Blog Post

Qwest Profits Fall: It Could Use a Wireless Boost

This morning, Qwest (s Q) reported earnings of $185 million on sales of $3.32 billion for the fourth quarter of 2008 — an almost 50 percent drop in profits from the same period last year. The carrier was hurt by land line defections (it lost about 9.6 percent year over year) and slowing broadband, as customers chose cable over Qwest’s DSL services and new home construction waned.  Qwest did gain 54,000 broadband customers during the quarter, although it didn’t specify if those were fiber to the node adds or DSL customers.

The other Baby Bells both saw a decline in plain DSL subscriptions during the fourth quarter but got a bigger boost in fiber-based broadband subscribers. However, unlike Verizon (s VZ) and AT&T (s T), Qwest doesn’t have a wireless business to bolster its top and bottom lines. This hurts Qwest considerably. As Om has pointed out, for the telephone companies, transitioning their business to offer triple play services while losing land lines is like walking a tightrope in skates. Without a wireless business to boost its profits, Qwest is performing this trick without a net.

9 Responses to “Qwest Profits Fall: It Could Use a Wireless Boost”

  1. Jim Kosmicki

    except that Qwest’s wireless is not very good. I can go 2 miles from their storefront in my hometown and barely have a signal. They don’t charge for roaming, but that’s because they have hardly any towers. To remain a viable wireless company, they’d have to invest some serious capital, and I don’t think they have it. They’re going to go with their referral and vendor fees from Verizon.

    I suspect that by the time the deadline for the switchover happens, I will no longer even be a Qwest landline customer. The local cable company is offering some very good deals with 24 month contracts for home phone.

  2. Toni Minot

    Qwest HAS a wireless division, which they are in the process of transferring to Verizon. The migration deadline keeps getting postponed (right now it’s sometime this coming fall), so I, for one, still have Qwest wireless service at the present time. If your post is correct, perhaps they should be trying to back out of this deal altogether?