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Qwest Communications International, Inc. - Phone Service
/ Communications Services - Category Main Page
(303)
992-1400
1801
California Street
Denver, CO 80202
www.qwest.com
Sales
$14.3
billion
Business Description
Qwest
Communications International, Inc. provides local telecommunications and
related services, IntraLATA and InterLATA long-distance services and
wireless, data and video services within our local service area, which
consists of the 14-state region of Arizona, Colorado, Idaho, Iowa,
Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South
Dakota, Utah, Washington and Wyoming. We also provide long-distance services
and reliable, scalable and secure broadband data, voice and video
communications outside our local service area as well as globally.
We
currently operate in three segments: (1) wireline services; (2) wireless
services; and (3) other services. We also maintained, until September 2003,
a fourth segment consisting of our directory publishing business. Our
remaining directory publishing business was sold in September 2003 to a
group of private equity investors. As a result, for purposes of calculating
the percentages of revenue of our segments provided below, we have excluded
the impact of revenue from our directory publishing business. For additional
financial information about our segments see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Item 7 of this
report and Note 15—Segment Information to our consolidated financial
statements in Item 8 of this report. The segment revenue percentages
contained in this section are based upon financial results prepared in
accordance with generally accepted accounting principles in the United
States of America, or GAAP.
We market and sell our products and services to consumer and business
customers. In general, our business customers fall into the following
categories: (1) small businesses; (2) national and global businesses; (3)
governmental entities; and (4) public and private educational institutions.
We also provide our products and services to other telecommunications
providers on a wholesale basis. We seek to distinguish ourselves from our
competitors through our recent and continuing customer service initiatives.
Wireline Services
We offer a wide variety of wireline products and services in a variety of
categories that help people and businesses communicate. Our wireline
products and services are offered through our telecommunications network,
which consists of both our traditional telephone network and our fiber optic
broadband network. The traditional telephone network is defined as all
equipment used in processing telecommunications transactions within our
local service area and forms a portion of the public switched telephone
network, or PSTN. The PSTN refers to the worldwide voice telephone network
that is accessible to every person with a telephone and a dial tone. Our
traditional telephone network is made up of both copper cables and fiber
optic broadband cables and serves approximately 16.2 million access lines.
Access lines are telephone lines reaching from a central office to
customers' premises.
Our fiber optic broadband network extends over 180,000 miles to major cities
worldwide and enables long-distance voice services and data and Internet
services. We rely on our completed metropolitan area network, or MAN rings,
and in-building rights-of-way to expand service to existing customers and
provide service to new customers who have locations on or near a ring or in
a building where we have a right-of-way or a physical presence. The MAN
fiber rings allow us to provide these customers with end-to-end connectivity
for our broadband data services to large and multi-location enterprises and
other telecommunications carriers in key United States metropolitan markets.
End-to-end connectivity provides customers with the ability to transmit and
receive information at high speed through the entire connection path rather
than be limited by dial-up connection speeds.
Wireline Products and Services
The following reflects the key categories of our wireline products and
services.
Local voice services—consumer, business and wholesale. Through our
traditional telephone network, we originate and terminate local voice
services within local exchange service territories as defined by the state
Public Utility Commissions, or PUCs. These local voice services include:
• basic local exchange services provided through access lines connected to
our portion of the PSTN;
• switching services for customers' internal communications through
facilities that we own;
• various custom calling features such as Caller ID, Call Waiting, Call
Return and 3-Way Calling;
• enhanced voice services, such as voice mail;
• operator services, including directory assistance;
• public telephone service;
• voice customer premises equipment, or CPE; and
• collocation services (i.e. hosting of another provider's
telecommunications equipment in our facilities).
Recently, we also began to offer Internet protocol telephony (sometimes
referred to as voice over Internet protocol, or VoIP) in Minnesota on a
limited basis. This technology allows us to offer more features at reduced
costs to customers. We do not expect to recognize a material amount of
revenue from our VoIP offerings in 2004.
On a wholesale basis, we provide network transport, billing services and
access to our local network within our local service area to competitive
local exchange carriers, or CLECs, and wireless carriers. These services
allow CLECs to provide telecommunications services using our local network.
CLECs are communications companies certified by a state PUC or similar
agency that provide local exchange service within a local access transport
area, or LATA, including LATAs within our local service area. At times, we
sell unbundled network elements, or UNEs, that allow our wholesale customers
to build their own networks and interconnect with our network.
Long-distance voice services—consumer, business and wholesale. We provide
three types of long-distance communications services to our consumer,
business and wholesale customers.
• We provide IntraLATA long-distance service to our customers nationwide
including within our local service area. IntraLATA long-distance service
refers to services that cross local exchange area boundaries but originate
and terminate within the same geographic LATA. These services include calls
that terminate outside a caller's local calling area but within their LATA
and wide area telecommunications service or "800" services for customers
with highly concentrated demand;
• We provide InterLATA long-distance services nationwide. These services
include originating long-distance services for communications that cross
LATA boundaries and "800" services. Beginning in the fourth quarter of 2003,
we satisfied certain Federal Communications Commission, or FCC, requirements
that allowed us to begin providing these services throughout our local
service area using our proprietary network assets; and
• We also provide international long-distance services for voice calls that
terminate or originate with our customers in the United States.
