Blog Post

Qwest Looks to Sell Long-Haul Network

Qwest Communications (s Q), the regional telephone provider, is looking to sell its long-haul network, according to a story in the Wall Street Journal. The company, which has $14 billion in debt, wants to continue its consumer last-mile business, which serves 11.6 million customers. However, without a wireless business (Qwest resells Verizon Wireless) the nation’s third-largest phone company has little to fall back on as landline losses accelerate and faster cable connections lure consumers away from DSL.

The long-haul network, which serves businesses and governments, brought Qwest $3.27 billion in sales during 2008. Potential bidders for the network are other long-haul network companies, including Level 3 Communications (s LVLT), AT&T (s T) and Verizon (s VZ). This would be a big move for a company that has been fairly cautious about transformative deals, but it may not be enough to keep Qwest relevant in a world where wireless broadband will soon be a large part of any carriers’ broadband strategy.

3 Responses to “Qwest Looks to Sell Long-Haul Network”

  1. I am absolutely certain that Level 3 management is crapping themselves right now. They just issued I think $1.4B in long term debt at 15% to help pay off notes coming due in ’09 and ’10. They just went FCF+ and will remain so for the rest of the year, but I bet they weren’t counting on needing another $3B to buy off Q. If they had the money, they’d be the right company to do it.

    It makes you think. There’s only 5-10 tier 1 providers (depending on who you talk to). The industry is consolidating. The question is: is the consolidation a good thing? One ring to rule them all? Yikes. I mean this is the internet we’re talking about here. I would say that it’s more important than air travel. Would you want the internet subsidized if it fell into debt problems?