Update: Qwest drops Sprint for Verizon

Qwest Communications International will resell Verizon Wireless mobile service, ending a five-year deal with Sprint Nextel.

Customers of the regional landline carrier will be able to buy Verizon mobile service through Qwest, buy the services as a bundle and eventually be charged for all Qwest and Verizon services on a single bill, the companies announced Monday. Customers will also be able to choose “wireless only” and get a separate bill from Verizon. The offer will begin by the end of September.

Qwest got out of the mobile business in early 2004, selling its own CDMA (Code-Division Multiple Access) network to Verizon and making a deal to resell Sprint’s service. Like the Verizon agreement announced Monday, that was a five-year deal. The Sprint arrangement will expire in February 2009, but there will be transition support for some time afterward, according to Qwest spokesman Tom McMahon.

Sprint, the nation’s third-largest mobile operator behind AT&T Mobility and Verizon Wireless, has come under fire recently for poor customer service. Qwest’s decision comes at a bad time for Sprint, which has been shedding subscribers.

The company, formed by the merger of Sprint and Nextel in 2005, is looking at dissolving that deal in some way, the Wall Street Journal reported Monday. Nextel’s network uses a different technology from Sprint’s CDMA network, and Sprint has kept it going, missing out on probable cost savings from standardizing on one technology. The carrier is looking at selling Nextel to an investor group or spinning it off, the Journal reported.

Verizon Wireless, a joint venture between Verizon Communications and Vodafone Group, is the second-largest U.S. mobile operator, with about 67 million subscribers.

Qwest has been reselling Sprint service under its own brand as an MVNO (mobile virtual network operator), so it has only offered a subset of Sprint’s handsets and service plans, McMahon said. With Verizon, it will resell everything the mobile operator offers, so Qwest customers will have more choices. Another advantage of the new deal is that Qwest and Verizon Wireless will work together on bidding for government and enterprise contracts, McMahon said.

Qwest provides fixed-line telecommunications and broadband service in 14 states, in addition to reselling DirecTV satellite video. In February, Qwest said it had about 824,000 wireless customers.

The two biggest U.S. carriers, AT&T and Verizon Communications, as well as the major cable operators all are aiming to bundle voice, data, video, and mobile services in some form. Bundles are expected to help the service providers better hold on to customers over time.

Sprint is the biggest U.S. carrier supporting MVNOs, which buy network capacity wholesale from larger service providers and resell it under their own brands. But many MVNOs have bowed out of the business, finding it harder than expected to operate a mobile service and make money at it. Disney, ESPN and highly publicized startup Amp’d have been among the dropouts.

Sprint was not immediately available for comment.