Qwest Profits Dip, But Outlook Brightens

Qwest Communications International reported a 6% decline in its third quarter profit as it continued to lose landline subscribers. The company, however, raised its outlook for future quarters.

The smallest of the former Regional Bell Operating Companies, Qwest tracked its larger former Bell brethren, AT&T and Verizon Communications, in shedding landline customers. Quarterly revenue fell to $3.05 billion against $3.38 billion a year ago and its profits dropped to $136 million from $145 million.

The Denver-based company operates nationally in the enterprise space and the company said its Business Markets unit produced "a strong annual gain in segment income." Qwest noted that its next-generation backbone facilities being developed with Alcatel-Lucent will deliver 100 Gbps speeds and will be implemented next year.

The company also reported strong gains in extending its Fiber-To-The-Node (FTTN) footprint to 71,000 new customers, bringing its total FTTN population to more than 500,000.

"We are optimistic about our prospects as the economy begins to improve in the quarters ahead," said Edward A. Mueller, Qwest chairman and CEO, in a statement.

Unlike AT&T and Verizon, Qwest has no strong wireless unit to counter the industry-wide loss of landlines. After selling its Qwest mobile phone operation earlier in the decade, Qwest turned to Sprint, then to Verizon Wireless to offer wireless services to its customers. The service is scheduled to be dropped entirely this week, but most subscribers have already shifted to other mobile phone carriers.

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