Qwest on Wednesday reported a decline in phone customers but announced new promotional prices in an effort to pick up more Internet business.
The fall-off in telephone revenues contributed to a 24 percent decline in second-quarter net income to $188 million, compared with $246 million a year ago. Operating revenue for the quarter was $3.4 billion, compared with $3.5 billion a year earlier.
“Under more challenging conditions in some of our markets, operating results were mixed,” said Qwest chief executive Ed Mueller.
Qwest shares fell 14 cents Wednesday to $3.45. The stock has dropped about 50 percent this year.
Qwest said it lost 1.1 million residential and business phone lines over the past year, an 8.2 percent drop, as competition from cable and wireless providers took a toll on traditional phone service.
But sales from data, Internet and video services grew 9 percent in the second quarter compared with last year.
The company announced Wednesday that customers signing up for its standard- speed Internet service will receive a 12-month promotional rate of $14.99 a month, compared with the current charge of $29.99 with a two-year commitment.
Promotional discounts also are being offered on Qwest’s bundled Internet and DirecTV service, as well as on higher- speed broadband. The company said its highest-speed offering is now available to more than 1 million customers in 18 markets.
Helping to counter the disappointing earnings report, the Federal Communications Commission said Qwest has won partial regulatory relief on rules governing the commercial Internet market.
The decision lifted pricing restrictions on what Qwest can charge to business customers and rival carriers for using its high-speed Internet network.
“This relief will enable Qwest to have the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations,” FCC Chairman Kevin Martin said in a statement.
But the ruling drew criticism from Littleton-based TW Telecom Inc., formerly Time Warner Telecom.
“There is simply not enough competition for these enterprise broadband services to keep prices affordable for most businesses,” said Kelsi Reeves, vice president of federal government relations for TW. “This decision is not in the best interest of America’s businesses.”
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
