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Century Link Purchases Qwest

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Century Link Purchases Qwest

 
May 06, 2010

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  By David Sims, TMCnet Contributing Editor
 


News of Qwest's (News - Alert) impending purchase by Century Link sure did spread like an oil slick, and according to a post on TBI's Master Agent blog in late April, it went with "a cloud of misinformation and speculation" settling over us all.


Some say the sale is great for business, the blog noted, "providing a larger footprint for agents to sell products and services. Others aren't so sure, citing Century Link's previous inability to penetrate the B2B marketplace (though isn't that why Qwest makes sense?)."

At the time, the blog wrote that "the name Qwest will undoubtedly survive a while in the business marketplace," but the name of the new company will be CenturyLink: "There will be no new names, as Century Link is confident enough that their brand will carry into new territories and marketplaces. This was reaffirmed by Glen Post of Century Link during the conference call announcing the acquisition."

Reuters (News - Alert) recently reportedthat CenturyTel's first-quarter results topped Wall Street expectations, giving investors high-hopes for the success of its planned acquisition of Qwest Communications International:

"The shares of both companies rose after CenturyTel (News - Alert) also raised its financial guidance and Qwest beat earnings expectations, excluding a first-quarter tax-related charge."

As Reuters reported, the telephone companies "have been banking on cost cuts or acquisitions for profit growth as they face competition from cable and Internet phone providers in a market where consumers are cutting the cord to rely entirely on their cell phone."

CenturyTel, which does business as Century Link, has said it will buy Qwest for $10.6 billion in stock early next year. The purchase will combine the third- and fourth-biggest U.S. phone operators.

Reuters noted that its results were "boosted by its July purchase of another operator," Embarq (News - Alert).

"It's a good sign that the Embarq integration is going well for CenturyTel, which should give investors confidence of their ability to integrate Qwest," said Hudson Square Research analyst Todd Rethemeier, to Reuters, adding that he was impressed by operating and financial results at both companies.


David Sims is a contributing editor for TMCnet. To read more of David's articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Erin Harrison
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