(RTTNews) - Monday, Cogent Communications Group, Inc. (CCOI: News ) reported a narrower than-expected net loss for the third quarter, on higher revenues due to an increase in total customer connections.

Cogent Communications' net loss for the quarter narrowed to $3.27 million or $0.07 per share from $6.50 million or $ $0.15 per share in the year-ago period. On average, twelve analysts polled by Thomson Reuters estimated a loss of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

According to the Washington, DC-based company, service revenue for the quarter increased 10.3% to $60.22 million from $54.59 million in the year-ago period. Eleven Wall-Street analysts had revenue estimates of $61.78 million for the quarter.

Segment-wise, on-net revenue from on-net service, which is provided to customers located in buildings that are physically connected to the company's network was $48.1 million for the quarter. Revenue from off-net service, which is provided to customers located in buildings directly connected to Cogent's network using other carriers' facilities and services to provide the last mile portion of the link from the customers' premises to the company's network was $11.1 million. Revenue for the quarter from non-core or legacy services was $1.1 million.

Total customer connections for the quarter increased 23.8% to 20,988 from 16,954 a year-ago. On-net customer connections increased by 25.0% to 16,633 from 13,307 in the prior year period. Off-net customer connections during the quarter were 3,290, compared with 2,996 as of September 30, 2008. Non-core customer connections increased 63.6% to 1,065 from 651 in the year-ago period.
The company, which provides high-speed Internet access and internet protocol, reported that its total operating expenses declined during the quarter. Expenses related to network operations increased to $26.40 million from $24.13 million year-ago. However, selling, general and administrative expenses declined to $18.08 million from $20.34 million in the prior year period. Depreciation and amortization expenses declined to $15.28 million from $15.49 million year-ago.

The company at the end of the third quarter had approximately 21,000 customer connections and 1,421 on-net buildings on the Cogent network.

For the nine-month period, net loss narrowed to $15.89 million or $0.36 per share from $25.70 million or $0.57 per share in the year-ago period. Year-to-date service revenue increased to $173.29 million from $160.56 million in the year-ago period.

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