $27 million, along with a $22 million bump in managed broadband data plans for businesses.
During an earnings call, an investor asked whether GCI plans to use its existing TERRA fiber optic network to potentially increase presence on the North Slope now that ACS and Quintillion provide broadband services for ConocoPhillips.
Chief Financial Officer Peter Pounds said GCI will continue to explore North Slope opportunities, and that GCI was not aware enough of Quintillion’s operations to comment.
“The Slope, in spite of the low oil prices it’s still a very important region for us, both for wireless and for commercial customers,” said Pounds. “It’s one of the few places in the state where we have a non-redundant network, and much of our investment this year both on the TERRA Network and on the North Slope fiber designed to eliminate the remaining of pockets of single thread service.”
CEO Ron Duncan, when asked about whether the state economy would eat into GCI’s bottom line, said he expected to see the economy contract quickly if the Legislature cuts too deeply into the state budget.
“Right now the outlook for the industry is that it’s going to see some shrinkage in the economy,” said Duncan, who has co-founded the group Alaska’s Future to advocate for using Permanent Fund earnings to close the state’s massive budget deficit that’s nearing $4 billion for the current fiscal year. “This could be a very mild recession and we could have a reset and continue to build a core economy, or if the Legislature takes irresponsible actions and drives the budget off the cliff, you could see much more adverse results on the state economy probably before the end of this year.”
DJ Summers can be reached at [email protected].