Qwest has struck a deal to offer service from Verizon Wireless to its customers, parting ways with Sprint Nextel, its previous partner.
The five-year deal is part of a strategy by company chairman and chief executive Ed Mueller to offer top-of-the-line services from third parties that can be bundled together on one bill. Financial terms of the agreement were not disclosed.
Qwest provides wireless service to about 824,000 customers by reselling Sprint’s service. Qwest purchases cellular minutes from Sprint but creates its own packages and offers its own handsets.
Shares of Qwest closed down 5 cents at $5.36 Monday. The company is set to release its first-quarter earnings report and hold a conference call with analysts today.
Mueller has said the company has “a hole” in its wireless offering because it has been unable to offer the latest handsets and mobile technologies under its wholesale deal with Sprint, which ends next February.
With Verizon, Qwest will begin selling those cellphones and minute plans this summer. Existing Qwest wireless service will continue into next year, although later this year customers will be offered a comparable Verizon phone and plan at no additional cost, company spokeswoman Kate Oravez said.
“We will sell Verizon Wireless at Qwest Wireless stores,” she said. “All their plans will be available to Qwest customers.”
Qwest customers who have a separate Verizon plan will be able to bundle it with their Qwest service and put it on the same bill, Oravez said. Customers will also be able to walk into a Qwest retail store and sign up for Verizon service without having other Qwest services such as phone or Internet access.
Telco analyst Jeff Kagan says the flexibility offered under the new agreement is a good idea.
“Until now . . . they ignored the group of customers who wanted to buy wireless as a separate service,” he said.
But Kagan questioned why Qwest is ditching Sprint, which he says offers good service.
“Both Sprint and Verizon wireless phones perform very well everywhere I have tested them,” said Kagan, who is based in the Atlanta area. “So I don’t see a benefit of switching carriers.”
In addition to an enhanced consumer offering, Qwest will team up with Verizon to bid on enterprise and government contracts that demand wireless service, particularly under its Networx contract, Oravez said.
Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com
