Buyers for Qwest long-haul network likely to be scarce

If Qwest is indeed seeking to sell its long-haul network, it may have a hard time finding a buyer among the usual suspects. A Wall Street analyst says that a sale is "unlikely" for various reasons.

Qwest is purportedly seeking between $2 billion to $3 billion in cash for the assets in order to service its debt. Wall Steet telecom analyst David Barden said that regulatory hurdles are likely to inhibit some buyers, while others lack capital. Qwest might have strategic value to a large local phone company, but the timing is off.  Barden suspects Qwest is fishing before it goes back to the debt market.

Regulatory concerns will likely keep AT&T and Verizon away from a deal.  AT&T's merger with Bell South was bogged down by a Republican-led FCC, so it is "uncertain" what will happen now that the Democrats are in control. 

Level 3? Doesn't have the cash, lots of debt already? TW Telecom? Same thing: no cash, lots of debt already.

Barden believes Qwest is in better shape than its current stock and debt pricing would suggest, with investors getting an 8.5 percent dividend yield.

For more:
- Barron's blogs about Qwest's prospects.  Article

Related articles
WSJ: Qwest eyeing sale of long-haul network
Should AT&T go on a buying spree? - FierceTelecom
Telco acquisitions for the most part slowed in 2008

Suggested Articles

Vodafone Business announced this week that it has launched a new resource hub to help businesses bounce back from the impact of the COVID-19 pandemic.

CenturyLink's Shaun Andrews has a contrarian view in regards to how much the pandemic fueled digital transformations.

Data center provider Stream Data Centers is leaning on Cox Business' fiber network for its new data center campus in Goodyear, Arizona.