Qwest Communications International Inc, which is currently building out its planned US voice and data communications, is boosting its customer base with the move to acquire publicly held Phoenix Network Inc of Golden, Colorado. Phoenix Network is a non-facilities-based reseller of long distance services with around 40,000 customers, almost exclusively in the business market. According to the company, it has generated around $75m in revenues over the last twelve months. Under the terms of the acquisition, $28.5m in Qwest common stock and up to $4m in cash will be exchanged for the outstanding shares of Phoenix Network as of the close of the acquisition. The cash portion of the consideration is being withheld pending the outcome of litigation to which Phoenix Network or its affiliates may have certain potential liability. The transaction, expected to close in the second quarter, is subject to the approval of the Phoenix Network stockholders as well as state and federal regulatory approval. Qwest is building out a 16,000-mile network linking over 125 US cities and plans to complete it in the second quarter of 1999. But the fact that the network has yet to be completed has not stopped the Denver, Colorado firm from making money out of it. At the end of October, the company announced it had completed less than 20% of the network, but managed to turn in a third-quarter net profit of $12.7m on revenue of $188.9m. Currently, 3,350 miles are activated from Los Angeles to Indianapolis; and from Dallas to Houston. Qwest is also extending its network 1,400 miles into Mexico with completion slated for late third quarter 1998. Separately, Qwest has also clinched a deal to provide network capacity to Apex Global Internet Services Inc. Under this agreement, Qwest will supply 10,000 miles of high-speed OC-48, 2.4Gbps-fiber optic cable in a contract is valued at $260m. Qwest will also take 19.99% of AGIS common stock and a seat on the AGIS board of directors.
