Qwest Seeks To Sell Piece Of Its Nelwork
By amol Sharma and Dana Cimilluca
The Wall Street Journal
Tuesday, April 2, 2009
Qwest Communications International, Inc. struggling to pare a
hefty debt load, is seeking a buyer for a key piece of its
telecommunications network, according to people familiar with
A sale, which could raise between $2 billion to $3 billion,
these people said, would largely leave Denver-based Qwest as a
regional provider of telephone and Internet services to
Qwest is considering selling a long-distance network that
carries calls and Internet traffic for other phone carriers.
The unit also provides advanced telecom services to businesses
and government agencies.
Potential bidders include companies with similar networks, such
as Qwest's larger rivals, AT&T Inc. and Verizon Communications
Inc., and smaller players like Level 3 Communications Inc. and
TW Telecom Inc., the people said.
A spokesman for Qwest, which has a market value of about $6.5
billion, declined to comment.
Investors and analysts have been concerned in recent months
about Qwest's nearly $14 billion in debt. The company,
which has about $575 million in cash, says it is generating
enough cash to pay down debt and says its debt situation is
While a sale of the business would help, finding a buyer could
be difficult, with companies across the telecom sector in
cash-preservation mode and credit difficult to come by.
Verizon or AT&T might be attracted by the savings they would get
from moving Qwest's corporate and government clients onto their
own networks and shutting down Qwest's network, the people said.
Verizon, AT&T and TW Telecom declined to comment. A Level
3 spokesman declined to comment on Qwest's potential sale but
said Level 3 "has always considered itself a natural
consolidator in the telecom industry."
Qwest spent the last several years trying to rebound from
accounting and insider-trading scandals stemming from early this
decade, and missed out on the wave of consolidation that turned
AT&T and Verizon into behemoths.
The company has 11.6 million traditional phone customers, making
it the third-largest
provider. Without a wireless unit, Qwest lacks the growth
engine that has powered its rivals. Qwest doesn't break
out the revenue from its long-distance network versus its local
phone and Internet business, which operates in 14 states.
---Matthew Kamitschnig contributed to this article.
Write to Amol Sharma at
and Dana Cimilluca at