Does Qwest’s $17 billion of debt prevent it from investing in new technologies?
A: The question has never been how much do you spend, but what do you spend it on? That’s the difference between successful and unsuccessful companies. If you take the wrong bet, it doesn’t matter if you spent five times the amount.
Also, our capital spending is not based on debt level but on our revenue projections. If you look at our ratio between revenue and capital expenditures, we are actually in line with the rest of the industry.
Q: What is the right bet?
A: If you are in the telecom business, you want to invest in broadband. Not just DSL, but higher speeds of broadband. We are making more investments with getting fiber (optic cable) in the ground and building inherently intelligent networks. This means a whole bunch of features that will be available in the next 12 months. You will be able to listen to your phone voice mail on your PC or on your TV set.
Q: What about WiMax (the new wireless technology for phone and high-speed data)? Will that allow Qwest to once again have its own mobile phone network?
A: You never know what is going to happen in the future, but certainly, that is in the back of our minds. Players change. Who is king today may not be king 10 years from now or 10 years ago. There is a lot of different moving parts.
Q: Where is Qwest putting fiber in the ground right now?
A: Where it makes sense, we’ll do it. We are doing it a lot in new neighborhoods in Arizona and Utah. We are firmly in the mind-set that in existing neighborhoods it makes absolutely no sense to trench up people’s yards to run fiber. But in brand-new homes where the trenches are open the cost difference between fiber and copper is negligible.
In existing neighborhoods, we will start building fiber to an area closer to the home, which we call the node. From there, we will place electronics that will pump higher bandwidth to the customer. That is an area that we are quite committed to and will deploy more and more in metropolitan areas.
Q: What speeds do you hope to reach with fiber to the node, compared with today’s DSL Internet speeds of 1.5 megabits per second?
A: In 2005, the number will be close to 20 mbps (megabits per second). But by the first half of 2006, it will be closer to 35 mbps. If we provide video, we will use a chunk of that bandwidth for that. Data compression technologies have improved dramatically. Suddenly you can be pumping high-definition TV across something you would not have even imagined a year ago.
Q: Qwest began offering Internet phone service and new consumer bundles this year. But consumers can’t bundle their VoIP (Voice over Internet Protocol) phone service with other Qwest products. Why not?
A: VoIP is not an easy experience for a customer. You order the service, a few days later the box arrives, you have to plug it into a power outlet and then connect it to the router, get it configured and plug the phone into it. But what about the phone in the kitchen? It’s a complete challenge for customers. Technology shouldn’t drive the customer’s decisions. Ease of use, pricing, value, those things should drive customer needs.
Q: Your family is from Singapore. How did you wind up in Denver?
A: My parents moved to Canada in 1988 when I was going to school in Iowa. My dad and sister speak French, but the rest of my family communicates in English. My dad is a surveyor by training, my older brother is a banker, my younger brother is a physician, and my sister is a teacher, while I am an engineer
I met my wife in college (her name is Joe Joe). She grew up in Kuwait and Iowa, so we decided to settle down in Iowa after college. My wife worked for US West in Des Moines, while I worked for the power company there (Iowa Power).
When she got relocated to Minneapolis, I quit my power job and joined a small power research company in Minneapolis. Then she got relocated to Denver, so I had to quit again. We moved to Denver and I joined US West, so that I would not have to keep changing jobs. She is now a stay-at-
home mom, with our three kids, who are the best thing that ever happened to us. I have been with US West/Qwest now for 11 years.
Q: What are your favorite gadgets?
A: My favorite gadgets are my BlackBerry and iPod. I have always been a Mac user, and that’s what we use at home.
Edited for space and clarity from an interview with staff writer Ross Wehner.
