Good morning my name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the Qwest Second Quarter 2007 Earnings Investment Community Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. Ms. Comfort, you may begin your conference.

Good morning everyone and welcome to our call. We are here to discuss our second quarter results. With us on the call this morning are Dick Notebaert, our Chairman and CEO, and John Richardson, our Executive Vice President of Finance and CFO. Before I turn the call over to Dick, I would like to remind everyone that we will be making forward-looking statements. These statements contain risks and uncertainties, which could cause actual results to differ materially from those expressed or implied here on the call. Those risks and uncertainties are on file with the SEC. Additionally, we do not adopt analysts' estimates nor do we necessarily commit to updating the forward-looking statements that we make. Also, let me mention that in order to supplement the reporting of Qwest consolidated financial information, the company will be discussing certain non-GAAP financial measures, including EBITDA, free cash flow and net debt. A full reconciliation of non-GAAP measures is included in the quarterly earnings section of our website. With that, I'd like to turn the call over to Dick.

Thanks, Stephanie and good morning, everyone. Welcome. The second quarter results we reported this morning, we continued to do what we said we would, once again making progress towards our long-term goal of ongoing value creation. With our continued focus on the fundamentals Qwest is in a position to deliver exceptional customer service, profitable growth, discipline spending and ownership reward on a sustainable basis. Our results in the second quarter produced higher sequential revenue, strong margins and earnings growth, disciplined investment spending and increased pre-cash flow and substantial progress on our share buyback program. We also achieved exceptional customer service levels; further evidence of our commitment to differentiate Qwest through superior customer service. Our results continue to demonstrate that our strategies are working and our intention is to maintain our focus and our discipline. As most of you know I have announced my intention to retire pending completion of a search for my replacement. That process is well under way. In the mean time I want to reassure all of our loyal constituents that Qwest is placed to move forward on a truly solid foundation. The company is well positioned for future growth with solid financials. The right mix of assets and impassioned customer service focused organization and a culture of disciplined investment. This morning I will provide a brief review of the second quarter highlights and John Richardson our CFO will go through the details and then of course we will do the question-and-answer portion. Let me go forward. First, revenue totaled $3.5 billion, representing a slight increase sequentially and a modest decline year-over-year for the second quarter, which is traditionally, seasonally soft. Both comparisons reflect our de-emphasis of lower margin legacy products such as dial access and continued access line losses. But that result was offset by growth…

Thanks, Dick and good morning everyone. Our results in the second quarter reflect the steady progress and the discipline approach that you have come to expect from Qwest. This quarter we again delivered improved revenue trends, margin expansion, profitability, and free cash flow growth. Continued execution of our initiatives will position us to achieve our objectives for the year. Let me now share some highlights of the quarter, beginning with revenue. Revenue totaled $3.5 billion in the quarter with continued strength in data and internet products in all channels. Total revenues were slightly up, slightly sequentially and flat, compared to the prior year. While growth in the strategic products continue to offset in some cases outpace the impacts of our deemphasize of dial access carrier consolidation and seasonality. While our growth rate, certainly reflect the normal seasonality hurdle, we would expect in the second quarter of any year, we still increased our revenues sequentially, as growth in the strategic products continued to be strong. Business products such as iQ, metro Ethernet, Hosting and Voice-over-IP all continue to show high single-digit or double-digit sequential growth. Mass market data Internet and video grew by 41% compared to the prior year and also data grew by 10% on the same basis. In the mass markets channel, revenue again grew both sequentially and on a year-over-year basis. The consumer group metrics tend to be the most affected by seasonal factors of the second quarter, as people relocate or snowbirds in our dozen states move to their summer residences. This year, we believe that the normal seasonal declines of access lines, and broadband, and video ads were compounded by signs of consumer market pressures. Despite these seasonal and other factors, we continue to see improvement in key factors bundle penetration increased to 60% from 59%…

Thanks, John. Let me reiterate our priorities for '07. We are to drive modest revenue growth, to improve EBITDA margins, especially for optimization and productivity initiatives and to increase free cash flow. I think the strategies are working, you can see it in the progress towards our goals. We have momentum is tangible. We have a positive outlook for the future based on the opportunities we have in front of us. Now I would just like to say, that in this quarter as we have in each of the quarters for the last five years, we have done what we said we would do. That's very important to us. So now let me stop our comments and ask for anybody's questions.

