Qwest Backs Off Sale of Its Long-Distance Network

qLogoQwest may be desperately looking for a way to ignite growth in the face of its stagnating land-line business, but it’s not yet desperate enough to accept a too-low offer for its long-distance network. The company said today that it’s completed the strategic review of its long-distance network — and that it’s keeping those cables. From Qwest’s press release:

Although there was significant interest in this process from prospective buyers, the company and its Board of Directors have determined that the long distance network asset holds far more value to Qwest shareholders and is more strategically important to Qwest and its customers than is the alternative of pursuing a transaction.

The Wall Street Journal suggested late last week that Qwest had received bids below the $2-$3 billion range it had hoped for, with some coming in under $1 billion.  Large carriers such as AT&T, Verizon and Sprint declined to bid, according to the WSJ, while providers such as Level 3 Communications, XO Communications and TW Telecom put in offers that didn’t meet Qwest’s standards. Chris King, an analyst at Stifel Nicolaus, said in a report issued Friday that if Qwest sold its long-distance network and became a retail phone company it could become a buyer or a seller in the consolidation happening among rural and mid-tier phone companies. In other words, a sale of the long-distance network could have resulted in more deals from Qwest.

Keeping the long-haul network may not be what Qwest was after, but it means that as the need for bandwidth grows, Qwest owns assets that are in demand.

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