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Technology / AI and automation

QWEST MAKES MONEY WHILE IT BUILDS UP ITS FIBER NETWORKS

Qwest Communications International Inc, the expanding US high speed communications infrastructure builder, has completed less than 20% of its proposed 16,000 miles of super fast (two terabit per second) fiber optic network, but the Denver, Colorado-based company is already turning a profit. Third quarter net income jumped to $12.7m from losses this time last year of $5.6m while revenue rose 326% to $189.0m and the consensus of analysts’ estimates has the company penciled in for earnings per share of $0.42 for the full year. Qwest is currently operating just 2,800 miles of installed fibers, bringing in a useful $32m of revenues in the quarter, but the vast bulk of its income still derives from the construction and sale of additional fiber optic capacity which it lays in its own conduits but then then sells to other long distance operators like GTE Corp. Construction services have brought in or over 80% of revenues so far this year and at a gross profit margin of 32% this is very good business indeed. Selling so called dark fiber as the network grows has allowed the company to maintain an affordable level of gearing while pouring millions of dollars into its network infrastructure. The company has also had what must be one of the most successful IPOs in history. Its shares have risen from $28 in June to a peak of $65 just four months later. When its network is complete, the company aims to have the capacity to transmit the entire contents of the Library of Congress from one side of the US to the other in less than 20 seconds.

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CBR Staff Writer

CBR Online legacy content.