Minor Attached Conditions Expected in CenturyLink-Qwest Merger; Combined Company Eyes Video
Any conditions that regulators could impose as part of approving the CenturyLink-Qwest merger would be nominal, said CenturyLink Executive Vice Chairman Tom Gerke in an interview. The combined company plans to stay focused on the core telecom market and more video-based services are expected as a result of the deal, he said. The deal is likely to be approved by regulators with attached conditions like obligations to expand broadband access or to provide it at certain prices, some analysts have said (CD April 23 p1).
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The transaction won’t require any refinancing so there’s no concern about increased expense, Gerke said. The combined company could better compete with long-haul and enterprise businesses like AT&T and Verizon, he said, adding there’s potential for a lot more facilities-based video competition. CenturyLink plans to roll out its IPTV services in five additional markets (it’s already in three markets), he said. The merger holds potential for more IPTV but any decision would be based on how the current market rollout proceeds, he said. Both companies have been dealing with line losses in the last few years and overall employment hasn’t been stable, Gerke acknowledged. The combined company could potentially enable the company to become a bigger video and enterprise competitor that offers a more stable employment environment for the long haul, he said. Additionally, there’s virtually no overlap market, so fewer layoffs would tend to happen, he said.
CenturyTel-Embarq integration was largely complete, Gerke said, the only thing left being the billing system integration. CenturyLink’s localized operating practice continues to improve customer retention and acquisition, especially in the larger legacy Embarq market areas, he said. The company expects to complete the final two legacy Embarq customer conversions by the end of Q3 2011, CenturyLink executives have said.
Meanwhile, wireless will give the combined CenturyLink-Qwest (neither have their own wireless networks) the opportunity to explore all alternatives, an industry official said. Qwest has a wireless partnership with Verizon Wireless. One thing the combined company could look at is whether to roll the agreement with Verizon across the entire footprint, he said. The combined company would be a more attractive partner for the wireless players, he said.