Top 5 Things to Know About CenturyLink & Qwest
Here are the top five things to know about CenturyLink Inc. (NYSE: CTL)'s planned acquisition of Qwest Communications International Inc. (NYSE: Q). (See Qwest, CenturyLink Plan $22.4B Marriage and The Final Qwest?)
- The new company will likely be called CenturyLink, but the Qwest brand could survive in the business markets group, said Glen Post, president and CEO of CenturyLink and of the new company, during this morning's conference call to discuss the deal. At least the market is spared some other name conjunction such as CenturyQwest or CeLiQu, which would be a really silly name for a telecom company.
- Qwest's 11-state local territory now will likely get IPTV, but not necessarily any time soon. Qwest's chairman and CEO Ed Mueller, who joins the board of the new firm but relinquishes his executive role, said the CenturyLink IPTV service will be "additive" in Qwest's local territory, giving residential markets "another option."
Thus far, CenturyLink has rolled out IPTV in only three markets, though more are planned. In the meantime, the two companies have separate deals with competing satellite firms -- Qwest with DirecTV Group Inc. (NYSE: DTV), and CenturyLink with Dish Network LLC (Nasdaq: DISH).
- Expect more aggressive business sales from CenturyLink to capitalize on Qwest's national network. Post sees "significant growth potential" in becoming a "valuable strategic partner" and competing with AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and more, particularly for companies based in CenturyLink's local footprint.
- Don't expect CenturyLink to get bogged down in integrating Qwest on top of having swallowed Embarq, another larger company it acquired last year. The Embarq transition is ahead of schedule, Post said. As Ed Gubbins, senior analyst with New Paradigm Resources Group Inc. , notes: "With Embarq, CenturyTel has already demonstrated its ability to integrate a company that is larger than itself. It will be particularly interesting to see CenturyTel expand into international markets with the integration of Qwest." (See CenturyTel + Embarq = CenturyLink.)
- It will be business as usual during the year it is expected to take for the deal to go through. Qwest will continue to aggressively pay down its debt, Mueller promised. And CenturyLink will maintain its dividend, and continue the IPTV rollout, Post said.