Qwest offers VDSL services in Denver area
(UPDATE: adds details in paragraphs 7,9)
DENVER, May 2 (Reuters) - Voice and data services company Qwest
Communications
International Inc. (NYSE:Q - news) began offering television services over
ordinary telephone
wires in Denver, expanding beyond its initial market in Phoenix.
Qwest uses VDSL (very high-speed
digital subscriber line) technology to
turn traditional telephone lines
into high-speed pipes with the ability to
transmit television, data and voice
services. Equipment maker Next Level
Communications Inc. (NasdaqNM:NXTV
- news) provides the VDSL
technology.
Qwest, the dominant local telephone
service in 14 midwestern and western
states, said it began offering its
VDSL service, which is known as ``Choice
TV,'' in the Highland Ranch section
of Denver.
Qwest's ``full choice'' package
costs $34.95 a month for more than 250
television channels, as well as
music and pay-per-view channels. Qwest
will connect up to three
televisions and VCRs. A $29.95 installation fee is
currently being waived, Qwest
customer service representatives said.
VDSL technology allows telephone
companies to offer packages of voice
and entertainment services and to
directly battle cable television companies.
AT&T Corp. (NYSE:T - news), the nation's No. 1 cable TV and long-distance
telephone company, already offers voice, video and
data services over cable television wires.
Qwest has been cautious in its approach to VDSL because of concerns over
the cost of equipment and installation, and the time to
install each customer's service.
Qwest told shareholders at its annual meeting on Wednesday it was bullish
about the VDSL technology, but it needed to ensure that
the costs per subscriber were low enough to guarantee profitability, and to
make it price-competitive with cable TV offerings.
U S West Inc., the local telephone company Qwest bought last year, had been
a big proponent of VDSL services, and had planned
to expand the service to about 10 cities. During the merger, however, Qwest
put those expansion plans on hold until Next Level
could reduce costs.
Qwest spokesman Tyler Gronbach said the company aimed to decide by the end
of the summer whether it would roll out services
in other neighborhoods beyond Highland Ranch and Phoenix. No definitive
deadline has been set, however, so the timing of a
decision could change.
If Qwest moves ahead with an expansion, it would be a huge boost for
Rohnert, California-based Next Level's revenues and a
strong endorsement of its technology, analysts said.
At the end of 2000, Next Level had 92 customers, including local telephone
companies and cable TV companies in the United States
and internationally. Still, the technology has not been adopted on a wide
scale.
Next Level, which is majority-owned by Motorola Inc. (NYSE:MOT - news),
posted a first-quarter loss of $22.4 million, or 26
cents a share, compared with a loss of $18.4 million, or 23 cents a share,
a year ago. Revenues fell slightly to $28.7 million, from
$30.5 million a year ago.
Shares of Next Level closed at $7.21, up 22 cents or 3.2 percent, on
Nasdaq. Qwest closed at $39.44, down $1.37, or 3.4 percent
on the New York Stock Exchange.
At Qwest's annual meeting, shareholders re-elected board members, and
approved an amendment to the employee stock purchase
plan. Stockholders rejected a proposal seeking advanced shareowner approval
of certain severance arrangements with executives
and another seeking exclusion of so-called ``accounting rule income'' in
determining performance-based compensation. |
