ITC^DeltaCom’s sagging wholesale business flattened out otherwise modest revenue gains in the third quarter, as the competitive carrier worked to better manage its debt.

The carrier’s communications service revenue was up 4% from a year earlier to $100 million, and its equipment revenue was up 3% to $7 million. But a 16% decline in wholesale revenue (to $17 million) left ITC with essentially flat total revenue of less than $125 million.

ITC blamed the wholesale revenue decline on the loss of a significant customer as well as “competitive market pressures and industry consolidation.”

The carrier reported a net loss of $135 million for the third quarter, more than 10 times the company’s loss a year earlier.

ITC spent much of the quarter refinancing and paying down debt. Excluding the impact of such actions and that of stock-based compensation, the company said its earnings before interest, taxes, depreciation and amortization increased 5% sequentially and 13% from a year earlier to $20 million.

The eight-state southeastern carrier identified interest rate fluctuations on its $300 million in debt as its biggest risk. With that in mind, the company brokered a one-year interest rate “swap” agreement in August that fixes the interest rate on more than two-thirds of that debt. Still, the company pointed out, a 1% increase in the interest rate on the remaining $95 million in debt would add $950,000 in annual expense.

Revenues from all four categories of ITC’s wholesale business were down in the quarter. The fastest shrinking was ITC’s local interconnection business, whose revenue was down 26% to $1.4 million in the quarter. Its largest source of wholesale revenue, broadband transport, was down 9% from a year earlier to less than $14 million.

The company added 11,700 facilities-based business voice lines in the quarter after 5800 resale and unbundled lines were either disconnected or converted to facilities-based lines.