In the past couple weeks, there’s been a lot of discussion and debate about which telco strategy will win – Verizon’s FTTH play with FiOS, or AT&T’s FTTN strategy with U-verse. Lost in that debate was this country’s third largest telco, Qwest, who also yields significant influence over the telecom landscape. Qwest is following a similar strategy to AT&T, with one major difference. They are not pursuing an IPTV strategy, and are instead (at least for the time being) leveraging a DirecTV partnership for the video portion of their triple play. Qwest CTO Pieter Poll gave an interview to ZDNet’s Between the Lines blog and offered Qwest’s view of the broadband landscape. Here are some interesting takes from the interview:

• For the time being, Qwest is content with a FTTN strategy, utilizing VDSL2 to the home, and delivering a top end speed of 30-35 Mbps
• Poll is not concerned with DOCSIS 3.0, commenting that the 100 Mbps speeds that are associated with it are “a marketing game,” and will not be the reality in the marketplace
• FTTH is simply unrealistic for Qwest because of the cost associated with retro fitting their extensive buried plant assets – a challenge that Verizon does not face with its extensive aerial plant
• Qwest is moving forward with application development and intends to offer their “Q Home” application platform that will among other things, integrate phone service with instant messaging, email, and click-to-call type services

Qwest has taken their fair share of criticism for appearing to be somewhat slower to move into the future than their other “bell” brethren. They’ve punted on IPTV and have no wireless assets of their own, leading to speculation that they will face long term consequences for not being more aggressive with their strategies. But love them or hate them, at least you know where they stand. They’ve decided to follow a different strategy, and are not ashamed to talk about it. All these predictions of winners and losers are somewhat pointless right now. We’re way too early in the broadband game to figure out who wins. Anyone dismissing one strategy over the other is simply speculating. Qwest’s strategy adds some diversity to the mix. They’ll all be worth observing.

Qwest released 2Q08 numbers today and the results aren’t thrilling. Like most local telcos, Qwest is losing access lines and broadband growth is slowing significantly. Unlike it’s “baby bell” brethren, Qwest does not have its own wireless assets to rescue the day. Here’s a snapshot at some of the numbers:

• Lost 235K (2.8%) total switched access lines from 1Q08 and 799K (8.8%) from 2Q07
• Only gained 31K new broadband customers from 1Q08, or 1.14% and 327K over 2Q07, or 13.6%
• Total revenue of $3.8 billion for 2Q08 is down 2.3% from 2Q07, and among mass markets, business, and wholesale, the business segment is the only one that achieved growth (4.6%) over 2Q07

The results aren’t too uncommon from Verizon and AT&T results, with the exception of the missing aforementioned growth engine of wireless. Qwest made some strategic decision recently, where they are pursuing resale strategies for both wireless and video. It’s too early to determine whether those moves are the right ones. We’ll have to watch this play out over multiple quarters and years to come to see if reselling (rather than building one’s own means) the two growth engines of wireless and video makes long term sense. We may find out that Qwest has the last laugh because they're able to extract decent enough commission revenue to justify not investing the billions necessary to offer those services themselves. Maybe it makes sense to get a buck or two per DirecTV and Verizon Wireless resale customer per month than to build up billions in debt building your own capacity in the hopes that your ROI will eventually pay off. But of course, maybe it doesn’t. Maybe Qwest will find themselves watching on the sidelines, unable to act, as their competitors leverage their more robust networks for more value, revenue, and margin, and cherry pick Qwest’s best customers. We should all thank Qwest, because their alternative approach gives our industry some variety relative to long term strategies. Stay tuned.

AT&T, Qwest, and Verizon are collaborating with WhiteFence Inc. to promote Movearoo.com. Movearoo.com is a website that helps coordinate the task everyone loves to hate - moving. Through this telco partnership, Movearoo.com will feature telecom services from the participating companies. The three telcos are joining this effort to make these "moves, adds, and changes" exclusive to them. Competing services from cable companies and VoIP providers will not be featured on Movearoo.com. Customers can also arrange the transfer of other telco affiliated services including video. Both U-Verse and FiOS will be featured, but so will DBS/telco partnerships with DirecTV.

It’s an interesting development, in that large telcos have been slower to collaborate with each other on competitive issues, than say the cable industry. The independent telco industry has a rich legacy of cooperation and collaboration, fueled more by trying to achieve scale than necessarily confronting competition. I suspect we’ll see more competition fueled collaboration among all telecom players as the competitive landscape continues to heat up. One interesting caveat to this – I wonder who’s service will be recommended through Movearoo.com in suburban Dallas when/if Verizon’s FiOS service actively competes with AT&T U-Verse?