In exchange for the making some 10,000 miles of its high-performance network available to AGIS, the Dearborn, Michigan, company will issue Qwest a 20-percent equity stake, a seat on its board of directors, and $260 million, the two companies said.
AGIS said it will use Qwest's high-speed network to deliver new services--such as telephone and video transmissions--over the Internet. The two companies also will enter into a joint marketing arrangement for those services.
Qwest said it plans to add an additional 6,000 miles to its network and to serve 125 cities representing 80 percent of the Internet traffic originating in the United States. The deal could be a major boost to AGIS, which provides backbone services to regional Baby Bells and Internet service providers.
"What this does is allow AGIS to offer their customers extremely advanced through-put capacity," said Lew Wilks, president of Qwest's business markets. "In a marketplace that is traditionally capacity-constrained, they've moved into a position where they can leverage bandwidth."
In afternoon trading, Qwest was up 2.1 percent at 66-7/8.