Qwest’s Cox on Broadband, Video, IT & More

Management World — The Spirit of Service may have saved Qwest from bankruptcy at the turn of the millennium, but Neil Cox, Qwest’s executive vice president, said understanding where the customer is headed will help it thrive in the future.

“In 2001-2002, no one gave Qwest a chance for survival,” Cox said in a keynote at TM Forum's Management World in Orlando, Fla. “Today we have free cash flow of $1.44 billion and eight straight quarters of paying dividends.”

It also has 2.9 million broadband customers, 858,000 video subscribers and 10.6 million voice customers – almost all on its TDM network. It has pumped more than $13 billion back into its network and has a national network that is 10 Gbps today and may be one of the first upgraded to 100Gbps, he said.

Perhaps the biggest success story from Qwest has been in its enterprise business. That and its turnaround can be attributed to the same change: a return to its tried-and-true Spirit of Service campaign.

“We knew we couldn’t save Qwest from bankruptcy if we didn’t have a satisfied customer base,” Cox said.

That spirit kept enough customers to in turn keep the doors open while Cox and company set about cutting cost out of the business. Cox said his IT costs today are 30 percent less than they were four years ago. That is due in part to reducing the number of data centers from a dozen to three, one of which is in Bangalore, India, staffed by Qwest employees.

“We’re very stingy on how we spend our capital,” Cox said.

Looking ahead, Cox said he is focused on four things that will keep Qwest thriving. The first is enhancing the experience of the fixed line and to do that means including video. Next is a portal strategy for exploiting social media over traditional messaging like e-mail, which his daughter confirmed is dead. Broadband will be a key priority, “more important than the cell phone or cable TV.”

And circling back to video, Cox said only sports needs to be live. “You will see tons of business models around ad-supported video. Over-the-top is coming and Qwest is not going to stand in its way,” he said. “We are partnering for provisioning, maintenance and billing and they are our strengths for playing there.”

Cox said there will be a fourth screen based on 802.11 standards and that 90 percent of all broadband searching by consumers will be over wireless (today 802.11.) He added that enterprises will adopt cloud services as a standard way of doing business.

“It is not a technology; it is a new business model,” he said. However, he warned that the industry will never get there without standards and protocols everyone agrees to.