DENVER—Qwest Communications International Inc. reported a profitable third quarter with net income of $194 million, a reversal of the $144 million loss the company reported in the same quarter last year. Further, Qwest said the penetration rate of its service bundles increased 6 percent compared with a year ago.
The carrier said its third-quarter net income included a $92 million benefit from a tax-sharing settlement and severance charges of $43 million.
The company’s bundle penetration increased to 56 percent, up from 50 percent a year ago. Qwest reported that “sales of voice packages plus three or four products continue to drive significant growth” and that its average revenue per user is rising as well. Qwest’s ARPU jumped 7 percent from the same time last year, from $47 to $50.
“Customers are embracing our higher-value, higher-ARPU products that contribute to our revenue while our cost structure and investments remain focused and rational,” said Qwest chairman and chief executive officer Richard Notebaert.
However, wireless revenue was up just 3 percent compared to the last year’s third quarter. Qwest added 4,000 wireless customers during the third quarter, ending the quarter with 781,000 wireless subscribers.
Independent telecom analyst Jeff Kagan described 2006 as “Qwest’s turn-around year. The recovery has taken years to get there, but this year the company became profitable and that is continuing this quarter.”
He noted that Qwest—which has a mobile virtual network operator relationship with Sprint Nextel Corp.—only offers wireless as part of its bundle, not as a stand-alone product.
