Qwest expanding its DSL availability

The Associated Press
Wednesday May 23, 2001

DENVER — A speedier Internet connection could be coming to a neighborhood near you. 

Qwest Communications International says it will make its high-speed digital subscriber line Internet service available to 1.3 million more homes by the end of the year.- 

New technology being installed in 11 western states in its 14-state local phone service territory will let Qwest more than double the distance customers can live from a central office and still receive DSL service. 

Only customers within about three miles of a neighborhood central office could access Qwest DSL before, said Augie Cruciotti, executive vice president of Qwest local markets. 

The expansion will be phased in over two years in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, Oregon, Utah and Washington. The company said more than 6 million customers should be able to receive its DSL service by the end of 2002. 

The phone company had 306,000 DSL customers in the first quarter and hopes to have 500,000 by the end of the year. 

Competitors offer high-speed connections through cable, satellite and wireless technology. 

“They definitely need to do this to compete with cable,” said Cary Robinson, senior research analyst for U.S. Bancorp Piper Jaffray. “A lot of customers can’t get DSL that want it. They need to continue to expand their offering, not just in their 14-state region, but nationwide.” 

Demand for fast Internet connections has risen as people do everything from birthday shopping to playing cards online, said Murray Smith, Qwest vice president for DSL. 

“We’re trying to get as much DSL out there as quickly as we can,” Murray said. 

Qwest has been able to provide DSL over copper phone lines to some customers through its central offices, the hubs where individual phone lines come together. 

But DSL could be offered only over shorter distances because the signal quality deteriorates over distance. 

The new technology lets Qwest place remote equipment in neighborhoods to provide a little boost, allowing information to go farther on DSL. 

The new program was aimed at expanding offerings in major metropolitan areas, some smaller communities and areas that never had Qwest DSL service, the company said. 

Expanded DSL offerings would help Qwest in its strategy to offer bundled services, such as phone and Internet service together. The strategy should help Qwest increase revenue while lowering costs per customer, and keep customers loyal to Qwest, said Simon Reeves, senior analyst at Pacific Crest Securities. 

“Churn is not a particularly enormous problem right now, but as the market gets increasingly competitive, say in the next two to five years, churn could go up,” Reeves said. “The more services you have bundled together, the stickier customers tend to be.”