Qwest hiking rates for a la carte services
By Jeff Smith
Rocky Mountain News
Tuesday, June 10, 2008
Qwest Communications is raising the rates of a la carte products
-- such as caller ID and call forwarding -- by 7 to 28 percent.
The new rates take effect July 1.
In a letter to customers, Kim Whitehead, vice president of
marketing, said: "Changing market conditions require that we
continually evaluate our prices, product offerings and
Qwest spokeswoman Margaret Fogarty stressed the rate increases
affect fewer than 20 percent of Qwest's customers. The
rate hikes don't affect customers with a home-phone package that
includes several features, she said.
Donna Jaegers, a telecommunications analyst for Janco Partners
in Greenwood Village, said the price increases seem
designed to convince consumers that it's more economical to
order a home-phone package than buy features separately.
She also said Qwest may be increasing rates to help offset the
current economic weakness. The telco lowered its guidance
on Monday because of the weakening economy.
Earlier this year, Qwest raised the prices of some of its
Internet services by as much as 11 percent.
Qwest's letter doesn't say costs of providing the services have
increased. The services "basically are software packages
loaded onto the switch," Jaegers said. "The cost for any
one service is very, very minimal. It's like putting
(Microsoft) Word on a server that gets used by a thousand
Call waiting is increasing from $6 to $6.50 a month, caller ID
from $7.50 to $8.50, and call forwarding from $3.50 to $4.50.
In all, more than 25 residential and 19 business services are
Qwest basic phone service costs $14.88 a month. A home
package with the choice of three features costs $29.99 a month,
while a package with up to 10 features goes for $34.99 a month.
smithje@RockyMountainNews.com or 303-954-5155
Telco lowers guidance
Qwest's revenue and earnings will fall at the lower end of this
year's forecasts, Chief Executive Officer Edward Mueller said at
an investor conference in
Shares dropped nearly 4 percent to $4.52.
The economy, competition and customers who replace their home
phones with wireless devices have hurt sales, Mueller said at a
conference hosted by Deutsche Bank. Qwest's February
forecast called for sales near or slightly below its $13.8
billion in 2007 revenue. It also now expects its operating
earnings to be relatively flat.