Qwest has issued their second quarter earnings, which indicate the baby bell reported a net income of $212 million, compared with $180 million one year ago. Revenue sunk slightly more than expected by 8.6%, down to $3.09 billion. Of course continued landline losses are a major reason why, the number of Qwest lines in service falling 11.8% to 7.29 million from 8.23 million a year earlier. Qwest added 34,000 broadband and 21,000 DirecTV customers on the quarter. Operating expenses dropped 8% to $219 million.

Given Qwest lacks the resources to deploy fiber to the home, and their recent ADSL2+ service only topped out at 896kbps upstream, the company recently announced that they'd be converting to VDSL, an upgrade that increases Qwest's top available speed to 40Mbps downstream and 20Mbps upstream.

Just like AT&T, the company continues to test VDSL line bonding solutions that may be able to nudge those speeds ever higher, and at longer loop lengths.

According to Qwest, the company expanded deployment of the fiber to the node service, making it available to 375,000 additional homes. Qwest COO Tom Richards says the FTTN service is available to about 2.6 million homes, and Qwest hopes to reach 3 million by the end of the year. Richards confirms that Qwest currently actually serves just 265,000 customers with the faster speeds right now.

Qwest had recently been sending mixed marketing messages as to whether higher speeds were really necessary to compete, at one point even proclaiming that most customers didn't want them. Qwest CEO Ed Mueller says that the company's new 40Mbps service is just "icing on the cake," adding that company executives still believe that 20Mbps service was more than fast enough for most users (they didn't much care for 896kbps upstream, though).

Of course if you listen to users in our Qwest forum, a significant number will tell you they're still stuck on vanilla DSL at speeds of just 1.5Mbps. Given that Qwest lacks a wireless division to bolster earnings, the deployment of VDSL service will be slow. That pleases investors who think Qwest is the poster child for network upgrades, but it means there's a lot of unhappy customers who will be continually looking for faster alternatives.