Qwest Communications International announced today that it plans to deepen partnerships to offer better video, Internet and wireless services. The company plans on spending around $1.8 billion for capital improvements. Qwest forecast that revenue for
2008 will be flat or down slightly as improvements are made.
Recent quarterly profits have been up, thanks to a tax benefit and an increase in high-speed Internet subscriptions. But Qwest is vulnerable to growing competition from cable operators and declining sales of traditional phone services.
Qwest is working on a new wireless partnership as its current arrangement to resell Sprint Nextel services is inadequate. Shares of Qwest jumped 7% after the news was announced by Chief Executive Ed Mueller.
“We need a wireless partnership that is different than the one we have today,” Mueller said. “We have a hole in wireless.”
Mueller wasn’t clear on what partnership changes might be made. Some analysts have said Qwest may be negotiating changes with Sprint, while others say it may be looking at other tie-ups.
Qwest has a marketing partnership with satellite television service provider DirectTV Group Inc DTV.O, and has shied away from expensive investments in Internet-based video services of its own like those AT&T and Verizon.
Qwest shares were up 29 cents or 5.5 percent at $5.56 in afternoon trading on the New York Stock Exchange, after hitting an earlier high of $5.68. The stock remains below its 12-month high of $10.45 on May 31, 2007.