Qwest's "Billion-dollar opportunity"
CEO Ed Mueller says only 32 percent of broadband customers in
the 23 markets Qwest serves get it from the Denver-based
provider, which also seeks partnerships to improve wireless
By Kimberly S. Johnson
Tuesday, February 26, 2008
Qwest chief executive Ed Mueller said Monday that the company
intends to leverage new and existing partnerships to boost its
"We need partners to help us do this. We can't do this
alone," he said at a meeting with analysts in
Mueller spoke about changes he is considering to Qwest's
wireless partnership with Sprint Nextel and about his commitment
to spend millions to improve Qwest's broadband network.
"We have a hole in wireless," he said.
Currently, Qwest purchases wireless minutes from Sprint at a
wholesale rate but must also team up separately with a handset
manufacturer for phones. That means customers don't get
the newest phones on the market.
A new partnership, possibly with AT&T, Verizon or Sprint, would
give customers better deals and give Qwest a revenue boost.
Mueller said Qwest's 14-state territory covers 11 percent of the
country, making it attractive to other wireless providers.
Right now, Qwest has 824,000 wireless customers.
The market responded positively to Mueller's remarks, with Qwest
shares up 33 cents, or 6 percent, to $5.60 on Monday. The
stock, however, remains down from the more than $8 a share it
traded at in August when Mueller took over after the departure
of former CEO Dick Notebaert.
Two analysts gave Mueller different reviews.
"It was a very good presentation. (Mueller) came off very
well," said Patrick Comack, an analyst at Zach ary Investment
Research, who attended the meeting.
But telecom analyst Jeff Kagan, who listened to the meeting
online, said he wanted more specifics about the company's
"He didn't say where the company was heading," Kagan said.
"There were a lot of hopes and dreams."
Comack said one of the company's problems is that it has a small
share of the large business-enterprise market and has performed
poorly in the sector.
Mueller said new Networx contracts to serve federal agencies
should help that sector when they begin to pay off in 2009.
Enhancing Qwest's broadband network could provide "a
billion-dollar opportunity," Mueller said, if Qwest can take
market share from its competitors.
He also said Qwest plans to buy back shares and use cash to pay
down debt and pay its dividend.
Kimberly S. Johnson: 303-954-1088 or