February 27, 2004 2:28 PM PST

Qwest calls for cell phone expansion

Qwest Communications International on Monday plans to begin selling a significantly expanded cell phone service region in an attempt to offset losses from the dwindling number of landline phone customers.

The carrier plans to begin offering a cell phone service plan that doesn't trigger roaming charges, as happens now whenever any of its 851,000 subscribers makes a cell phone call outside the 14 states Qwest built a cell phone network, executives said.

Qwest executives said Friday that the carrier plans as part of broader expansion efforts to sell cell phone service for the first time to customers located outside its 14 state area in the near future. They will mainly be corporate customers, according to the executives.

"What we were doing was totally inadequate to meet our customer needs and expectations," Qwest Chief Executive Dick Notebaert said.

About 80 percent of Qwest's current 851,000 cell phone subscribers won't need new phones to take part in the expanded networks, while the balance will have to upgrade, Notebaert said.

Qwest is making the expanded cell phone service available to anyone, but offers discounts if purchased alongside either a Qwest local phone line or broadband subscription. Pricing details are expected to be announced Monday.

Qwest's cell phone battle plan is typical of how regional Bell operating companies (RBOCs) expected to lose 25 percent of their revenue that comes from selling traditional dialing, giving way to cell phones, Internet phone calls and new competition from traditional phone service providers. By adding new services such as cell phones or Internet dialing, the RBOCs hope to stop the bleeding, Qwest Vice President Paul Golden said.

Qwest is the last of the four RBOCs to get into the cell phone business. But while Verizon Communications, SBC Communications and Bellsouth have entered the phone business by investing in cell phone operators, Qwest is doing it "virtually" through an agreement it reached in June so its cell phone customers could use the nationwide network of Sprint, the nation's fourth largest cell phone operator.

Sprint has a similar relationship with Virgin, whose Virgin Mobile cell phone service has a million subscribers. "We are not standing still in this area," Sprint Vice President Kurt Fawkes recently said.

Verizon Communications, the largest phone company in the country, is a partner in Verizon Wireless, the nation's largest cell phone service. Bellsouth and SBC are part-owners of Cingular Wireless, which recently announced a bid to buy competitor AT&T Wireless for $41 billion.

 

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