Summary
1. Almost a year ago, we pointed out that “Qwest might as well be considered an independent telco.” 2. Around that time, industry analysts were encouraging Qwest to combine with a big RLEC because it would be “tremendously accretive.” 3. It would be practically hopeless for the RBOC to even begin competing on the same level as AT&T or Verizon.
Analysis
As the source article states, “Qwest Communications could become a consolidator of rural telcos if and when it divests its long-haul network....” There is no doubt that the analysts are correct in stating that “a sale...would position the remaining ILEC business to be a player in the M&A game itself going forward.”
A potential Qwest merger with independents would probably make it the most powerful service provider in that sector. There would be the long-term financial stability offered by the RBOC. In addition, it would be the only RLEC with several NFL cities. And it is better to be the big fish in the growing RLEC market (in terms of future acquisitions of lines from AT&T and Verizon) than to be a distant third in the declining tier 1 access line market.
Qwest could become like the ex-GTE of the independent space. Only it would be a lot better.
