Is CenturyLink Getting a Good Deal With Qwest?
By August 5, 2010 11:25 AM
The situation looks rather bleak for Qwest Communications International. The phone company, which is being acquired by CenturyLink for about $10 billion, continues to lose profits as fewer people find the need for home phones in the era of smart phones. Second-quarter profits were down by 25 percent, according to Bloomberg
If you've had your television on or opened your mailbox lately, you probably know that Qwest is promoting its high-speed Internet service. The reason, Bloomberg writes, is to offset losses of home-phone customers---a similar strategy to that of CenturyLink.
The Minneapolis-St. Paul Star-Tribune
notes that Louisiana-based CenturyLink is about half the size of Qwest, and Qwest's small competitors are questioning CenturyLink's financial strength and technical expertise in running a 14-state telephone network while also promising to cut $575 million in costs.
While CenturyLink says it can handle the transition, Qwest CEO Ed Mueller says Qwest isn't just a phone company: "We're a broadband company and we mean it" (via the Denver Business Journal
). Qwest has extended fiber-optic cables to five million households across its service turf, Mueller adds.