Qwest's acquirer plans to keep decisions local

By Andy Vuong
The Denver Post

April 27, 2010

CenturyTel, which is acquiring Qwest, plans to inject the company with a locally focused business model, where key service and pricing decisions are made market by market.

The Monroe, La.-based rural phone operator will likely roll out its own television service in some of Qwest's territory, a strategy Qwest chief executive Ed Mueller killed in late 2007.

And even though the company will be based in Monroe, it will "keep a significant employee presence in Denver," CenturyTel chief executive Glen Post said Monday.

"Denver is one of our largest markets, so it's a very important city for us to be involved in," said Post, who will be chief executive of the combined company. "We're fully committed to having a major presence in Denver."

An avid duck hunter and not a skier, Post rarely visits Denver. But that will change, he said.

CenturyTel, which operates as CenturyLink, announced plans Thursday to buy Qwest for about $10 billion in stock and $11.8 billion in assumed debt. The deal, expected to close in 12 months, requires approval from shareholders and regulators. Post said the companies had been discussing a potential merger since the fall.

Qwest employs 7,900 in Colorado — the largest concentration of workers in one state for either company. CenturyTel employs 1,800 in Louisiana.

Combined, the companies employ roughly 50,000, but layoffs are expected if the deal is approved, particularly in Denver. Post said some Denver workers will be offered transfers. But the company's workforce of 1,000 at its headquarters in Monroe won't grow significantly.

"We're more interested in having people in the markets we serve," Post said.

The combined company will serve 17 million land lines in 37 states.

A decision hasn't been made on whether to occupy Qwest's 52-story headquarters building at 1801 California St. beyond the existing lease, which runs through June 2012. Denver will be the regional headquarters for the company's business-services division.

Post said CenturyTel brings to Qwest a successful "local-market operating model."

"We are very focused on moving decision-making and accountability as close to the customers as we can," Post said. "What may work in Denver may not work in Orlando or Minneapolis. We remain very flexible with the products and services we offer and how we bundle."

Post is a fan of IPTV — a form of Internet television that requires the expensive build-out of fiber-optic cables to neighborhoods. The company is testing the service in three markets and plans to add five more by mid-2011. Post said he's confident the company will offer IPTV in some Qwest markets.

CenturyTel stock fell 37 cents to $33.96 Monday. It has dropped $2.24, or 6 percent, since the deal was announced. Qwest stock rose 3 cents to close at $5.31 Monday.

Andy Vuong: 303-954-1209, avuong@denverpost.com or twitter.com/andyvuong