Moby Med from Marvell
Best and Worst of Hotel WiFi

My Take on The Failure of Qwest and the Century Tel Sale

A lot has already been written about the CenturyLink pending merger with Qwest, including a rather interesting summary by TMCNet's Emperor For Life, Rich Tehrani. Tehrani cites a few online folks we all know and they each have gone on to share their perspectives. Peter Radizeski stated the obvious, in his comment about how the investment bankers are driving "M&A" activity. That makes this merger not much different, except in scale, to the recent Covad & MegaPath tie up.

In bankers terms, CenturyLink is a "roll-up" play. Taking similar industry companies, bringing them together to squeeze out efficiencies, usually by taking the best parts of each, and canning the rest. That means layoffs, staff retirements, furloughs or in some cases selling off parts or assets to others who need them.

Overlooked in most recaps though is what CenturyLink got with Qwest beyond the customer base and a larger national footprint in markets where customers are not alway only yards away from one another, is the Qwest IP network, which may be the newest IP network in the ground in the USA. Qwest built it's nationwide network right along side Level3 back in the 90s. The fiber runs along the railway tracks and is about three feet over from those same fiber runs according to people in the know. That fiber network was supposed to be one of the key growth portions for Qwest, but along the way, the company, embroiled in merger attempts, financial games and even executive criminal activity lost their right of way as a company. But the asset remained buried in the ground, partially lit. Qwest's Cyber Centers were supposed to be the future of the Internet, massive hosting, switching and routing facilities dotting the USA. The idea was right. The timing, and leadership wrong. So as the cable companies began to pick off customer after customer, and as wireless became more en vogue, Qwest, with neither a clue how to play in the wireless game, nor any real focus on the IP side of the house, became less and less of what they were supposed to become, and more of the old fashioned telephone company.

They got bought because what the have, fits, with the rest of the pieces Century Link has already bought. As AT&T moves towards One Network, and as Sprint migrates to an industry supplier of bandwidth and 4G connectivity, CenturyLink moves into compete with Verizon and AT&T for enterprise connectivity, with the makings of some very good in the ground assets. A largely dark fiber network. Likely they will find a way to work with the cable operators, especially in rural area. This may make them a useful suitor to SinglePipe, a company whose business is being shopped around the country still, but where no one is jumping. While I think they are a better fit for another piece of Covad, CenturyLink has the cash and right now is on a buying binge.


Feed You can follow this conversation by subscribing to the comment feed for this post.

Andy, good points that I missed. Some folks mentioned that CTEL would dump the Cyber Centers, but I don't see that happening. They are required to get Enterprise data contracts.

I just don't agree that bigger is better. Scale certainly means costs can be spread out farther, but that doesn't guarantee quality in service delivery or customer care. We see that with both RBOCs, who can't or won't maintain the PSTN and who have let so many people go, they can't find the paperclips.

CTEL isn't exactly a back-office powerhouse either. Still stuck in the 1970s mentality of ILEC. To win Enterprise away from the Ma and Pa Bell requires more than network. It requires flexibility and ease to work with. Also, you have to know where the paperclips are, because corporate types won't get fired buying from Ma and Pa bell, even if paying a premium.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name is required. Email address will not be displayed with the comment.)