Okay, technically Qwest is not a tier two ILEC, but it's the smallest of the remaining old Baby Bell regime. After being left at the altar in 2005 when fellow RBOC Verizon trumped its efforts to purchase the former MCI, Qwest, with the exception of conducting some smaller acquisitions and merging of its legacy Malheur Bell operations into its fold, has been relatively quiet on the M&A front. The service provider got a boost in 2005 when it tapped Diana Gowen to head up the ILEC's government division and then winning a seat on the General Services Administration's (GSA) Networx contract in 2007. And while Qwest has won some notable contract wins under Networx, including NASA and the Veterans Affairs Administration, the awards have been, in a word, slow.
The industry did get some glimpse of Qwest's M&A thinking in May when rumors emerged that Qwest was reportedly putting its long-haul assets on the selling block. Not surprisingly, the usual suspects AT&T and Verizon came up as did NTT Americas, Sprint, Level 3 and even tw telecom as potential suitors. Just as quickly as the potential bids emerged, any chance of a sale died quickly as it came out because apparently they thought they were being low balled for the assets. More recently, Qwest's CEO Ed Mueller indicated that while there's more opportunity for telco consolidation, he's not about to just strike a deal just for the sake of expanding its size and provide what he says would leave "our shareholders are advantaged and not disadvantaged." Stopping short of indicating any potential merger or asset sale targets, Mueller seems to be waiting for the right mix of options.