GCI profit increases slightly in quarter COMMUNICATIONS Revenue rose, especially for wireless services

General Communication Inc. reported a second-quarter profit of $5.4 million, slightly more than its $5.3 million profit during the same three months last year.

The Anchorage-based telecom and cable TV company said its second-quarter revenue rose 6.8 percent to $118.2 million.

GCI is a major Alaska communications business, providing long-distance, local and wireless phone service as well as cable TV and Internet access.

The company logged revenue increases across all of its business lines, with wireless showing the strongest growth.

It started aggressively marketing wireless phone service about two years ago, when it struck a deal to use Cellular One's wireless phone network to provide cell phone service under the GCI brand.

GCI said its second-quarter wireless phone revenue totaled $3.8 million, more than double the $1.6 million it reported a year ago.

The number of wireless subscribers nearly doubled, reaching 22,900 by the end of June, up from 12,161 in June 2005.

The company also is planning to buy a majority interest of Anchorage-based cell phone company Alaska DigiTel. Federal securities regulators are reviewing the proposed $29.5 million deal.

Long-distance and local phone service made up the bulk of GCI's second-quarter revenue, totaling $47.4 million, up 7 percent from the same three months in 2005, the company reported.

After a management reorganization last summer, GCI stopped separately reporting revenue from long-distance and local phone service.

GCI got its start in the 1980s as a long-distance phone company and got into the local phone business in the late 1990s after federal regulations were enacted that forced telephone monopolies to lease some of their network equipment to competitors.

It had primarily sold local phone service on lines it leased from cross-town rival, Alaska Communications Systems. But recently, GCI began switching local phone customers to its own lines, which also deliver cable TV and high-speed Internet service.

GCI executives told stock and bond analysts on a conference call Wednesday that the changeover was going more slowly than they had expected but they still were aiming to have more than 35,000 customers shifted to the new system by the end of this year. So far, 26,400 customers have made the shift, they said.

The company, which for years had logged steady growth in local phone subscribers, reported a loss of 1,100 in the second quarter, ending it with 111,400. Executives attributed that loss mostly to a broader trend of people cutting their land lines in favor cell phones.

Revenue from GCI's cable TV business fell slightly to $22.3 million from $23 million last year. At the same time, it added 700 subscribers, ending the quarter with 121,900, the company said.

Meanwhile, revenue from GCI's Internet business rose 3 percent to $42.8 million, the company said.

After the earnings announcement Wednesday, GCI's stock fell 28 cents a share to $11.62.