(Operator Instructions). Your first question comes from Simon Flannery with Morgan Stanley

Okay. Thank you, good morning. Dick, I wonder if you could give us a little bit more thought on the timing of the CEO search and let me may get some news and if it does indeed drag on your commitment to stay with the company and related question. Is it, does it make sense to think about the dividend or something else while you are in the transition of the leadership role, wouldn’t it make more sense to let the new CEO have a few months to decide his priorities before you decide anything on capital return? Thanks.

Okay. Thanks, Simon. First take the most important part of the question and that’s further rewarding share holders. That’s the Board of Directors decision and the Board as it did last year following a very disciplined process. It's not just up to one person to make that decision. So, I think my own opinion, this is the personal opinion is it the Board is going on its way and reviewing this. We talked about it in each board meeting, the committee meetings in between. And so, I would not anticipate that there would be delay in the Board's decision and the process they are following. As to the timing of my replacement, let me backup to the second part of your question, which is I’m committed and I’ve told the Board I would stay here until my replacement is sitting in my office and then my chair. And I will fulfill that commitment, as I've each of the commitments I've made since I have been here. We're already in the process, I think in my comments I made that they are moving along my expectation again it's a personal expectation is that, that will happen very soon. Let me say differently sooner rather than later. I would remind everybody on the call that under the current SOX 404 rules, performance or result have to be certified by the CFO and the CEO. It would be very difficult for someone to step in here the day before this call, where the results are published, and sign a document saying certifying those results. I wouldn’t do that. And I would not ask someone nor do I think our Board permit. Our Board would not ask someone, let me not to speculate to step in here, and sign that document, it just doesn't feel right. In fact, you would have to question the selection of that person if they sign it. So, I think, we are in a very good spot, and I would expect it to happen sooner rather than later. Thanks for question.

Thank you. And best of luck for the future.

Well, thanks Simon. You too right.

Your next question comes from David Barden with Banc of America.

Hey guys, thanks a lot. Maybe two questions, if I could. First, obviously the big question is on the margin. This quarter obviously Dick, you kind of lend a lot of stability to the business that you've talked about lumpiness in margins in the past. But I think, that with the hand on the tiller changing over the next quarter, I think any incremental unit of visibility you can kind of give us on some of the puts and takes, as we go into the back part of the year. Do you anticipate more hiring impacting the margins more in the back part of the year? Do you expect that leveling out some of the benefits coming through on the revenue line to cause some sequential improvement there? I think fewer surprises rather than more on the margin front would be appreciated in the back part of the year. And then on the, the wireless side of things, I guess there has been appreciation for the attempt to marry wireless to the wireline business, and bring down churn et cetera. But it seems to be yielding modest fruit at best and there has got to be costs associated with that, as you look at the cost benefit analysis of that kind of MVNO structure. Where do you stand on that and how long do you stick with the strategy? Thanks a lot.

Yeah, thanks David. Let me talk about the margin. I think, I've said all along and been very specific that it’s not a straight line. So, the fact that it's a few basis points off the quarter, last prior quarter. It doesn’t really cause me to pause, and I don’t consider it a surprise. What you have liked it to have been higher in the straight line of course. What I feel very good about it though is that we've said I think when we talked about December quarter result. We talked about the fact that as we look at ’07, we will continue our productivity efforts, and you heard John talk about what we've done there on facility cost, and on SG&A, and on total employee cost. So, I think that is on track and we're doing that. I've also said, and I think we've all said both John and I in our communication that we need modest revenue growth. So, let me talk about that for a minute. We expect mass market that distribution channel to be in that 2 to 3% range. As we do our product mix shift, and you saw the ARPU go up, you saw data sales go, and I would tell you May was just not a good month. I mean, May was a soft month, and someday I'll figure that out, why May always comes in a little soft compared to other months. Then we look at the enterprise of the business market, you saw slight increase if you took the dial part business that we de-emphasize, it look pretty good. But the point is, we’ve said that in the second half of the year, we would expect to see mid-to-high single digit revenue growth and to that point what we see…

Well, it might be our last chance, Dick. Congrats and good luck.

Yeah, thank you. Thank you very much.

Your next quarter comes from Jonathan Chaplin with J.P. Morgan.

Good morning. Just a couple of quick followS up from the margin, if I may. So firstly on the 10 million in expenses related to hiring business sales people, of these with salaries are associated with the new business sales people that you brought on that will reoccur or it is a more of a onetime expense when reoccur in subsequent quarters. And then on the facility cost savings 24 million in facility cost reduction, I'm wondering how repeatable that is on a sort of a quarter-over-quarter basis and then looking at the cost of sales line item it was roughly flat on a sequential basis. So, what were the pressures in the quarter that sort of counteracted the 24 million in savings that you got from the facility cost reduction? Thanks.

