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

To: MangoBoy who wrote (1229)	5/8/1998 10:25:00 AM
From: MangoBoy	Read Replies (1) \| Respond to of 6846

[Qwest says U S West pact to add $100-$200 mln revs] NEW YORK, May 7 (Reuters) - Qwest Communications International Inc. said it expects its pact with U S West Communications Group to add about $100 million to $200 million to Qwest's 1999 revenues. Qwest and U S West on Thursday struck a marketing alliance to offer the Baby Bell's customers a unified package of local and long distance phone services. Qwest Chief Executive Joseph Nacchio said in a telephone interview he expects the alliance will also reduce its customer acquisition costs and reduce the customer loss or "churn." Under the deal, Qwest will pay U S West an undisclosed fee for each customer that signs up for the Qwest long distance service. "It's not big in terms of revenues to U S West. What's big to U S West is that we can finally provide a one-stop shopping capability to our customers," said U S West CEO Sol Trujillo. Under the 1996 Telecommunications Act, the Baby Bells can not offer long distance service in their home regions until they open their local telephone markets to competition. U S West's pact with Qwest escapes the parameters of the Telecom Act since the law does not specifically prohibit a Baby Bell from offering the long distance service of an unaffiliated company such as Qwest. "What we are doing is literally taking advantage of the current law and bringing real benefit to the marketplace," Trujillo said. The companies said they discussed the alliance with the Federal Communications Commission and the Department of Justice on Wednesday. Trujillo said U S West approached Qwest about the alliance. U S West held discussions with other companies as well. "We were looking for a company that was willing to be innovative, creative and also had the kind of network that was necessary to carry the amount of volume of business we think we're going to get...Qwest fit that bill perfectly in our opinion," Trujillo said. Qwest is a quickly-growing telecommunications upstart that is building a $2 billion fiber optic network to transmit voice, data and video. The network will link 125 cities generating 80 percent of the nation's voice and data traffic. Through the pending acquisition of LCI International Inc LCI , Qwest will create the nation's fourth largest long-distance company. The Qwest-U S West marketing alliance is not exclusive. Qwest said it would consider forming similar alliances with other Baby Bells or companies. U S West also said it is required to make the offer available to other long distance carriers as well. "I would hope that others would think this is great way to bring benefit to our customers," Trujillo said. Nacchio, the former AT&T Corp consumer long distance chief, said he does not expect the revenue forecast to be affected even if U S West forges alliances with other companies. "I'm not overly concerned about it. We had a conservative estimate, first of all. Second, other companies could come in. We compete with them in the traditional long distance space today...and even if they (customers) have a choice we feel they will select the Qwest option," Nacchio said. The companies expect to begin offering the package of service to some U S West customers next week and throughout the Baby Bell's 14-state region by the end of the month. Trujillo said the alliance with Qwest will not affect the Baby Bell's effort to gain entry into the long distance market on its own. The company has filed an application in Montana and plans to file applications with state regulators in the rest of its core states by the end of the year. "We intend to pursue this. But meanwhile, we do not want our customers waiting for the kind of benefits Qwest and U S West can provide today," Trujillo said. U S West declined to speculate on how the alliance with Qwest would be affected if U S West eventually gains permission to offer long distance on its own. "I think our relationships can evolve in a lot of different ways. And I don't want to speculate on that in this point in time because we're not there," Trujillo said.