Afshin Mohebbi

From being a pure-play competitive carrier during the growth-oriented days of the late 1990s to buying incumbent U S West as profitability began to reign supreme, Qwest Communications has managed to stay a step ahead of market trends. But the secret of Qwest's success has more to do with its operational acumen than with labels, says Afshin Mohebbi, Qwest's president and chief operating officer.

“We don't look at ourselves as an incumbent carrier,” he says. “Today's world is about customers, cash flows and execution. You've got to be executing and, frankly, a lot of our friends have not executed. It was advantageous for a lot of people to use the economy as the reason they are not performing.”

Whatever the reason for other carriers' non-performance, the recent struggles in the telecom industry have created opportunities for Qwest, Mohebbi says.

“This whole situation has been wonderful for us because we've gotten access to wonderful assets at a fraction of the price it would have taken for us to build them,” he says. “Somebody was running out of cash and wanted to make payroll, so we wrote them a check for 10¢ on the dollar and we got great assets.”

In fact, carrier fire sales are one reason Qwest will reach its year-end goal of providing DSL service to 25 major markets outside its territory “with time to spare,” says Mohebbi.

It's a formula the operator hopes to repeat in other areas, particularly wireless. Currently, Qwest offers wireless service with coverage in its 14-state region as part of its service bundle to in-region customers. It passed on a chance to expand its wireless footprint via the PCS spectrum re-auction because competing carriers have “overpriced the air,” Mohebbi says. Instead, Qwest will wait and watch.

“Sometimes it's better to just watch the environment and let the winners and losers shake out,” Mohebbi says. “There will be plenty of people who have overpriced and underexecuted on the wireless side. We're watching them closely and wishing them luck — and we're certain that a lot of them are not going to make it.”

If they don't, Qwest will be happy to buy stranded wireless assets — but not for the 10¢ on the dollar it has paid for other assets.

“The way these guys overpriced the air, it'll be 1¢ on the dollar — and they'll be very happy going home with their 1¢,” Mohebbi says.

But it is the ability to operate profitably after making acquisitions that makes Qwest different from other start-ups that entered the market with Qwest four years ago, says Mohebbi.

“Everybody thought [buying U S West] was not the right thing to do when everything was about go-go growth,” he says. But the deal has been a boon for the revenue streams of Qwest, which has significantly improved service levels established by the RBOC dubbed “U S Worst” by many critics.

“Who would have thought that particular local company could even be vying to be No. 1 or No. 2 in the nation when it comes to specific services?” Mohebbi says. “You have to know what it takes to improve service, to run one of these networks, to make customers happy. That talent, I'm sorry to say, is not in a lot of companies.”

Mohebbi questions Qwest's future in very high bit-rate DSL, which is being tested in Phoenix and Denver, because of the high cost of deployment. But he says there's plenty of money to be made from current offerings, which is why Qwest is focusing on existing operations until the next profitable opportunity arises via a deal or new technology.

“We're in the catbird seat,” Mohebbi says. “All we need to do is execute on our plan, and we'll be all right. What do I have to worry about? I just have to operate.”