Qwest Communications International Inc., the provider of local-phone service in 14 U.S. states, will use cash to pay down debt and buy back shares, Chief Executive Officer Edward Mueller said.
The company’s cash will also go toward paying its dividend and toward profitable and “disciplined” investments, Mueller said today at a meeting with analysts in New York.
Mueller, who joined the company in August, faces competition from cable companies such as Comcast Corp., which offer packages of phone, Internet and television service. Denver-based Qwest is spending as much as $300 million this year, triple last year’s total, to speed up its Internet connections.
Qwest rose 33 cents, or 6.3 percent, to $5.60 at 1:18 p.m. in New York Stock Exchange composite trading. The shares had dropped 25 percent this year before today.
The project to speed up Internet connections, which will benefit about 1.5 million homes, may help Qwest reduce customer turnover and increase market share, Mueller said.
“Customers will pay for higher speeds,” Mueller said. Consumer high-speed Internet connections represent a $1 billion market opportunity, he said.
The company also is considering new strategies for its wireless business, which resells service from Sprint Nextel Corp. Qwest could change its relationship with Sprint or find a new partner, Mueller said.
