A year ago, the Montana Power Co. said it would sell all of its energy-related operations and invest the proceeds in its telecom subsidiary, Touch America. The deal gave young Touch America $1.3 billion in cash and no debts.
The company put some of that cash to good use in 2000 when it acquired Qwest Communications Internationals long-distance operations in 14 Western states, boosting its customer rolls by 200,000.
Touch Americas fiber-optic network now covers 18,000 miles and will reach 26,000 miles by the end of 2001, with a strong tilt toward the Western half of the U.S.
CEO Robert P. Gannon says the company still needed a clean break from its utility parent to make the most of its networking assets. "We were getting tangled up in our underwear, so to speak, by being in all of these businesses," he says.
Wholesale business now accounts for 45 percent of Touch Americas revenue — a number likely to remain steady over the next couple of years. The company is partnered with Qwest in a wireless wholesale deal.
Most of Touch Americas work will focus on growing its business data services, now providing about 40 percent of revenue. Residential phone service accounts for most of the remainder.