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CenturyLink And Qwest Probably Won't Pursue Wireless
'We are not going to go out and buy shirt factories,' says CEO

As we mentioned yesterday, Qwest and CenturyLink have announced a merger valued at around $23.4 billion dollars (half of that being Qwest debt). As we also mentioned, neither company has a wireless division that will help them mitigate landline defections or help pay for necessary upgrades for the outdated last-mile copper infrastructure serving most of their residential customers. So will the new company try to get into wireless to help fund upgrades? All signs point to no, according to executive comments and analyst opinion.

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"We are not going to go out and buy shirt factories," CenturyLink President and CEO Glen Post told analysts on Thursday’s conference call, hinting at any big play into businesses seen as veering too far from core terrestrial data. "We are going to be in the communications business, said Post -- reiterating that "the future of our company is really in data" when speaking to the Financial Times.

So the company's "future is in data," yet they'll probably be nursing last-mile copper for the next decade if not more in most markets. Bonded 25/2 ADSL2+ may be as good as it gets (assuming a market sees competition) -- with no wireless play. Of course while the company will have Qwest's long haul network, a good fiber core, and a business providing backhaul bandwidth -- they're going to need lots of cash to be competitive residentially.

While CenturyLink does offer limited TV services, Qwest repeatedly insisted an "over the top" solution (IP Internet video of the consumer's choice) was best -- so that is a debate that will need to shake out as well. Qwest's opinion on that front was partially due to their interest in eliminating debt so they could make this very deal happen. Things could change on the IPTV front but again -- that's going to require a significant amount of money.

So where is the money for expansion going to come from? You, probably. A primary motivation for the merger was to create a new telco big enough to get a lion's share of broadband stimulus subsidies. The new, bigger company also has its eyes on the USF program -- which is being revamped with a focus on broadband -- but also on giving more of these USF funds to bigger carriers (something AT&T and Verizon have spent several years lobbying very hard for).

Meanwhile, from talking with people within the two companies, we're pretty sure that the new company will take on the newer CenturyLink brand. It's a blank slate for most people (we saw more than a few reporters yesterday call the company "CenturyTel," the name they had before merging with Embarq) and a lot of effort has been put into the new brand. A newer name can also help the company distance itself from the Qwest financial accounting scandal associations of a few years ago (or, possibly, even more recently).
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Tcomp
join:2008-07-29
Greenbelt, MD

Tcomp

Member

Future in data ....and maybe IPTV

Its true their wireless future looks a little in doubt, but I wouldn't draw firm conclusions on their IPTV future .... yet

'http://www.telecompetitor.com/will-centurylink-qwest-be-a-boon-for-iptv/'

Jim Gurd
Premium Member
join:2000-07-08
Livonia, MI

Jim Gurd

Premium Member

Re: Future in data ....and maybe IPTV

I don't see them starting a wireless company from scratch but they could always buy one of the second tier carriers like T-Mobile or Sprint.
primeomega
join:2004-03-11
De Pere, WI

primeomega

Member

Re: Future in data ....and maybe IPTV

CenturyTel did wireless and failed hard on their face already. I remember back when - only place around that had 3 year contact prices for their phones. And there service maps were so bad and cut up. I can't see them getting into it at all.
patcat88
join:2002-04-05
Jamaica, NY

patcat88

Member

Re: Future in data ....and maybe IPTV

Who owns CL's cell network today?

digiblur
Premium Member
join:2002-06-03
Louisiana

digiblur

Premium Member

Re: Future in data ....and maybe IPTV

said by patcat88:

Who owns CL's cell network today?
Alltel bought it and now Verizon Wireless has that of course. They built an awesome network in the areas they had licenses...tons of rural coverage where no one else had towers, they were the guys to have if you lived in their area.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: Future in data ....and maybe IPTV

VZW did NOT get all of Alltel's network. Many areas never were sold to VZW or ATT
iansltx
join:2007-02-19
Austin, TX

1 recommendation

iansltx to Jim Gurd

Member

to Jim Gurd
It would be rather ironic for CenturyLink to buy Sprint...remember that Sprint spun off Embarq which merged into CenLink...and remember that Qwest used to resell Sprint service...but it would be incredibly funny at least.

Personally though, CenLink will probably do what Windstream is doing: buying companies, upgrading everywhere to ADSL2+ (in CenLink's case bonded ADSL2+...25/2 isn't so bad when you compare it to non-Comcast cable) and deploying fiber in new developments and some old ones.
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

fiberguy2

Premium Member

Re: Future in data ....and maybe IPTV

I think if you're a company with the new territory the size of CL's and you're going to have that large of an imprint in the country, you're going to have to somewhat come up with a standard of deployed services.