Access services—wholesale. We provide access services primarily to
interexchange carriers, or IXCs, for the use of our local network to connect
their customers to their data and Internet protocol, or IP, networks. IXCs
provide long-distance services to end-users by handling calls that are made
from a phone exchange in one LATA to an exchange in another LATA or between
exchanges within a LATA. Competitive communications companies often operate
as both CLECs and IXCs.
Data and Internet services—consumer, business and wholesale. We offer a
broad range of products and professional services to enable our customers to
transport voice, data and video telecommunications at speeds ranging from
14.4 kilobits per second to 10 gigabits per second. Our customers use these
products and services in a variety of ways. Our business customers use them
to facilitate internal and external data transmissions, such as transferring
files from one location to another. Our consumer customers use them to
access email and the Internet under a variety of connection speeds and
pricing packages. We provide our data and Internet services in our local
service area, nationally and internationally.
Some of our data and Internet services are described below.
• Digital subscriber line, or DSL, which permits existing consumer and
business customer telephone lines to operate at higher speeds necessary for
video and high-speed data communications to the Internet or private
networks. Substantially all of our DSL customers are currently located
within our local service area;
• Asynchronous transfer mode, or ATM, which is a broadband, network
transport service that provides a fast, efficient way to move large
quantities of information over our highly reliable, scalable and secure
fiber optic broadband network;
• Frame relay, which is a switching technology that allows data to travel in
individual packets of variable length. The key advantage to this approach is
that a frame relay network can accommodate data packets of various sizes
associated with virtually any data protocol;
• Private lines, which are direct circuits or channels specifically
dedicated to the use of an end-user organization for the purpose of directly
connecting two or more sites. Private lines offer a secure solution for
frequent communication of large amounts of data between sites;
• Integrated services digital network, or ISDN, is a comprehensive digital
network architecture allowing users to transmit voice, data, video and
images—separately or simultaneously—over standard telephone lines or fiber
optics;
• Dedicated Internet access, or DIA, which offers customers Internet access
ranging from 128 kilobits per second to 2.4 gigabits per second;
• Virtual private network, or VPN, which allows businesses with multiple
locations to create a private network accessible only by their various
offices. VPN provides businesses with a cost-effective alternative to meet
their communication needs;
• Internet dial access, which provides Internet service providers, or ISPs,
and business customers with a comprehensive, reliable and cost-effective
dial-up network infrastructure;
• Web hosting, which provides data center services. In its most basic form,
web hosting includes space, power and bandwidth. We also offer a variety of
server and application management and professional web design services. We
currently operate ten web hosting centers, or CyberCentersSM; and
• Professional services, which include network management, the sale,
installation and maintenance of data CPE and the building of proprietary
fiber-optic broadband networks for our governmental and other business
customers.
On a wholesale basis, we provide collocation services, or hosting of other
providers' telecommunications equipment in our facilities. We also provide
wholesale private line services primarily to IXCs to allow them use of our
local network to connect their customers to their networks.
Distribution Channels
We sell our retail wireline products and services through a variety of
channels, including direct-sales marketing, telemarketing and arrangements
with third-party agents. We also provide the use of similar products and
services, and the use of our network assets on a wholesale basis, as
described above.
Wireline Services Revenue
For the years ended December 31, 2003, 2002 and 2001, revenue from wireline
services accounted for approximately 96%, 95% and 96%, respectively, of our
total revenue from continuing operations.
Wireless Services
We operate our wireless services segment primarily through our indirect
wholly owned subsidiary, Qwest Wireless LLC. In August 2003, Qwest Wireless
entered into a service agreement with a subsidiary of Sprint Corporation
that allows us to resell Sprint wireless services, including access to
Sprint's nationwide personal communication service, or PCS, wireless
network, to consumer and business customers, primarily within our local
service area. We began offering these Sprint services under our brand name
in March 2004. Under the service agreement, we retain control of all sales
and marketing, customer service, billing and collection, pricing, promotion
and product offerings relating to the Sprint services that we resell. The
service agreement provides that Sprint will be our exclusive wireless
provider and has an initial term of five years (with automatic renewal for
successive one-year terms until either party provides notice of
non-renewal). Through Qwest Wireless, we also continue to operate a PCS
wireless network that serves select markets within our local service area,
including Denver, Seattle, Phoenix, Minneapolis, Portland, Salt Lake City
and other smaller markets. Our wireless customers who are currently being
serviced through our proprietary wireless network will be transitioned onto
Sprint's network over time.
We market our wireless products and services through our website,
partnership relationships and our sales/call centers. We offer consumer and
business customers a broad range of wireless plans, as well as a variety of
custom and enhanced features, such as Call Waiting, Caller ID, 3-Way
Calling, Voice Messaging, Enhanced Voice Calling and Two-Way Text Messaging.
We also offer integrated service, which enables customers to use the same
telephone number and voice mail box for their wireless phone as for their
home or business phone.
For the years ended December 31, 2003, 2002 and 2001, revenue from wireless
services accounted for approximately 4%, 5% and 4%, respectively, of our
total revenue from continuing operations.
Other Services
We provide other services that primarily involve the sublease of some of our
unused real estate assets, such as space in our office buildings, warehouses
and other properties. The majority of these properties are located in our
local service area.
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