Qwest Not Satisfied With Sprint

Qwest Communications International Inc. (NYSE: Q) CEO Ed Mueller acknowledged during his company's analyst conference in New York on Monday that its current wireless partnership with Sprint Corp. (NYSE: S) is inadequate.

Mueller told analysts that he was looking to expand upon Qwest's current re-seller agreement with Sprint that expires during the first quarter of next year. Details of what kind of partnership he is looking for are unclear, but Mueller is looking for more of an equal partnership than the existing agreement.

Mueller noted that only 6 percent of Qwest's customers buy wireless services from the company. Due to Qwest serving 11 percent of the U.S. population, Mueller feels Qwest is an attractive partner for any carrier.

Whatever new deal Qwest works out, it's possible it could be with AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ) instead of Sprint.

The new partnership would likely be similar to the deal Qwest has with DirecTV Group Inc. (NYSE: DTV) In that partnership, Qwest receives a recurring revenue stream for every customer it signs up, whereas with Sprint it buys the capacity from the carrier and then resells it.

Mueller reiterated Monday that the company will not be making any investments in wireless infrastructure of its own.

As far as wireline services go, Mueller said he sees consumer broadband as a $1 billion business for Qwest. Its fiber-to-the-node network that it is investing $300 million in will pass 1.5 million homes by the end of this year, which Qwest says will add one percentage point in revenue growth. (See Qwest to Spend up to $300M on FTTN.)

Without laying out a time frame, Mueller said Qwest can increase its share in regional broadband service from the current 32 percent to 45 percent.

— Raymond McConville, Reporter, Light Reading

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