Qwest ready to go to video
Like other U.S. telephone companies, Qwest is getting set to pump video and TV services into homes in order to counter recent moves by cable providers to sell Net-based phone services.
"We hope to be able soon to offer our customers video services as part of a bundle," Qwest Chairman and CEO Richard Notebaert told analysts Thursday, following the release of the company's first-quarter earnings.
Notebaert said during a conference call that Qwest is now finalizing partnerships with various providers of video content and that a new offering is expected "soon," though he did not elaborate. Qwest intends to craft joint marketing deals to match up partners' video offerings with its own voice, data and wireless products, he said.
Qwest is the third of the nation's four major phone companies to tip its hand about upcoming video services. SBC Communications recently said it intends to offer video, and BellSouth is reportedly testing a video service. Verizon Communications hasn't yet given any indications about video.
Most analysts see the eventual move into cable TV and other video entertainment as part of a trend among cable and telephone companies to use bundles of steeply discounted services to attract and keep customers. Cable companies sell TV and broadband access at discounted rates when they're bought as part of a package of services. Telephone companies offer similar deals on telephone and broadband connections.
Until recently, telephone companies didn't worry about the prospect of cable operators adding voice services to their bundles. But the growing sophistication of voice over Internet Protocol technology, which turns voice signals into digital packets for dispatch over the Internet, lets cable companies sell packages of telephone service, cable programming and broadband connections.
A danger in bundling is that companies may set prices so low that their profit disappears. But Notebaert signaled Thursday that more price cuts for services are on the way, likely in response to the recent broadband price cuts from Verizon. Qwest executives meet on Friday to make the decision, he said.
"It seems to me that...we're going to have to discount it further, and we would expect to do that," Notebaert said.