While I think all phone companies should be working on pushing fiber and getting rid of copper, I think it would be a waste of money for them to focus on ADSL2+ while even touching fiber at all.

The thing is, too, that for the new CL as a company, the clock is ticking - really fast too. I think that wireless is going to serve their defeat more than anything else.

I don't much care for Verizon as a phone company at all.. however, even the idiots over there figured it out. Small areas = bad returns, dump them. Fiber optics = expensive, but good long term investment for survivability.

Who knows, maybe the new CL will take a look at their entire new footprint,.. invest into cities like Minneapolis/St Paul, Denver and other "like" cities.. and, like everyone else is doing, ultimately dump their smaller more expensive and less profitable properties onto smaller carriers like Frontier and the others. Maybe in the end, CenturyLink will build up a decent amount of systems, invest in them and the smaller towns will eventually find themselves bailed out by Uncle Sam. Maybe THIS is the "broadband plan"..
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: Future in data ....and maybe IPTV

I'd actually beg to differ

CenLink, like Windstream, is a rural carrier by heart. They'll take advantage of the gains that population density provides but aren't going to leave rural customers out in the cold like Verizon (not Wireless) is doing.

I'd expect that all CenLink greenfield developments will be FTTH, with some decent speed tiers to go along with that, and highly competitive areas (big cities) will also get the FTTH treatment, though it will probably take awhile since CenLink has $10B in Qwest debt to deal with.

For more rural areas, CL will probably upgrade everything to bonded ADSL2+...15/1 to 25/2 is better than 5/2 to 12/5...at least on downloads. CenLink also has 700MHz spectrum so they could use that in this game. Lastly, Annex M can give another megabit per pair to ADSL2+ on the upload side, something that's key to keeping cable providers who aren't named Comcast at bay. Also, $200 or so per customer to get bonded ADSL2+ working correctly is WAY cheaper than $2000 per customer to deploy fiber. Don't get me wrong, FTTH will get deployed, but bonded ADSL2+ will buy CenLink time on infrastructure that already exists.

But yeah, I think that CenLink will keep their rural areas. After all, that's where the USF funds come from...

graycorgi
Premium Member
join:2004-02-23

graycorgi

Premium Member

Re: Future in data ....and maybe IPTV

said by iansltx:

For more rural areas, CL will probably upgrade everything to bonded ADSL2+...15/1 to 25/2 is better than 5/2 to 12/5...at least on downloads.
Many rural homes are just on the edge of DSL's reach and will be lucky to see 3mbps from ADSL2+.
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: Future in data ....and maybe IPTV

Tell me about it. On a 20,610 foot Verizon loop and ADSL2 mode gives me a 7.5 dB SNR on 1.5/384 (provisioned a bit higher).

However you have to realize that with the Qwest purchase CenLink is getting a LOT of urban territory. ADSL2+ has no problems pushing 12.5 Mbps per line to 7,000 feet or more, so the reach of 25/2 could actually be quite impressive.
patcat88
join:2002-04-05
Jamaica, NY

patcat88 to iansltx

Member

to iansltx
said by iansltx:

Personally though, CenLink will probably do what Windstream is doing: buying companies, upgrading everywhere to ADSL2+ (in CenLink's case bonded ADSL2+...25/2 isn't so bad when you compare it to non-Comcast cable) and deploying fiber in new developments and some old ones.
Does CenturyLink have RTs every 2 miles down the main roads or not? Is CenturyLink installing new RTs or only upgrading cards inside existing RTs or DLCs installed 10 or more years ago?
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: Future in data ....and maybe IPTV

From what I hear they're doing the former, though bonded ADSL2+ will give a bit more reach for the same number of DSLAMs.

I know that my grandad in NC was previously only able to get 3M DSL through Embarq, and now it appears as though he's qualified for 10M.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4 to Jim Gurd

Member

to Jim Gurd
maybe MVNO.
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

1 recommendation

fiberguy2

Premium Member

So in otherwords...

... this is more of the end of a large portion of the country's stable telephone system.

Cable and most phone players in the past realized that you can't be a one trick pony in this market and survive. Phone got into video and cable got into phone for a reason... not 'just because'...

CenturyLink should call themselves "DecadeLink" because in about 10 years, they're going to be toast. They are GOING to have to put some serious money into their networks and upgrade their facilities. As time continues to move forward, the typical land line service is going to continue to dwindle even more so as Wireless service prices continue to drop.

As they continue to lose more subscribers, they're going to be forced to raise prices which will ultimately lose more subscribers.

