Qwest CEO aims to keep 'Spirit of Service' intact.

• Author: Cote, Mike
• Position: COTE'S [colorado] - Ed Mueller, chief executive officer of Qwest Communications International Inc. - Interview

In an era when cell phones are threatening to make land lines go the way of roadside phone booths, the top post at a traditional telephone company might not sound like such a plum job.

[ILLUSTRATION OMITTED]

For telecom industry vet Ed Mueller, running Qwest is a chance to direct the former Baby Bell's future as a competitive provider of high-speed Internet and data services.

Mueller gets to mark his one-year anniversary with Colorado's largest public company next month by touting its "Spirit of Service" during the Democratic National Convention as the official telecom provider of the Denver event. Qwest also will be the official supplier at the Republican National Convention in Minneapolis in September.

Qwest (NYSE: Q) employs about 36,500 workers and logged sales of $13.8 billion last year. The company formerly known as US West earned national notoriety when former CEO Joe Nacchio resigned in 2002 as the Securities and Exchange Commission began a probe of the company's accounting practices. Nacchio was convicted on 19 counts of insider trading in 2007, but a federal appeals court reversed the conviction in March and ordered a new trial.

Six years after Nacchio's exit, Mueller, 61, helms a company that has survived its legal battles but faces a challenging telecom market, a slumping economy and shareholder pressure to improve its performance.

We talked with Mueller recently at the company's headquarters in downtown Denver during an interview taped for ColoradoBiz TV. The following Q&A was edited for clarity and space.

Q. Since you became CEO in August, the economy has softened and Qwest's share price has lost half its value (trading below $4 in late June). What are some of the challenges you're facing right now in the industry?

A. We are heavily dependent on housing. And the mortgage meltdown, the financial meltdown and loss of incoming calls as well as the loss of access lines (home phone lines), that's a challenge for us. But that's one-third of our business. The other two-thirds of our business, which are wholesale as well as our business markets group, are doing well. Our challenges are to get the access lines or figure out a way to diminish the loss.

Q. Revenue from data, Internet and video services represented 37 percent of Qwest's total revenue for 2007, and it's up to 40 percent for the most recent quarter. How much growth do you see for 2008?

A. Our services--data, IP, that whole series of products--is where the future is, which...