Qwest CEO To Partners: Hold On For Bumpy Ride In 2002

Qwest Communications International

Addressing an audience of Qwest partners here in Denver, Nacchio said 2002 will be a turbulent time for the telecom industry and warned partners not to buy into economic upturn hype.

"None of us [CEOs believe that the economy is coming out of this as strongly as people say on television," Nacchio said. "Most people tell you that the economic indicators are going right, but I want to see it happen in terms of how people are buying."

Don't expect much innovation either in the carrier space, but rather an emphasis on creating value and sticking to basics, he said.

"This year will be one of blocking and tackling vs. Hail Mary passes," he said.

id
unit-1659132512259
type
Sponsored post

Nacchio predicts the western United States region, in which Qwest dominates, will be about three months to four months behind the curve, just as it went into a recession about three months to four months after other areas of the country.

He also warns of more bankruptcies this year and a possible dip when companies in the sector release first-quarter financials.

Nacchio said this is the worst economic climate he's seen in his career, but he reassured partners that even in bad times, the potential to make money is still strong, particularly if you happen to be a partner of Qwest.

Nacchio pointed to Qwest's local and global reach, broad offering such as circuit switches to IP voice and distributed computing vs. what he views as competitors with too much focus on voice services.

Nacchio also pointed to partners as a critical asset that will set Qwest apart moving forward. "We feel good about this program. We feel it gives us competitive advantage."

Partners generate about 20 percent of Qwest's national revenue, but Nacchio said he expects this number to increase.

Nacchio also used the conference as an opportunity to take a shot at the negative coverage of the carrier's position. "The media would have you believe that we will be insolvent," he said.

Fueling these reports is the debt on Qwest's balance sheets and questions about its ability to pay off that debt.

An informal probe into its accounting practices by the Securities and Exchange Commission is not helping either, but Nacchio downplayed the inquiry, saying that the country is in a period of "Enronitis."

,>