Qwest Communications (Q) is reportedly accelerating its network throughput to offer top Internet speed of 100 gigabits per second (Gbps) for its premium enterprise and government customers.
The third-largest US regional carrier has already started to upgrade its fiber-based long-haul network infrastructure, which is expected to continue through 2010. Existing long-haul networks deliver top speeds of approximately 40 Gbps.
To implement this network enhancement, Qwest is leveraging the technology of Alcatel-Lucent (ALU), which will provide the 100 Gbps Ethernet service routing capabilities. The company aims to be the first carrier to commercially launch 100 Gbps services in the US. However, Verizon (VZ) is also in the race with its 100 Gbps network deployment planned in 2010.
Leading carriers across the globe are increasingly focused on accelerating Internet network speeds given rapidly growing demand for greater bandwidth capacity. Qwest has reported that total bandwidth consumption increased by 43% year-over-year in the current year driven by the growth of video and other high-bandwidth applications.
100 Gbps networks have emerged as the next major Ethernet standard. Demand for 100 Gpbs service in enterprise data centers is ten times greater than the existing fastest deployments. At this speed level, users can transmit a 2-hour high-definition movie in 9 seconds or fully loaded 500 Gigabyte hard drive in 46 seconds.
Qwest’s broadband Internet business is growing at a healthy pace, driven by the company’s continued investment in necessary infrastructure to boost network capacity and availability. Qwest is aggressively investing in deploying additional fiber-to-the-node (FTTN) capabilities to boost its broadband network performance.
At the end of first-half 2009, the company had approximately 2.9 million broadband customers, with 34,000 new customers added in the last quarter.
The ongoing initiative to deploy 100 Gbps capability will render greater overall network efficiency while improving cost-effectiveness. Additionally, this expansion will enable the company to effectively address increasing customer demand for higher network throughput.
Qwest remains more challenged than the other Baby Bells (US regional telephone companies) such as AT&T (T) and Verizon given the lack of its own wireless and video services.
We expect the company’s business prospects to be driven by continued strong demand for its broadband Internet service. However, access line losses due to competition and economic volatility may continue to erode operating revenue in the forthcoming quarters.
Read the full analyst report on “Q”
Read the full analyst report on “ALU”
Read the full analyst report on “VZ”
Read the full analyst report on “T”
Zacks Investment Research
