Customer service at Hawaiian Telcom is improving, although the state's major phone company has yet to return to the form consumers and regulators expect.

The company answered 70 percent of residential customer calls with a live voice within 20 seconds in December, according to a report released by the state Public Utilities Commission last week. The state requires Hawaiian Telcom to answer 85 percent of customer calls with a live voice within 20 seconds.

While not up to the required level, December's performance was the best since before Hawaiian Telcom took over full operation of the state's main phone company in April.

The average hold time for residential billing and installation calls fell to 65 seconds last month, versus about two minutes in November.

"The trend is certainly moving in the right direction," said Hawaiian Telcom spokesman Dan Smith. "We're very glad to see it."

The increase in calls answered within 20 seconds comes in part because call volumes are typically lower in December. Additionally, the company is making progress resolving billing issues that are causing spikes in customer calls, Smith said.

"We do think it's getting better in terms of billing, but we're certainly not there yet," he said. "Obviously we regret any inconvenience any problem that a customer might have had or might have now."

Hawai'i's major phone company was sold in 2005 for $1.6 billion by Verizon Communications Inc. to the Washington, D.C.-based global equity firm The Carlyle Group and a small group of local investors.

In April, the company switched on a new in-house billing and customer service system. Since then the company has struggled with billing and customer service issues. Although Hawaiian Telcom's phone network remains reliable, thousands of customers have received inaccurate bills — some repeatedly — since the switchover. Customers also have had to endure long waits for customer service.

Hawaiian Telcom's problems led to a surge in complaints to the Public Utilities Commission last year. As of Dec. 15, there were 143 informal written complaints filed with the agency, versus 31 complaints filed during 2005.

Hawaiian Telcom's Smith said the improved response time in December was in part a result of customer service initiatives — including the hiring of more than 200 temporary workers to handle repair, technical support and customer service — and use of a third-party call center when needed.

Despite the improvements, it will be well into this year before Hawaiian Telcom straightens out its service problems, the company has said.

Hawaiian Telcom's problems are tied to a move of human resource, finance, marketing, information technology and other Mainland-based jobs to Hawai'i. Hawaiian Telcom said it spent $100 million to bring Verizon's back-office operations to Hawai'i and integrate its systems to speed up customer service. The switch to a locally run telephone company was supposed to improve service, produce new products and bring a net increase of about 150 jobs to the state.

In addition to customer service and billing issues, Hawaiian Telcom has had difficulty collecting and processing information needed to report financial data, resulting in collection delays, billing adjustments and an increase in reserves, or money it sets aside to deal with billing errors.

The Public Utilities Commission is investigating Hawaiian Telcom's customer service problems. That probe, which isn't expected to conclude until late this year, could result in penalties or fines levied by state regulators.

Reach Sean Hao at shao@honoluluadvertiser.com.