Denver-based Qwest Communications has big plans, after announcing a return to profitability Wednesday.
The company is trying to beef up its Internet speeds to better handle online traffic, such as movie downloads, and is researching the potential of rolling out WiMax, a new wireless, high-speed Internet access technology.
Qwest has 1.7 million high- speed Internet customers, although it has continued to lose thousands of its traditional landline customers, said chief executive Richard Notebaert during a Wednesday conference call.
The nation’s fourth-largest telephone carrier saw first-quarter profits surge 54 percent on increased sales, lower costs and 198,000 new high-speed Internet customers.
Notebaert said about one-third of the company’s roughly $1.6 billion in planned capital spending for the year would be focused on upgrading broadband Internet access.
“I think there’s a real opportunity in the technology migration – from circuit-switch legacy network to an IP (Internet protocol)-based network,” he said. “All of this translates into an increased demand for data and other products.”
Qwest can serve 78 percent of its customers across 14 states with its current DSL lines. Notebaert said he plans to bring that number to 80 percent this year.
Qwest’s technology strategy is the right one, said Jeff Kagan, an industry analyst.
“Qwest is doing a great job focusing on newer opportunities such as data, Internet, wireless and television,” Kagan said. “Data services like Internet, cellphones, television are all growing. Qwest’s bundles of three and four products are strong, (with) 53 percent of customers taking a bundle.”
Net income for Qwest rose to $88 million, or 5 cents a share, for the three months ended March 31, from $57 million, or 3 cents a share, a year ago.
It was Qwest’s first profit since mid-2000 achieved without any gains from asset sales. The profit a year ago included a gain of $257 million, or 14 cents per share, from selling its wireless assets.
The company’s workforce has fallen to 38,737 employees, down 4.6 percent from a year ago.
The Associated Press contributed to this report.
Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.
