Bits: Qwest Hangs Up On Sprint Nextel

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By Matt Richtel

The turnip that is Sprint Nextel is giving a little more blood.

Qwest Communications, the Denver-based telecommunications provider, announced Monday it has decided to start reselling mobile phone service provided by Verizon Wireless. That means it will stop selling the mobile phone service that it currently provides over the Sprint Nextel network.

The development is more bad news for Sprint Nextel, which has been fighting uphill since its $35 billion merger in 2005.

Qwest said it made the decision to switch wireless partners because it looks “at Verizon Wireless as the undisputed industry leader,” according to company spokeswoman Kate Oravez.

AT&T and others might, in fact, dispute that claim. But at least it’s fair to say that Qwest considers Verizon Wireless superior to Sprint.

Under the new deal, Qwest will resell Verizon Wireless service under the Verizon Wireless brand. It will be able to sell service to businesses and government customers; it does not have that flexibility under the contract with Sprint.

Under that existing Sprint contract — a five-year deal that expires in the summer of 2009 — Qwest has sold “Qwest Wireless” branded service but that rides on top of the Sprint backbone and uses Sprint’s technology. Qwest has been concerned that it was not allowed to sell Sprint handsets until 120 days after the phones are sold in Sprint stores, making it tough for Qwest to compete.

Qwest now has around 850,000 customers in its own branded service. The company will seek to move those customers to its Verizon Wireless. Those who don’t move will continue on the Sprint backbone, but Qwest will cease to sell new customers into its own branded service.

Ed Snyder, a telecommunications industry analyst with Charter Equity Research, said the news is bad for Sprint Nextel because Qwest is among its biggest mobile partners.

“It adds to their woes,” Mr. Snyder said of Sprint Nextel.

It also is an interesting tradeoff made by Qwest. It has decided that the benefits of partnering with Verizon Wireless offset any brand name sacrifices it makes by no longer selling mobile service in its own name.

Bad news turns out to be good, and vice versa. We don’t know yet.

Deutsche Telekom might edge in to grab the biggest share of US market by acquiring Sprint any minute. Nobody knows when the tipping point will come.

WiMAX will be commercially available in USA at least 7 to 8 years ahead of LTE, which is 4G technology for both AT&T and Verizon. Sprint’s current weakness might lure Some Asian and European market players,who have dealt with more advanced broadband technologies.

†Posted by Quemann

Quemann you are right on the money except you leave out the eventual merger of Qwest and verizon. When US West jettisioned there wireless years ago it set the stage for their ultimate aquisition. it was a stategic blunder that not even Nacio and Anshutz could have pulled off. Look for Qwest to be a play some time later this year.

Cheers

www.networkwarriors.com

†Posted by Jeff Dahlgren www.networkwarriors.com

Jeff - No way. Qwest has the least attractive cost structure and future potential of all the majors because of the geography that it covers - rugged terrain, population densities/incredibly sparsely populated areas, etc.

Also, no offense intended, but your website (link above in your post) is one of the worst I have ever seen!

†Posted by FreeRange

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