Zacks Analyst Blog Highlights: Qwest Communications, Alcatel-Lucent, AT&T, Verizon and Sprint Nextel

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Here are highlights from Wednesday’s Analyst Blog:

Qwest Meets, Boosts Outlook

Qwest Communications (NYSE: Q) continues to invest in building necessary infrastructure to boost network capacity and availability. The company is devoting a major portion of the overall CapEx in expanding its fiber-to-the-node (FTTN) network capacity to increase broadband network performance. FTTN deployments reached over 3 million homes with 500,000 homes added in the quarter.

Through a joint venture with Alcatel-Lucent (NYSE: ALU), Qwest is upgrading its fiber-based network infrastructure to offer top Internet speeds of 100 gigabits per second (Gbps). Recently, the company introduced a new fiber-based Ethernet backhaul wholesale service for wireless operators. We expect these new business opportunities to drive growth moving forward.

However, Qwest remains more challenged than the other regional telephone companies (Baby Bells) in the US such as AT&T (NYSE: T) and Verizon (NYSE: VZ) given the lack of its own wireless and satellite TV services. This has prevented Qwest from achieving meaningful penetration in these lucrative markets.

Qwest’s transition from a mobile virtual network operator (MVNO) to wireless reseller has resulted in lower wireless revenue. Since 2004, the company has been marketing Sprint Nextel’s (NYSE: S) wireless products and services under its own brand by operating as an MVNO on Sprint’s network. However, Qwest will officially terminate this service on Oct. 31, 2009. Nevertheless, the company will continue reselling Verizon’s products and services (under Verizon brand).

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