Qwest Takes Long-Distance Network off the Block

Qwest announced this morning that it is retracting the sale of its long-haul network after failing to attract a sufficient bid. Its long-haul network serves as a wholesale business, carrying long-distance voice and Internet traffic for other phone carriers.

According to reports in The Wall Street Journal, Qwest was seeking $2 billion to $3 billion, but offers totaled less than $1 billion.

“Although there was significant interest in this process from prospective buyers, the company and its board of directors have determined that the long-distance network asset holds far more value to Qwest shareholders, and is more strategically important to Qwest and its customers than is the alternative of pursuing a transaction,” the company said in a release.

Qwest is experiencing competition from wireless and cable companies and landline loss, but it lacks a mobile phone unit to compensate for the decline in customers.

The nation’s third largest telephony provider is saddled with $560 million in debt maturing in 2009, and another roughly $2.2 billion due in 2010. Despite the news, Qwest affirmed its 2009 financial outlook in this morning’s release.

Qwest initially put its long-haul network up for sale in late March.

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