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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?)

  1. 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.

  2. 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).

  3. 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.

  4. 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.)

  5. 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.

— Carol Wilson, Chief Editor, Events, Light Reading

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cnwedit 12/5/2012 | 4:37:52 PM
re: Top 5 Things to Know About CenturyLink & Qwest Yep, I agree on all counts. Courting large business customers will be very new to CenturyLink, which is why they'd be smart not to attempt to force the Qwest national sales effort to work through Monroe - it makes little sense for many reasons. I do think CenturyLink can bring new efficiencies to the way Qwest serves its local rural footprint, which Qwest was (finally) in the process of upgrading.
paolo.franzoi 12/5/2012 | 4:37:54 PM
re: Top 5 Things to Know About CenturyLink & Qwest


I was with you until the last sentence.  I think it might be reworded as overlapping properties instead of systems.  The big difference with Worldcomm is that they bought a number of networks to deliver in essence the same service in the same places.  They were buying customers as a lower cost (questionable) and faster (real) way to expand their footprint in a given marketplace.

With Century, they are doing the same service into new places.  They are buying customers at a lower cost (real since building an overlay is unlikely) and faster way to expand their footprint into new markets. 

I think their is a big challenge with the Qwest thing in comparison to the Embarq thing.  Embarq was bigger than Century but not all that different - ILEC, mostly rural (outside of Vegas).  Similar vendor sets - similar operational issues.  Qwest has a really old ILEC infrastructure - except for the Adtran stuff they are doing.  The Long Haul network is completely new for Century. 

Monroe is a real problem.  Large Enterprise customers are not going to want to fly there.  So, Century is going to have to restructure some things compared to the more additive Embarq acqusition.



cnwedit 12/5/2012 | 4:37:54 PM
re: Top 5 Things to Know About CenturyLink & Qwest There is always the possibility of an operational meltdown when a smaller company acquires a larger one but the Worldcom situation is very different from CenturyTel's. When Worldcom bought MCI and then a whole bunch of other companies, it swallowed literally dozens of networks and network operating systems, and while Bernie Ebbers and others said they were achieving synergies through integration, they never really integrated all of those successfully. CenturyTel is a much more conservative business and they are going about the process of integrating Embarq in a methodical way. In addition, unlike MCI and Worldcom, these are operations that are largely contiguous and not competitive. That changes a bit with Qwest, as there is a national footprint and operations to be absorbed, but even so, there is not as much duplication of systems and resulting inefficiences.
FbytF 12/5/2012 | 4:37:58 PM
re: Top 5 Things to Know About CenturyLink & Qwest OK so how come no one has thrown out the Worldcom comparison to the Century Link acquisitions? Will we see a repeat melt down in a couple of years? And regarding OBL in Monroe, if he's there he's already being punished enough.
fgoldstein 12/5/2012 | 4:38:43 PM
re: Top 5 Things to Know About CenturyLink & Qwest

More like Mullah Glen.

paolo.franzoi 12/5/2012 | 4:38:44 PM
re: Top 5 Things to Know About CenturyLink & Qwest

So fg, are you implying that OBL lives in Monroe?



fgoldstein 12/5/2012 | 4:38:46 PM
re: Top 5 Things to Know About CenturyLink & Qwest

Another city has just fallen to the Teliban.  Year Zero program to spread.

Pete Baldwin 12/5/2012 | 4:38:46 PM
re: Top 5 Things to Know About CenturyLink & Qwest

Seattle, of course!  Thanks folks.

I'd heard of the Qwest stadium in Boise, now that I think about it.  Didn't know about Omaha.

That's the thing about these naming rights - your beloved venues don't keep the same name for long.  The AT&T Park name changes were particularly annoying because they happened in consecutive years. It leads to a kind of anti-branding, because you keep forgetting what the correct name is.

bmenezes 12/5/2012 | 4:38:47 PM
re: Top 5 Things to Know About CenturyLink & Qwest

Qwest has named arenas/convention centers in Boise and Omaha...plus major sports team sponsorships in Denver, Minneapolis, Arizona, etc.

bb_warrior 12/5/2012 | 4:38:47 PM
re: Top 5 Things to Know About CenturyLink & Qwest

Qwest Field in Seattle...

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