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Qwest CEO enthused over wholesale
Notebaert tells a telecom conference that wholesale business is "just as important as retail."
By Andy Vuong, Staff Writer
Denver Post
Thursday, November 29, 2006

Qwest's wholesale business is usually overshadowed by the Denver-based phone company's retail business, which includes residential customers and big corporate clients.

On Wednesday, the wholesale segment took center stage.

"Wholesale is just as important as retail," Qwest chief executive Dick Notebaert said during a keynote speech at a wholesale telecom-services conference at the Grand Hyatt in downtown Denver.  "It is really critical to our future."

The wholesale business employs about 1,000 people out of a companywide workforce of roughly 38,000.  But it generates $3.7 billion in revenue annually, about a quarter of Qwest's total revenue of nearly $14 billion in 2005.

"It's a vital part of the overall revenue stream," Qwest Wholesale Markets executive vice president Roland Thornton said in an interview.  "We generate a lot of revenue with 1,000 people."

Qwest's wholesale business customers include wireless carriers, local resellers, Internet service providers and long-distance and international companies.

Thornton believes international and domestic long distance will be key drivers of growth for the wholesale business.

During his speech, Notebaert also reiterated Qwest's strategy of reselling DirecTV satellite-TV service rather than launching a broad and expensive video initiative to better compete against cable companies such as Comcast.

"Why do we feel that we would have to invest long-term paybacks when someone else has a product or a service that we can partner with, add value to and contribute?" Notebaert said.  "We resell DirecTV.  We are being very successful at it."

During a panel discussion following Notebaert's speech, Broadwing CEO Stephen Courter said the industry is going through a second wave of consolidation.

The first wave occurred after the Internet bubble burst in 2000 as companies scrambled to avoid bankruptcy.

The second wave is being driven by demand from consumers, Courter said.

"The customer demand for a converged network ... is driving us toward this consolidation," Courter said.

Broomfield-based Level 3 Communications announced plans in October to acquire Broadwing, based in Austin, Texas, for roughly $1.4 billion.

About 200 industry officials were expected to attend the two-day conference, which concludes today.

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong32@yahoo.com.

http://www.denverpost.com/business/ci_4743465