Qwest Abandons Sprint for Verizon

The move means Sprint, which is already struggling with a dwindling customer base, will lose more subscribers. Qwest contributed 824,000 to Sprint's rolls of 53.8 million subscribers at the end of last year.

Talk of Buyouts, Spinoffs

The news was released after the close of the stock market, on the same day as reports emerged that Deutsche Telekom (NYSE: DT) , the parent of T-Mobile USA , was mulling a bid for Sprint and Sprint was considering spinning off Nextel.

Sprint shares rose 83 cents, or 11 percent, to close at US$8.72.

Turning to Verizon

Qwest said it had signed a five-year contract with Verizon Wireless that will take effect this summer. Financial terms of the deal were not disclosed. Current wireless subscribers will receive a free, comparable Verizon Wireless handset, probably in the last three months of this year, said Qwest spokesperson Robert Toevs.

Toevs said the Sprint deal "was not right for us." With Verizon Wireless, Qwest will be able to sell wireless service not just to consumers, but to large corporate and government customers.

Qwest's brand won't be on the wireless service, as it has been under the Sprint partnership. However, those who combine wireless service with a landline or Internet service can get one combined bill from Qwest.

Mulling Options

Qwest has been reselling Sprint's service since 2004. Chief executive Edward Mueller said in February that the company was looking at its options in the wireless space.

Denver-based Qwest is the primary telephone service provider in 14 mostly Western states and operates a nationwide fiber optics network.

Verizon Wireless is a joint venture of Verizon Communications of New York and Vodafone Group of Britain.