Hawaiian Telcom said it narrowed its losses by more than $15 million during the third quarter of 2006.

The local phone company said yesterday that it lost $43.9 million during the three months ending Sept. 30, down from the year-earlier period's $59 million loss.

"The third quarter was a challenging one for the company on several fronts and there remains a lot of hard work ahead to overcome the cutover-related systems issue we still face," said Michael Ruley, Hawaiian Telcom's chief executive officer.

"Our third-quarter performance is not reflective of the progress and investment we have made to position Hawaiian Telcom to deliver innovation and value to the marketplace."

The quarterly loss came on revenues of $141.7 million, which was up 17.3 percent from the year-earlier's $120.8 million. The company's operating expenses rose 2.6 percent to $154.7 million from third-quarter 2005's $150.7 million.

For the first nine months this year, Hawaiian Telcom and its predecessor company lost $26.7 million, which is down from $77.4 million in the year-earlier period.

Hawaiian Telcom was formed last year after Washington, D.C.-based Carlyle Group acquired the local phone company from Verizon Communications for $1.6 billion.

The takeover, which resulted in $3.4 million in new costs during the recent third quarter, was marred by billing glitches in which many customers were double-billed and some complained about problems reaching service representatives to get their billing disputes resolved.

Hawaiian Telcom recently said it is dissatisfied with the company it hired to handle its customer billing, McLean, Va.-based BearingPoint Inc., and is considering hiring another company to fix its billing problems.

Hawaiian Telcom said the number of its telephone access lines continued to decline. As of the Sept. 30, 2006, the company had 615,300 lines, which is down 5.5 percent from the year-earlier period.

However, the company said the number of high-speed Internet subscribers increased 21 percent in the third quarter from a year earlier to 92,300 customers.

"We continue to make progress but we are not satisfied with the pace of that improvement so we have brought on board significant external resources to assist us in meeting the needs of our customers, improving systems functionality and strengthening our internal controls," Ruley said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.