Sure, Jonathan, I'm John Richardson good morning. The $10 million is increased marketing and salaries associated with the business markets channel. It's the result of hiring that over 200 sales people that we had that we put on the payroll at the beginning of the year. So, from a comparative standpoint it will not pressure the number further going forward. We are comfortable that in BMG, that we have the right assets both physical and people in place to drive the growth, and as Dick mentioned on business markets channel. We did have one of the best sales months ever in June. So, we feel good about that.

Let me add one thing, John. Jonathan, if you think about it you're adding the expense, and we've started this back in like in December to add these people on. And so, getting the expense and their sales was just starting to see some results. So, what's you're going to have is you've got some expense here on these sales people. But in the first few months they are on the payroll, they are not going to be selling right away. I mean, even if they are selling you aren't going to get the revenue booked. It's the same thing, where you can have a great sales month, but the revenue won’t shop until two months later. And that’s the point, we've been trying to make. And I think these people are starting to be more productive and we will see the revenue associated with those sales, as we go into the third quarter. And the third quarter for us is going, we think starts that ramp, where we said we'll be as we move towards higher national market share in both the enterprise and the mid market space. So, I just want to, you are not going to fire these people, but I'll tell you what they are going have to be productive as we go forward. And then, while John just pondering the other question on the facility costs, I would, that’s going to be a run rate, that’s going to continue to go that way, that’s not just a one timer. So, we will continue to bring that facility cost down, and we’ve said all along that we are benchmarked against the pre-mega mergers, and we ought to be in that $0.50 and $1 range on facility cost. John, you want to pick that up.

Yeah. I think that the interesting thing about our facilities cost is we do think that the savings will improve the year. We had a $24 million sequential increase in facilities cost…

Decrease.

Decrease and 49 on year-over-year. Those facilities cost optimization programs tend to annuatize themselves, and they grow on one another as we go through the year. So, we're all comfortable with our goals on facilities cost. We continue to have further opportunity to reduce costs there, and the team is working on them day in and day out. And it relates to cost of sales the sequential kind of flatness of the thing offsetting facilities cost, and also employee related costs, which was down. As we do have, we did have increased marketing spend sequentially in the quarter. It was flat on a year-to-date basis from last year of year-to-date. But we would expect that the marketing spend is stabilizing, as we go throughout the year Jonathan.

I want to say one thing. I want to repeat or paraphrase what John said in his remarks. And that is the growth in our data products, this product mix shift, we’ve been talking about in areas such as Metro Ethernet, our MPLS-based products that we used in iQ networking our integrated access in our hosting that's what point us towards our optimism in our ability to grow revenues and I think as a team if I speak for all of those on the management team that's what give us this feeling of greater confidence.

But Dick, just be clear, you should see margin expansion in the second half both from continued cost reduction as well as from incremental revenues being laid of your improving cost structure?

Yeah. Jonathan that's the model that we have to follow, because we proven we can do the productivity; we have to execute against the marketing opportunity, we have got less competitors, new products. So, yeah, that's the model that we are executing against. So, yes, we would expect to see margin expansion as we execute and if we execute, which we've already got the sales and we just got convert into revenues.

Great. Thank you very much.

Yeah, thank you.

Your next question comes from Frank Louthan with Raymond James.

Great, thank you. Just to be a little bit more clear, you're talking for the, you're seeing still comfortable with up to $400 million EBITDA growth in the year and it appears that you are on a run rate to do closure to 300 million. So, if you are still comfortable getting the high-end does imply pretty significant margin ramp in the back half and I hear you, you're saying that your comps in the top line growth about. Can you be a little more specific on maybe on the range of EBITDA expansion were some more specifics on, when we should start to see the gap close a bit? Thanks.

Frank, John Richardson, good morning. Frank as we mentioned up to $400 million is our state of goal and we haven’t change that. And we believe that the confluence of the improved sales and revenues in the business market channels coupled with the continued improvements that we’ll see in our cost structure as we see facilities cost optimization saving if you will being or being annuatize into our financial statements and continued focus on productivity and all areas of business particularly in the network that the $400 million is clearly opportunity for us to grow up to $400 million its clearly within in reach.

Let me just add to that to John’s comment. The benefits, we have already done, we keep talking about the sales and converting into revenue. The benefits have already been undertaken and that naturally allows or drives margin expansion force. And that’s why we can sit here and say this, it kind of feels like déjà vu all over again because you got more than it was year 18 months ago, someone said we wouldn't hit 30% and we said, yeah, we will do it. And so we feel that revenue from those sales that already been made that we can get to that and so we, again I use the words, we feel personally, confident that we are going to hit in that range.

