Qwest CEO Promises Quick Decision on Revised Wireless Strategy
Qwest seeks a wireless partner for a relationship that goes beyond the company’s deal with Sprint Nextel, Qwest CEO Ed Mueller said Monday at the company’s analyst meeting. Qwest, unlike AT&T and Verizon, has no wireless subsidiary. Mueller is working hard to address this shortcoming, which he sees as key to cutting customer churn, he said. Qwest will have an answer “fast,” since “this isn’t something we'll need a lot of study on,” he said.
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“We need a wireless partnership that is different than the one we have today,” Mueller said. “Full disclosure: We have a hole in wireless. You wouldn’t expect me to stand up and say, ‘Man, we've really done good here.’ We have to be able to offer to our customers in our bundle the same thing you can get somewhere else at the same time.” Now, only 6 percent of Qwest customers buy a wireless product from Qwest, he said.
Banc of America analyst David Barden said “it’s not altogether clear” what options Qwest would have if it doesn’t want to invest in spectrum. “I don’t think we have to put a physical investment in, honestly,” Mueller replied. “There’s a lot to come. I don’t know the answer yet.” The 700 MHz auction could lead to the launch of a new wireless wholesale provider, he said: “We'll just have to wait and see how the auction plays out.” He conceded that Qwest’s options are limited.
The company has a mobile virtual network operator pact with Sprint. It was unclear how that MVNO agreement could be expanded or whether Qwest would seek an agreement with another carrier. “I don’t think an improved MVNO agreement gets us where we need to be,” Mueller said. “We have to have a bigger play… We're not going to go buy spectrum to do this. We have to have a partner that’s willing to play with us on a retail level.”
Some wireless company will want a deeper relationship with Qwest, Mueller said. “We bring a lot to the party and people would see that,” he said. “We cover 11 percent of the country.” Wireless data will be more important than voice alone, he added: “In the end voice will be just kind of tag along to what’s really coming in the data markets.”
Reassuring analysts that Qwest has a strategy for the future, Mueller vowed to be as open with the financial community as possible. “I hope you will see that we've been thoughtful,” he said. “We've been doing our homework, and we will show you, and be as transparent as we can, the good, the bad and the things that we need to improve on.”
Qwest remains committed to building out its fiber network, Mueller said. The company expects to pass some 1.5 million homes with its fiber-to-the-node lines by year-end, he said. Qwest can increase its share of consumer broadband in home markets from 32 percent to 45 percent within a still- unspecified time frame, he said.
Qwest will compete with its peers in offering video, said Mueller. Of the company’s customers nine percent are taking its satellite video offering from DirecTV, which he called a higher take rate than those of Verizon’s FIOS service or AT&T’s U-Verse offering. Mueller hopes Qwest soon can offer video on demand through its partnership with the satellite TV operator, he said.