So.. what's they're great plan to save themselves? Wait for a government bailout or stimulus?

Putting that much money and time into 25/2 is a complete waste. Their cable counterparts already largely have them beat.. and if not, can easily have them beat. No wireless? Incumbent providers not even in the area will continue to drive them down as well. AT&T and Verizon aren't even in their wire territories competing and can still beat CL down on both telephone and next generation wireless services.

If I were a stock holder in CL, I'd be selling it as soon as possible. As someone else already said before, when a smaller company tries to buy out a larger company, it's only a recipe for disaster.

AT&T, Verizon, Dish Network, DirecTV, and cable will certainly continue to take their business away. In all sense, too, Comcast and Cox have a large portion of their territory and their HSI is pretty much already outpaced any future plans CL can stretch out of their INCREDIBLY aging copper. Not to mention, in the case of Qwest and what made that company so unique is that Q has the largest territory of some of the most hardest to service areas out there.. sparse areas, rough terrain.. not to mention, CL isn't any better.

Call this company what ever you want.. but I'm calling it a dying horse - time to shoot it.
56403739 (banned)
Less than 5 months left
join:2006-03-08
Naples, FL

56403739 (banned)

Member

Re: So in otherwords...

Do you have CenturyLink service? I do. It's been pretty damn good. Their customer service is friendly and not afraid go go 'off chart' to get things done. Their techs work until the job is finished right. Service is on par with others and definitely better than what we get from Comcast here.

ADSL2+ is pretty easy. Existing equipment can be upgraded and most CPE made in the last few years already has the hardware. Pair-bonded installations need new modems but most people will be happy with 10/0.9, especially for what CenturyLink charges ($50/mo, $40 bundled with POTS).

So what are you basing your analysis on?
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

fiberguy2

Premium Member

Re: So in otherwords...

said by 56403739:

So what are you basing your analysis on?
Many things... much of what has to do with financials and what the future can hold for what basically works out to be a one trick pony.. Land line service is dying. I really don't think the internet, alone, is going to keep them alive, not at 20 meg internet.. not for the long haul.

And yes, I've had CL service before.. and my experience with them was horrid. However, I'm able to understand that service reliability is not in the name,.. it's in each local system and how it's run. Same can be said about Comcast. I've had incredible service with Comcast, however, this system is one of the best ones they have and you rarely have the issues that others experience.
meowmeow
join:2003-07-26
Helena, MT

meowmeow to 56403739

Member

to 56403739
Ah, you had EMBARQ service... I could not figure out what you were smoking... but I've never heard anything but good about EMBARQ, CenturyTel, on the other hand (the real new owner) is as close to evil as a company can get... They do have some good local people though, but as a whole they're a disaster...

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine to 56403739

Member

to 56403739
I would personally like to see them deploying at least FTTN out here. Not holding my breath but it would be nice, especially given that population is growing and people are demanding alternatives.

toby
Troy Mcclure
join:2001-11-13
Seattle, WA

toby to fiberguy2

Member

to fiberguy2
said by fiberguy2:

Call this company what ever you want.. but I'm calling it a dying horse - time to shoot it.
I'll call it a monopoly. Rural people have no other choice.

RVAguy
Premium Member
join:2006-01-05
Richmond, VA

RVAguy

Premium Member

Re: So in otherwords...

Rural people have no other choice b/c no other choice takes a chance on rural people. Is that the "monopolies" fault, or should they just pull out altogether as well?

toby
Troy Mcclure
join:2001-11-13
Seattle, WA

toby

Member

Re: So in otherwords...

When there is a monopoly the companies provide poor service.

Anytime we pay taxes or more importantly, fees, to these phone companies to provide service, they should provide a good product.
meowmeow
join:2003-07-26
Helena, MT

meowmeow to RVAguy

Member

to RVAguy
Nonsense, CenturyTel has historically fought as hard as they can to avoid facing competition. Even back in the dial-up days, we were the only significant populated place in Montana without the national ISPs like Earthlink and AOL... today, we're the only one that can't get VoIP numbers through companies like Vonage. We were the last to get Bresnan phone service, and Bresnan advises people get new numbers when they switch unless they're really attached as the port process can take weeks. A fact Bresnan documented well in the CenturyTel-EMBARQ merger proceedings.