I think that the other thing that you could a look at is really in prior years particularly last year, we have a tendency to see EBITDA growth in the second half of the year as result of in particularly the cost savings initiatives that we put in place in the first half of year. And this year also is a bit different; it's because we are seeing a change in the sales and revenue trends in our business markets growth, but that that clearly is a different pattern of behavior in our business in 2007 in comparison to prior years.

Okay. Thank you that's helpful. And Dick you mentioned on the wholesale side, replacing some revenue from BellSouth. Can you give us some color on where you are on that, I've seen that some of that's already begin to roll off going to AT&T. How much, where are you in that process, and how much long you'll think, it will be before that drag is gone? Thanks.

I think first of all it was the BellSouth as well as the Nextel. And I think both of those, if you break the products down into two categories one is what we called carrier that's stopped it's just generic. I mean that’s just grooming. It’s a minute of use, so the minute can go here and there, and it takes no great expertise to move it, you just groom it over. I think we're about done on the carrier migration. There is still a little bit luck. But we're about done there. And so, if you looked at what TU has done, and we have an NDA, so I don’t want to give you the number. But I think I will probably violate the NDA. I think we are pretty much got that wrapped up. Then in the case of BellSouth, we have something call, what we call White label. And basically think of this as they are reselling our services. But we are also doing all the billing, the backroom all the support functions. So, in essence we are an integral part of their team. To convert that is a much bigger challenge because the billing system has to change, the integration of the billing system has to change its not just like grooming minutes or traffic from one road to or one path to another path, that will take quite a bit of time. I think you saw this with the WilTel situation, where it took longer time, considerable amount of time to migrate it, and they want is deeply embedded, as we were in BellSouth. So, I think that will take quite a bit of time and I'm not sure with what we're doing growing the reseller management and the higher value product that you are going to see much more or less. So, we think it's about flat. And I want to say again, I think for all the neighbors about how is going to be the end of the world, when Verizon did it, and AT&T, BellSouth did it, I think that our wholesale team has done an outstanding job by keeping it flat. So, if we didn’t have that migration, we would have had pretty good growth.

Thank you very helpful.

Yeah.

Your next question comes from David Janazzo with Merrill Lynch.

Good morning.

Good morning.

You received the forbearance ruling a few months back the local and long distance. And I think Dick you had talked about a meaningful opportunity there, did we see that, is that in the second quarter numbers, can you quantify?

John, can talk about. He is the one that's managing that. But my personal view, I don’t think, we saw much of it that we're executed --

Not much of it in the second quarter. I'd say that most of the small severance charge we took in the quarter was related to the forbearance activity. But we continue to march on in getting those costs out. As, we've indicated earlier that we expect the real benefit is coming in 2008 related to the forbearance.

We'll get some of it second half of this year. But the annualized rate which is again a meaningful number, you really have to have everything in place on the run rate to get there. I think we will see it in the third and to a greater extent in the fourth quarter. But there is some software work we've to do and that will kick in next year, right john.

Yeah. That's correct. And again, the forbearance project, if you will is one of many of our productivity and cost saving initiatives that we've that's one that's gotten a little bit more publicity, but we do have a lot of activity that is ongoing around our cost structure.

If you want to get a hand along the number you might ask one of the other two people that didn’t get the forbearance petition granted. What they think their number might be and then you could relate it to us. We've been a little hesitant to just hand the number up, but they might be more willing.

Okay, Dick. Thanks.

Yeah, thank you.

Your next question comes from Chris Larsen with Credit Suisse.

Hi Dick and congratulations as well.

Thank you.

A couple of questions I just want to clarify, we are talking about wireless earlier and I just want to make sure you did say that wireless is at or near positive net income on a standalone basis. Secondly, one of your other questions was talking about a little bit about cash return. I think you sort of intimated that may be the Board wants to wait to get a new CEO in place before they do that. Could I have a sense for when the Board would be meeting next and how long they want to wait to have a new CEO in place before they might announce a cash dividend?

