Qwest Takes Broadband To Customers' Doorsteps
Louis Trager
03/15/99
Interactive Week from ZDWire
Qwest Communications International is quietly changing its spots -- from
new-wave, long-haul company to end-to-end carrier delivering
broadband right to high-usage business customers' curbs.
The shift lets Qwest (www. qwest .com) avoid some access charges
local carriers levy. More important, the company said, laying fiber directly
to the best customers enables Qwest to offer new business services
faster and more reliably than it could by resorting to local carriers.
"Keeping the [local incumbent] in the loop is a last-mile bottleneck," said
Alan Feldman, an analyst at Sands Butler & Co. "It's less profitable for
Qwest , and they have less control over their destiny."
Qwest signaled the change with a recent low-key announcement that
received little attention. It had secretly built local fiber networks in 10
metropolitan areas, including Chicago, Dallas, New York and San Jose.
Qwest this year will complete nine more networks in Baltimore, Houston
and Los Angeles, among other places. In June, the company plans to
release details of service offerings and additional builds.
Had the company announced the construction in advance, "people would
have said, 'You are crazy, biting off more than you can chew,' " said
Hambrecht & Quist analyst Mark Langner.
The networks fit a strategy to push ever closer to customers, said
spokesman Tyler Gronbach. But Qwest has disclaimed any intention of
growing into a competitive local carrier on a national scale.
So far, the highly targeted networks have cost less than $100 million in
total, Bear, Stearns & Co. analyst Michele Wolf said the company
disclosed in a briefing -- a bargain owing partly to Qwest 's rights of way
along railroad tracks and elsewhere.
Around Puget Sound, the network can serve Microsoft, with which
Qwest already has strategic partnerships, and Boeing. The
Washington-area net, meanwhile, meanders purposefully past the U.S.
Treasury Department, other federal agencies and America Online's
campus, Wolf noted. Qwest previously announced a deal with Treasury,
but no new customers have been signed in connection with the new
capability, Qwest said.
Elsewhere, the carrier will look to acquisitions, partnerships and capacity
swaps to reach customers, according to Gronbach.
High-speed Digital Subscriber Line service from local data carrier Covad
Communications (www.covad.com), which this year got a $15 million
Qwest investment, will cover telecommuters and small businesses in 22
metropolitan areas. Others in the competitive-carrier industry look
eagerly to the aggressive Qwest as a potential acquirer. But the company
is not -- yet -- swearing off arm's-length deals with local wireline or
wireless carriers that can supply sufficient bandwidth.
For all its whizzy novelty, Qwest is following an industry trend. AT&T
and Sprint are making direct, broadband customer connections a top
priority. MCI and WorldCom years ago snapped up local voice
connectivity to supplement long-haul networks.
End-To-End Qwest
Next-generation carrier Qwest Communications International has quietly
built local networks to connect directly to major customers in 10 cities.
The carrier plans to build nine more local networks this year and to
release additional service and expansion plans in June. |