CenturyTel has done EVERYTHING POSSIBLE to monopolize their markets, and I've seen the effects first hand. I rank them right up there with Monsanto for unethical business practices - companies that make Microsoft look downright pro-competition...
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

1 edit

fiberguy2 to toby

Premium Member

to toby
said by toby:

said by fiberguy2:

Call this company what ever you want.. but I'm calling it a dying horse - time to shoot it.
I'll call it a monopoly. Rural people have no other choice.
That's not true in all rural areas. My parents live in Two Rivers, WI.. a town of about 8,000 people or so. They have both Verizon and Charter for service. That's about the same choice as everyone else.

Blanket statements don't really cut it these days becuase you'd actually be amazed at what some rural areas actually have.

I've actually seen areas where cable dominates what the local telephone company offers.. and the same in reverse.

pullout
@208.1.36.x

pullout to toby

Anon

to toby
They do have another choice, NOTHING. Maybe they should pull out of their "monopolized" areas so people would of appreciated what they had.
patcat88
join:2002-04-05
Jamaica, NY

patcat88 to fiberguy2

Member

to fiberguy2
said by fiberguy2:

... this is more of the end of a large portion of the country's stable telephone system.

Cable and most phone players in the past realized that you can't be a one trick pony in this market and survive. Phone got into video and cable got into phone for a reason... not 'just because'...

CenturyLink should call themselves "DecadeLink" because in about 10 years, they're going to be toast. They are GOING to have to put some serious money into their networks and upgrade their facilities. As time continues to move forward, the typical land line service is going to continue to dwindle even more so as Wireless service prices continue to drop.

As they continue to lose more subscribers, they're going to be forced to raise prices which will ultimately lose more subscribers.

So.. what's they're great plan to save themselves? Wait for a government bailout or stimulus?

Putting that much money and time into 25/2 is a complete waste. Their cable counterparts already largely have them beat.. and if not, can easily have them beat. No wireless? Incumbent providers not even in the area will continue to drive them down as well. AT&T and Verizon aren't even in their wire territories competing and can still beat CL down on both telephone and next generation wireless services.

If I were a stock holder in CL, I'd be selling it as soon as possible. As someone else already said before, when a smaller company tries to buy out a larger company, it's only a recipe for disaster.

AT&T, Verizon, Dish Network, DirecTV, and cable will certainly continue to take their business away. In all sense, too, Comcast and Cox have a large portion of their territory and their HSI is pretty much already outpaced any future plans CL can stretch out of their INCREDIBLY aging copper. Not to mention, in the case of Qwest and what made that company so unique is that Q has the largest territory of some of the most hardest to service areas out there.. sparse areas, rough terrain.. not to mention, CL isn't any better.

Call this company what ever you want.. but I'm calling it a dying horse - time to shoot it.
They aren't waiting for a bailout. Cable has never leveraged their ROW access rights, or been in the business of renting dark or lamba fiber under SLAs for $10ks per month like ILECs do. Business special access lines is the real money maker of ILECs. All those cell towers need backhaul, and your the cellco's only choice. Just keep increasing those T1 loop charges every time you need healthy dividends. The state and local govts will also pay whatever you bill them for telecom lines. Schools all get free ungodly OC-XX internet courtesy of the USF. And think about all the people in any hilly areas with 1 bar outside their house, and zero bars indoors. They probably don't have DSL either. And no cable. They WILL subscribe to a landline no matter what. If you loose enough landlines, you qualify for USF subsidies for having rural density anyways. Its not as profitable as wireless (whose growth will fizzle out one day), but its always stable aslong as you have the ROW.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: So in otherwords...

maybe your schools in NY get their OC-XX but in Ohio and many other states they don't. It's called T1s here. And the schools PAY for those and what they don't pay for MSN pays for the rest.

moldypickle
Premium Member
join:2009-01-04
Haughton, LA
ARRIS SB8200
Ubiquiti UDM-Pro
Ubiquiti UniFi UAP-nanoHD

moldypickle

Premium Member

25/2 matched?

i'd like you to show me how much of the service area would actually be in any competition at all if they are moving to upgrade their entire footprint to bonded dsl?

my town here is very rural though we do have cable. the BEST the cable company can muster is 5 megs that comes through about 4 megs.

CL offers 10 megs in this area for the past couple years while the cable co still only offered 2megs top speed.

the argument that bonded dsl is old and doesn't compete really applies to areas where the BIG companies and larger populations are. most these country roads serviced by CL doesn't even have cable to compete. nor any 3G service, save verizon, sometimes.

kapil
The Kapil
join:2000-04-26
Chicago, IL

kapil

Member

Funny they used those words...

...because without wireless, they are going to lose their shirts and could use a shirt factory or two.

AT&T and Verizon have their shit together much more than CenturyLink or Qwest and even they can't make money without Wireless adding revenue to their balance sheets. This new combined entity is doomed. There is no money in wireline...unless you spend billions upgrading to a next generation last mile plant...for which, these cats do not have the money.

