Qwest poised for total sale?
Analysts see that as a possibility if it sells off its
By Steve Raabe
Friday, April 3, 2009
Qwest's possible sale of its nationwide fiber-optic network
could be a prelude to selling the rest of the company, analysts
Qwest's reported desire to sell the long-haul network would
leave a local-phone-service carrier that "would likely get
caught up in the ongoing consolidation of the local-exchange
market, potentially through the sale of the company to a smaller
player," said UBS telecommunications analyst John Hodulik.
Possible buyers, he said, could include Monroe, La.-based
CenturyTel, Frontier Communications of Stamford, Conn., and
Little Rock, Ark.-based Windstream Communications. None of
the companies commented Thursday.
Hodulik said it is also possible that Qwest could be the
acquirer in a merger between local-phone companies.
Qwest said Thursday it is laying off an unspecified number of
workers in its business-markets group, which relies heavily on
the company's fiber-optic network.
"The reductions were focused on areas where we determined we
could become more efficient, but we are not disclosing
specifics," said Qwest spokeswoman Johnna Hoff.
At the end of 2008, Qwest had 33,000 employees, including 8,000
If Qwest sells the long-haul fiber network for an estimated $2
billion to $3 billion, Hodulik said, the remaining local-phone
operation would represent "the rebirth of U S West" — the former
14-state Baby Bell that merged with Qwest in 2000.
Qwest officials have declined to comment on a report this week
in The Wall Street Journal quoting unnamed sources as saying the
fiber network is up for sale. The network carries phone
and Internet service for other phone carriers and provides data
delivery for businesses and government agencies.
"Qwest going forward continues to look like a small company, and
it is getting smaller," said telecom analyst Jeff Kagan.
"The company won't go out of business," he said. "However,
over the next several years customers will have more choices and
Qwest will lose more business to (long-haul fiber) competitors."
Steve Raabe: 303-954-1948 or