Hawaiian Telcom to Implement New Union Employment Terms Beginning Jan. 1; Union Legal Challenge Anticipated

News Release from Hawaiian Telcom

HONOLULU (Wednesday, December 21, 2011) -- Hawaiian Telcom Holdco, Inc. (NASDAQ: HCOM) has notified employees and IBEW Local Union 1357 leadership that with negotiations having reached an impasse, beginning on January 1, 2012, the Company will implement modified terms of employment consistent with the offers previously proposed to the Union. The Company must implement the changes at this time in order for modified benefit provisions to apply throughout the 2012 calendar year. Union leadership has advised the Company to anticipate a legal challenge of the Company's bargaining process.

Since the results of the Union's recent vote rejecting the Company's updated collective bargaining agreement (CBA) offer were announced on Dec. 13, discussions continued and a pact to refrain from any strike or lockout through Jan. 6 was reached. With mutual agreement and ratification of new CBA terms not achievable at this time, both sides recognize a need to move forward and work responsibly, while "agreeing to disagree" on certain collective bargaining issues and seeking to resolve differences through other means.

While most of the Company's modified employment terms are scheduled to be in effect as of Jan. 1, the 1% wage increase is being applied as of Dec. 18 and changes to union retirement benefits (i.e., pension plan freeze and enhanced 401(k) match) will occur on March 1, 2012 for legal compliance and administrative reasons. As there was no ratification, the ratification bonus that had been offered will not be paid. Union employees will begin paying 5% of the premiums for their chosen healthcare coverage in 2012.

Hawaiian Telcom has informed employees that while ratification would have been preferred over implementation as described above, the Company must proceed forward with implementation of the new terms in order to achieve success into the future.

Forward-Looking Statements

In addition to historical information, this release includes certain statements and predictions that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, any statement, projection or estimate that includes or references the words "believes", "anticipates", "intends", "expects", or any similar expression falls within the safe harbor of forward-looking statements contained in the Reform Act. Actual results or outcomes may differ materially from those indicated or suggested by any such forward-looking statement for a variety of reasons. More information on potential risks and uncertainties is available in recent filings with the Securities and Exchange Commission, including Hawaiian Telcom's 2010 Annual Report on Form 10-K and its Form 10-Q filed November 14, 2011. The information contained in this release is as of December 21, 2011. It is anticipated that subsequent events and developments may cause estimates to change.

About Hawaiian Telcom

Hawaiian Telcom Holdco, Inc., headquartered in Honolulu, is Hawaii's leading provider of integrated communications solutions for business and residential customers. With roots in Hawaii beginning in 1883, the Company offers a full range of services including voice, video, Internet, data, wireless, and advanced communication and network services supported by the reach and reliability of its network and Hawaii's only 24/7 state-of-the-art network operations center. With employees statewide sharing a commitment to innovation and a passion for delivering superior service, Hawaiian Telcom provides an Always OnSM customer experience. For more information, visit www.hawaiiantel.com.

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The next step is here!

Statement from IBEW 1357 

Through ongoing talks with the Company, we understand that the terms of its Updated Last, Best & Final Offer are being implemented beginning January 1st.

The outcome of the December vote was heard loud and clear by your negotiating team. Your negotiating team has continued to try and exhaust every possible option under difficult circumstances. Our attorney, the negotiating team, the staff and the IBEW International Office have been waiting for the Company to make its next move; they have chosen to implement their Last, Best and Final offer, just as expected.

As we have shared with the membership, litigation would be our next step. To get this company back on track and secure IBEW 1357 jobs for years to come, I am convinced that what’s needed is for the best workforce bar none in the nation to step up and lead once again. Only by including employees as part of the solution will Hawaiian Telcom be able to survive the current challenges, as well as those of the future. As we litigate this issue, I would ask that our members continue to provide great customer service and to be safe during this difficult time. We thank you for your patience.