Cisco, Qwest team on major IP U.S. network

By Jack McCarthy
IDG News Service, 06/18/99

SAN FRANCISCO - Cisco and Qwest announced an agreement Thursday to develop one of the largest IP-based networks in the United States.

Under the deal, more than 80% of Qwest's telecommunications services will move over Cisco-built networks, the companies said. The deal also involves application development and the marketing of Internet services. Both companies will co-develop applications for Internet-based data, phone and image services for businesses and consumers, they said.

"Cisco is moving forward with the integration of data, voice and video over the Internet, and Qwest has a high-speed Internet network," says Jeanette Gibson, a Cisco spokeswoman. "By working together, we can speed the migration from traditional networks to Qwest's high-speed network."

The announcement follows closely on the heels of Qwest's $55 billion bid to purchase US WEST and Frontier Communications. That deal would allow Qwest to move US WEST's traditional network onto Qwest's IP backbone.

Qwest's proposed acquisition of US WEST will greatly strengthen its plans for building its Internet network, said John Chambers, Cisco president and CEO. "US WEST is leading all local exchange carriers in the migration of their traditional telephone networks to the Internet," he said.

Once Qwest completes the acquisitions, it will migrate the US WEST and Frontier networks from circuit switching to IP, the company said.

Meanwhile, the Cisco-Qwest agreement should also significantly enhance Cisco's sales of telco equipment, said Sanjay Mewada, an analyst for The Yankee Group.

"The agreement will provide Cisco with a very significant footprint in the telecommunications market," he said. "And if Qwest buys US WEST and Frontier, it enables Cisco to sell to US WEST."

The Qwest Macro Capacity Fiber Network, using the newest optical networking, will reach more than 18,500 miles in the U.S. when it is completed later this year. An additional 315-mile network will be completed by year-end, the company said.