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Qwest to Acquire Metro Fiber Network

Qwest Communications International Inc. will add some more fiber to its network diet, announcing that it will acquire privately held OnFiber Communications Inc., an Austin, Texas-based company that runs an optical network in 23 metro areas.

Under the agreement, Qwest will pay $107 million, with an option to substitute as much as $35 million of Qwest shares for cash. The transaction should close in the third quarter.

OnFiber has built up a business in high-bandwidth, all-fiber connections serving mostly large business and government clients in markets where Qwest does not reach.

Acquiring OnFiber’s 23-market network will strengthen the regional Bell operating company’s out-of-region metropolitan coverage and cut costs by reducing reliance on third-party network operators. Qwest said savings could reach $25 million annually.

"This is a sound, complementary deal for Qwest, OnFiber and both companies' customers," Qwest executive vice president, business-markets group Tom Richards said. "This union gives businesses choice in national providers. OnFiber brings a unique approach to delivering and managing custom fiber networks that has proven to be efficient and cost-effective."