Qwest seeks broadband wireless partner

Qwest Communications is actively looking for a partner in the broadband wireless arena, company CEO Edward Mueller told analysts today. And while Mueller admitted Qwest saw retail “softness” in the fourth quarter due to economic conditions, the Qwest CEO was generally upbeat in his forecast for the company’s future.

Qwest saw its profits soar 89% in the fourth quarter, despite the fact that revenues were down slightly, both in the fourth quarter and for 2007, compared to 2006, due to cost reductions, enabling the company to declare its first dividend since 2001.

Qwest is already reselling Sprint wireless services as an MVNO, but Mueller said the company is well aware of the need for broadband wireless service and is looking at possibilities there.

“We need a partner for broadband data, we will be looking at everybody including Sprint,” Mueller said. “Our wireless offerings need to be state of the art, need to be right up front with everybody else. We need partners for wireless in business. We are working hard on the partnerships and it’s a big deal on our partnerships.”

Other highlights of Qwest’s analyst call:

• Wholesale revenue was down 4.5%, which Mueller attributed to industry consolidation, which has moved some traffic off Qwest’s network. Wholesale data revenues were up 5.6%. Part of Mueller’s strategy has been a change in the way sales teams are trained and compensated and he told analysts this will pay off going forward. “We will look for every pricing opportunity not only in wholesale but in retail segments to sustain revenue growth,” Mueller said. “We do think [wholesale] is stabilizing and as we shift out of low-margin products, we will see improvement. I am encouraged with changing compensation for our teams, we have everything lined up to do well in wholesale.”
• Qwest is being more aggressive on its consumer sales side as well, Mueller said. The company did see retail softness in the fourth quarter, similar to other retailers, CFO John Richardson said, but the company doesn’t yet know if this is a trend.
• Business sales are expected to improve this year, as Qwest wins its share of the government NetworX contract business and as its new approach to sales takes hold. The newer sales teams’ efforts should kick in toward the end of the year, Mueller said. “The sales force has a lot more to go, and we believe that by the end of the third quarter, those sales teams will be producing equal amounts as existing sales people,” Mueller said. “The push to the data products, the strength of the products, the continuation of the product teams given our sales teams what they need” all will pay off this year, he said.