Buoyed by the success of its VoIP service, SureWest Communications experienced a revenue increase of 39 percent to $60.7 million in its third quarter, as compared to its revenue in Q3 2007.

Despite that, the company recorded a loss of $101,000, compared to a profit of $736,000 a year ago. The company said the shortfall was due to interest expense and a loss from discontinued operations.

Broadband Residential RGUs increased 9 percent and subscribers grew 6 percent, increases the company said were driven by network expansion and increased penetration. SureWest’s subscriber total is now 100,600, up from 94,500 at the end of the third quarter last year.  

The company reported that the transition from circuit-switched telephony to VoIP in Sacramento has lead to 20 percent of its voice customers making the switch to also subscribe to data services.

Steve Oldham, SureWest’s president and chief executive officer, said, “We are managing through the current marketplace by aggressively growing residential subscribers and RGUs in the short-term in order to support ARPU and revenue growth in the longer term.

“Business revenues in both segments continue to be a driving force for the company.” Oldham added. “Business customers are responding positively to our expanded network coverage, customized business solutions and ability to provide protected network data centers.”

The company said it is increasing its projections for 2008 capital expenditures by $3-5 million with an expectation of up to $87 million for the year.

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