Qwest’s attempt to sell their long distance network has ended. The company reported on Monday that its long distance network is no longer up for sale. “Although there was significant interest in this process from prospective buyers, the company and its Board of Directors have determined that the long distance network asset holds far more value to Qwest shareholders and is more strategically important to Qwest and its customers than is the alternative of pursuing a transaction,” the company said in a press release.
The WSJ reported that Qwest was seeking $2 to $3 billion for the network, but bids were coming in closer to $1 billion. Now that this issue has been settled, all eyes are back on Qwest from a strategic planning point of view. In other words, what’s next for Qwest?
Had a sale gone through, we might have more clarity about Qwest’s future. Many analysts believed Qwest would have returned to its US West local access roots and perhaps been a player in the rural telecom landscape, either as an acquirer or seller of rural wireline assets. But now, it’s anyone’s guess.
Its lack of a facilities based wireless network and its limitations for robust broadband offerings create a difficult operating environment for Qwest. They don’t have a robust engine for revenue and margin growth. Combine that with a debt load of approximately $13 billion, and you see that Qwest’s options are fairly limited. Looks like Qwest’s CEO Ed Mueller and his management team will be earning their pay over the short to midterm as they try to craft a long term winning strategy.