Karl Bode
News Guy
join:2000-03-02

Karl Bode

News Guy

Re: Funny they used those words...

Yes.
Mr Matt
join:2008-01-29
Eustis, FL

Mr Matt

Member

This merger gives me a sinking feeling!

As a CenturyLink customer I think that the merger will be Titanic!

Transmaster
Don't Blame Me I Voted For Bill and Opus
join:2001-06-20
Cheyenne, WY

1 recommendation

Transmaster

Member

SSDC

Same Sh*t Different Company
meowmeow
join:2003-07-26
Helena, MT

meowmeow to Mr Matt

Member

to Mr Matt

Re: This merger gives me a sinking feeling!

As a Bresnan customer in a CenturyLink area, I sure hope so...
chelpt
join:2008-05-24
La Crosse, WI

chelpt

Member

Notice the Difference in Maps?

Click for full size
Click for full size
First map is from the Centurytel/Embarq merger web site.

Second is from the Centurylink/Qwest merger site.

I noticed this too... that they did not include the wireless purchases in their new combined map. They spent all that money ... and by map admition they are giving up on this asset.
PX Eliezer704
Premium Member
join:2008-08-09
Hutt River

PX Eliezer704

Premium Member

Reporters were correct!

Regarding the comment, "we saw more than a few reporters yesterday call the company "CenturyTel," the name they had before merging with Embarq".....

The reporters were correct!

CenturyTel is STILL the legal corporate name.

CenturyLink is merely a brand name that they have been using.
SuperWISP
join:2007-04-17
Laramie, WY

2 edits

SuperWISP

Member

Qwest and CenturyTel's wireless strategy

Qwest and Centurytel do have a wireless strategy -- but it's not what you think. Instead of rolling out their own wireless, they charge exorbitant prices for backhaul to the OTHER providers who do put up wireless towers. The idea is to get the lion's share of those wireless providers' revenue because they have the only available "special access" lines in many rural areas.

The problem is that price gouging on "special access" is not a winning long term strategy. The FCC is investigating their monopolistic pricing (which is a good thing, because it raises the cost of Internet access in rural areas and precludes broadband competition there), the cellular providers are finding ways to build around them with microwave and fiber, and EVERYONE is taking their voice customers. As their customers flee and their monopoly rents dry up, the combined company will too.

••••••

ThrillHo
@comcast.net

ThrillHo

Anon

But of course...

The stock will improve with "cost-cutting efficiencies".

AKA layoffs and making people do double-work.

nunya
LXI 483
MVM
join:2000-12-23
O Fallon, MO

nunya

MVM

Fad

Bah. All this "wireless" and "interblogs" are just fads. What people really want is good old fashioned dial tones.
qworster
join:2001-11-25
Bryn Mawr, PA

1 edit

qworster

Member

The merged company will likely resell Sprint.

I predict that they will cut a deal to re-sell Sprint. This makes sense on several levels. First off, Sprint has been improving both their coverage and customer service dramatically. Second, Sprint needs the customers that this company could bring them, so they will be willing to deal. Third, remember this isn't Qwest-it's essentially CenturyLink. Finally, this will actually make Verizon breathe a sigh of relief, because Sprint uses parts of their network for seamless roaming-and in return Sprint has agreed to not allow (former) Verizon customers to use Verizon phones on their network. Since Sprint under Hesse has been building out their network the past few years, this agreement has become less and less desirable for Sprint.
Adding CenturyLink customers would (again) make this deal good for Sprint.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: The merged company will likely resell Sprint.

right. the MNVO program Sprint has would do wonders for them. Qwest made it work before; but gave it up and went to VZ to get out of all the billing and such. Embarq used to (may still do) offer Sprint service under their own brand.

If CenLink did the smart thing; they do what Sprint does with their brands; Sprint, Boost Mobile and Nextel all have Mobile to Mobile between each other regardless of the plan- as long as you have M2M. Sprint could get a deal where they'd add CenLink's customers to that. Making the M2M network even bigger and/or offering them the Unlimited Mobile anytime minutes.
Clever Name
Premium Member
join:2005-05-06
Davenport, IA

1 edit

Clever Name

Premium Member

fart

For the first 7-8 years dsl was available, we couldn't get it at this address. Now they offer up to 20 megabits/sec and the fastest available at this address is "up to" 1.5 mbits/sec down. Nice work forcing me to support cable which provides 20mbit down and double your upload speed. Farting in a shoebox and mailing to you asap.