Qwest to continue ‘rationalization’

Having solved its immediate liquidity crisis with the sale of its Yellow Pages publishing unit and the renegotiation of its bank line of credit, Qwest Communications CEO Richard Notebaert said today that the company likely will continue paring back business lines that don’t meet expectations.

‘There’s a series of 10 businesses we’re looking at and saying, “Can they be profitable, and can they get a return on investor capital over a given time?’” he said while speaking at the Morgan Stanley Global Communications Conference in Miami. “We need to take a hard look at all of the businesses we’re in.”

The company almost has completed the process and has already started exiting some lines of business. Among the first is a unit that did Web site designs specifically for pharmaceutical companies.

“At some point in time, that was probably an exciting business with a lot of upside,” he said. “But in light of the current environment, that’s not where we should deploying our assets and our skill sets.”

Another business possibly in danger is the VDSL-based video group. Notebaert, at one time the most vocal RBOC executive favoring cable overbuilds, said he’s not convinced anymore that video needs to be part of the bundle.

“It might be complementary, but I don’t think it’s mandatory,” he said. “I had a home in Wisconsin and I had DBS. It never would have crossed my mind to buy that from [a telco]. I’m not sure the two [video and data] relate yet. I think it’s more a matter of, ‘Where do I want to get my data and stream from, and which version do I want, DSL or cable modem?’ On the video itself, I don’t connect the two.”