Qwest Communications International is in talks with Verizon Communications to bundle its wireless service with Qwest's broadband and landline voice services, according to a Wednesday report in The Wall Street Journal.
Qwest, the only major phone company without its own wireless service, has been reselling wireless service from Sprint Nextel. But Qwest CEO Ed Mueller said earlier this week at his company's analyst conference that he is not happy with the arrangement and is looking for a new partner.
The problem with the Sprint deal is that Qwest is unable to offer the same services and handsets that Sprint offers when they are first introduced at Sprint. This lag time puts Qwest at a disadvantage, Mueller has said.
Instead, Mueller said he'd like a more tightly integrated relationship with a wireless operator that might enable the company to get paid a commission for subscribers or would be tightly integrated to its broadband or landline voice service.
Qwest has not confirmed that it has been talking to Verizon specifically, but Mueller mentioned that the company is interested in striking a partnership with any of the four major wireless carriers in the United States.
Meanwhile, Verizon Chairman and Chief Executive Ivan Seidenberg has confirmed that the two are in talks. The Journal reported that Seidenberg said Tuesday at a Merrill Lynch analyst conference that his company, which owns Verizon Wireless in a joint venture with Vodafone Group, has had conversations with Qwest about a possible wholesale deal.
Some kind of wireless deal is important for Qwest, not because the company expects to generate a lot of revenue from the service. Rather, Qwest believes that it's important to offer wireless as part of its bundle to keep customers loyal to its other profit-making services, such as broadband.
Mueller said this week that customers who sign up for only one Qwest service are three times more likely to cancel the service than customers who sign up for at least two services.