Qwest is announcing a new five year wireless resale arrangement with Verizon Wireless. Qwest was previously partnered with Sprint for a similar wireless deal, which obviously didn’t work out. Qwest CEO Ed Mueller announced early on in his tenure that he was unhappy with the current Sprint deal. The terms of the agreement are somewhat sketchy, but here are some interesting tidbits:
- Qwest customers will have access to the full line of Verizon Wireless handsets, smartphones and BlackBerry devices, as well as high-speed broadband wireless services for e-mail, Internet access and multimedia services
- Residential customers will be able to choose “wireless only” and be billed directly by Verizon Wireless, or include Verizon Wireless service as part of a Qwest bundle with their home phone, Internet and video services, and receive one bill from Qwest for all services
- Once billing systems are coordinated, residential customers will be able to elect to have their Verizon Wireless service charges included on their Qwest bill
Wireless has been a crutch for Qwest, and resale agreements, while not being ideal, provide the best remedy when nothing else is available. Qwest appears to be warm to resale arrangements. They’ve very publicly said they would rather resell DirecTV than build their own triple play network. Resale seems to be there mid-term, and maybe long-term, strategy for wireless as well. Maybe Verizon offered them a better deal than Sprint. Maybe Qwest sees Sprint as the Titanic and didn’t want to get caught on the top deck listening to the string quartet band while sinking with them. Qwest obviously needs a wireless play to remain competitive. Time will tell if this is the right move. The reality suggests, it might have been their only move.
An angle not addressed in this story is whether Qwest intends to use Verizon Wireless Broadband in areas where it has not yet deployed its wireline-based broadband services.
Verizon Wireless Broadband is already moving into some of AT&T’S service areas where AT&T does not have the wireline infrastructure to provide broadband.
Is Qwest showing some leadership with resale, or is it they just are afraid to spend money on their own network. They are now reselling the two services that other large telcos are sinking a ton of money into – wireless and video. This is one of those things where they could come out looking like geniuses because they gain commissions on those sales and don’t have to invest billions on their network. Or they could just as easily come out looking like idiots for not investing in their core network assets, and are handcuffed with their partners. Which is it?
One year later, Qwest is still co-opting other networks services.
Most recently they have teamed up with AT&T to allow access to their network of WIFI hotspots.
http://www.wirelessinternetreviews.com/blog/2009/05/qwest-latest-offer-wifi-deal/
It seems as though their strategy is working well enough in that they are still in business. The question remains however if all of this partnering will only serve to dilute their brand and send people off to sign up for services directly from those Qwest is partnering with.