Qwest launches bundle targeted to businesses

Qwest Communications yesterday launched a portfolio of advanced services targeted to mid-sized and large companies across its 14-state footprint. The portfolio includes long-distance, dedicated Internet access, IP, frame relay and ATM services, and virtual network services. The portfolio previously was available only to customers located outside Qwest’s footprint.

However, customers in Montana initially will be offered resold long-distance voice, because the Montana Public Service Commission has yet to approve tariffs for switched service; nevertheless switched long-distance is expected to be available in the state later this month. Qwest also said it expects to offer the complete portfolio to its Arizona customers by the end of the year; the carrier awaits Federal Communications Commission approval of an application filed in September to provide interLATA service in the state under Section 271 of the 1996 Telecommunications Act.

The business services portfolio is a direct result of Qwest’s completion of financial restatements in September. The restatements concerned a term loan for its QwestDex directory unit and an amended credit facility, both of which were negotiated in September 2002. Qwest is required to retire its debt on the term loan--which is secured in part by a secondary lien on Qwest Corporation stock--upon completion of the second phase of its sale of QwestDex. Because Qwest Corporation owns the network over which the business services portfolio would be offered, the financial restatements had to be completed before the FCC would authorize the unit to provide long-distance service, said Qwest spokeswoman Claire Maledon.

According to Cliff Holtz, executive vice president of Qwest’s business markets group, 600,000 potential customers for the portfolio exist across its footprint. "Using information that already is out in the marketplace, we estimate these customers probably purchase cumulatively some $6 billion annually of these very services that we heretofore have not been able to provide," Holtz said. "So from Qwest’s standpoint, this is an extremely material event."

It also is a good deal for customers, Holtz said. Purchasing the services in a bundle could save customers up to 42 percent over buying them individually, depending on contract terms. "We have put together a smoking set of discounts for customers that aggregate their services," Holtz said.

The infrastructure required for the portfolio already is in place, Holtz said. "It’s an amalgamation of POPs connected by large bandwidth pipes. It’s the exact same technology and the exact same infrastructure that’s been serving customers in 36 states outside our region," Holtz said. "We’ve just now connected it physically to customers inside our region."

Qwest will support the launch by offering eligible customers discounted long-distance rates, Holtz said. Customers that spend at least $500 per month for Qwest’s switched long-distance service will receive rates of 4 cents per minute. Those that spend at least $1000 per month for its dedicated long-distance service will receive rates of 2 cents per minute. The promotion is scheduled to conclude in 90 days, and the rates are good for one year.