Qwest Communications reported Q2 revenue of $3.6 billion, down about 0.8% percent from Q1 primarily due to competitive pressures in local voice services. These losses were partially offset by continued growth in long-distance and data services. There was a net loss of $91 million or $0.05 per share. Some highlights from the quarter:
- Access lines declined 1.4%, excluding the impact of services reduced as part of the WorldCom bankruptcy. Total access lines declined 2.3% in the second quarter, primarily because of increased competitive activity and seasonal trends. Unbundled Network Element-Platform lines in service increased to 675,000 and represent approximately 4.1% of total access lines.
- Qwest noted increased UNE-P activity from MCI and AT&T in selected markets. Richard C. Notebaert, Qwest's CEO, said these losses are still "way too high" and that Qwest was "late to market in introducing all-you-can-eat bundles of local + long distance service."
- Total access lines at the end of Q2 were 16,504,000, compared to 16,740,000 at the end of Q1. The Q1 total was adjusted to reflect the loss of 145,000 lines due to the WorldCom bankruptcy.
- DSL subscription figures were not disclosed but Notebaert described the numbers as "pretty dismal." Qwest has re-negotiated its partnership with MSN. On 06-August-03 new pricing for DSL bundles were introduced and since then the daily DSL activation rate has increased.
- During Q2, Qwest added 590,000 long distance voice access lines in its local service area. In 2003, Qwest has signed up 1.12 million access lines for long-distance service.
- Qwest continued to build out its service bundle through a wireless wholesale agreement with Sprint PCS and through video sales agreements with EchoStar Communications and DIRECTV.
- There was "increased stability" in Qwest's wholesale division in the quarter.
- CAPEX in the quarter was $490 million.
