Qwest CEO expects $1.8 billion in capital spending in 2008

Qwest Communications International Inc. expects $1.8 billion in capital spending next year, according to Chairman and Chief Executive Edward Mueller.

One of the priorities for the Denver-based telecommunications company is to upgrade its network. Roughly 23 percent of its neighborhoods feature fiber-optic lines connected to a central hub, which increases the connection speed available to consumers.

Mueller said he sees a penetration rate of 40 percent by 2011, and expects a payback from its fiber investment in five years based on a "modest" increase of $10 in average revenue per user.

Qwest's network upgrade plan covers 1.5 million homes at a cost of $175 per home. The company will deploy the faster connections to select areas within 20 markets, Mueller said.

"We will finish it in 2008 and decide where we want to be with it," Mueller said.

Despite the investment, Mueller said he envisions no plans for an Internet TV service similar to AT&T Inc.'s. He did say he supported an on-demand model of video delivery.

Mueller said he would also look to strengthen existing partnerships and form new ones. Qwest has deals with DirecTV Group Inc. for satellite TV and Sprint Nextel Corp. for wireless service.

Mueller declined to comment on any potential merger and acquisition deals.

Qwest will provide more details at its investor meeting on Feb. 28, 2008, Mueller added.

Shares of the company slipped 12 cents, or 1.7 percent, to $6.89 in Monday afternoon trading.