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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: limtex who wrote (4808)	8/4/1999 12:58:00 PM
From: Larry Livingston	Respond to of 6846

Beyond the usual synergies here is an excerpt of an article by Jim Seymour for the Street.com: A demonstration site. First and most importantly, Nacchio & Co. gain a high-profile in-house demonstration site to show where the gee-whizzy high-speed value-add services Qwest has been preaching about for so long can go in the near-term future. One example is movies-on-demand, which I discussed last week. As the smallest of the RBOCs, with 25 million customers scattered -- sometimes thinly -- over 14 Western states, U S West offers both a perfect test lab and also a nearly ideal live "demo suite" for Qwest to show off the value-add services it's been touting as the real advantage of its nationwide high-speed fiber network. Trujillo had been backing all sorts of on-demand-services tests, and to USW's credit, it has been better than most RBOCs about rolling out DSL service. USW's residential customers in many of its service areas can get 256-kilobits-per-second ADSL service for just $19.95 in a noncontinuous-connection option, $29.95 for continuous connections. And service up to the full 7-megabits-per-second capacity of ADSL is available, though at a heck of a price premium. So USW has at least been laying the groundwork for the wide-scale delivery of multimegabit deliveries of home entertainment. I think we'll see Qwest start filling that pipeline through deals with "content providers" -- in other words, movie studios. Qwest's new USW-installed-base test lab also has rich potential for demonstrating the value of high-speed commercial service. To take the health-care industry as a handy example, physicians all over the country are screaming for high-bandwidth connections for transferring the output of all their fancy new medical-imaging devices from one place to another. Most new health-care facilities get high-speed on-site fiber connections pulled through their walls ... but the speed stops right there. There is no high-speed link for them to the larger world, for those multisite, real-time-imaging consults they want so badly. The new Qwest could do a lot worse than to adopt the health-care industry as its poster child for the benefits of very high-speed connections. Especially in the mountain West, where facilities and experts are often far apart, and "collaborative medicine" becomes especially important, Qwest could develop an impressive portfolio of case studies on how what it provides can change U.S. medicine for the better. A stabilized income stream. In the first quarter of 1999, USW had revenue of $3.18 billion and net income of $397 million. For the same period, QWST had $878 million in revenue, and net income of ... $4.8 million. 'Nuff said? While there are profound differences in the finances, bookkeeping and reporting of a hot growth company like Qwest and a heavily regulated public utility such as U S West, the fact remains that the merger now gives Qwest a large, steady earnings stream. After repeated trips to the debt and equity markets, Qwest will now own relatively stable revenue streams from U S West's basic and value-added communications services, in addition to its own income from selling and leasing capacity on its buried-fiber network. The BellSouth connection. Remember that not long before Nacchio set out on his quest for U S West, he sold a tenth of Qwest to BellSouth (BLS:NYSE). With his own in-house RBOC, and another, highly visible RBOC present at his table as an equity partner, he and his execs are in a position to start pushing the value-added services he's so eager to demonstrate out into the wider marketplace, learning how to sell them to real customers. The long-distance card. Qwest, already the nation's fourth-largest long-distance company, can be expected to move fast to expand its LD sales through the other RBOCs and CLECs.