Let me answer the second part of your question. First, John can do the first part afterwards because he made that statement. I did not indicate that the Board would slowdown because they got a new CEO. I don’t think they will slowdown, that’s my opinion. I don’t think its dependent upon the CEO. I think its dependent upon our cash flows and what we said in our ability to further reward shareholders with the utilization of that cash and you all can run the spreadsheets just like I can. Where the Board is on this, we have a board meeting mid August and then, but don’t think that is one something would happen. I am just saying that board meeting happens and if I go back and look at last year, we've made that decision, I think it was in the October timeframe. And if you think about why you might do it in October, you just look at your closer towards knowing which your annual cash flow run rate is. And again I’m not indicating, when they might do it, but I would not expect them to dally or slowdown. And my replacement I would think we would be very enthusiastic about further rewarding shareholders because it makes a very strong statement about where we are financially. And so I guess, I would not see the later, but again that’s my opinion and it is a Board of Directors decision, not a CEO decision. So, John you want to do the first part.

On the wireless, yes you are absolutely right. Our wireless is basically breakeven to slightly positive any given quarter to slightly negative on standalone basis. And I think the important thing though on wireless is, its part and parcel to having a competitive in successful bundle in the market place. And it's clearly the big reason why we can continue to see improved bundle penetration. This quarter our bundles are 60% of our primary access lines up from 59%. We also added 30,000 subscribers from the prior year, so wireless is a big part of the success that we are having in the mass market channel.

Great and one another question, Dick maybe your perspective on this, we’ve seen high-speed internet ads from whether to cable companies Comcast, Time Warner or the other Bells all eat down year-over-year. And I’m wondering what your perspective is, is it last year we had a big, was an outsized year or is there we hitting a full penetration numbers or is anything else that you think might be going on in terms of DSL/High Speed Internet penetration.

No, I don’t think we were getting saturation and the penetration level. I mean, our penetration level is over 20% now. And I don’t think that's it. I think for whatever reason I went back last night and then just kind of look back over a number of years. And for whatever reason and initially it's an exception like I think in '06 the second quarter probably on high-speed Internet connection was a little higher. But usually that's second quarter for whatever reason is a little softer than the first quarter what I use to call the back-to-school quarter which is that late August, September rush that we don’t see as much. So, I don’t think that's it. I just think it’s a little bit of seasonality that happens. It's also possible that we've all read about the housing starts, and stuff like that and that inventory, and they're down as many home sale. So, I don’t know if that has anything do with it, but it could. And then the last point, I'd make is, and I think this is important and I'm retiring. So, I can say this, people is like an anxious line, people say oh, my gosh, it's an access line. But what we really ought to be looking at is that's the first step. Then the next step is to go from 1.5 megabit to 5 megabit, and then from 5 to 7, and then to 10. And then we've got 7% of our people that they can get 20 meg. So, what you are doing with this is you are going to continue to move up that product chain just like any other consumer product, as the customer has new applications, and wants to go faster. So, at some point the analyst community is going to shift from looking at how many high-speed Internet lines did you add to what really matters, which is what's your ARPU, what's your revenue, are you selling higher speeds now, and migrating customers. What are you doing to continue to add future functionality like we use to within circuit switch, where we use to say okay you got a line, now let's add call waiting, let's add call forwarding, let's add call screening, let's add privacy manager. And so, that what's going to happen, whether you are a cable company whether it that means or a telephone company whoever they are, that's the way it's going to go. And John, you want to add on this, go ahead.

Okay. Just one thing, I think that’s interesting if you take a look at the growth in our subscribers, year-over-year we added 600,000 subscribers, I think it's 605,000. And if you go back and you take a look at the growth between ’04 and ’05, we added 600,000 subscribers. So, the growth continues to be there on a much larger base. So, the percentage growth is down a bit that the growth is still there, and it’s significant.

The other thing you got to look at Qwest, which used to three or four years ago, we liked everybody. Remember when we are at 8% penetration everybody else was 13 or 14. We now actually had the best growth in broadband versus our peer group. And I think, a lot of that goes to Dan Yost's idea of doing Price for Life, which is we never get really surprised once you sign up for, and I have to go at higher speed to get the different price, but we lock it in. So, I think the marketing and product effort has helped us a lot. But we were actually best-in-class as far as the growth rate goes.

Thanks and congratulations.

Yeah. Thank you. We’ll take two more questions please.

Okay. Your next question comes from Tim Horan with CIBC

Thanks guys, and two quick questions. Dick could you talk about your preference for dividend payout ratio, I know it's not your decision. But what type of payout, do you think you can kind of sustain? And then secondly, it seems to me the elephant in the room right now is the fact your stock is down 20% since you announced that you are leaving. And when you look at the volume metrics here, they do look markedly worse on sequential or your metric what you are basically reporting. And the concern, I think, why investors are last time, we saw such an excellence of management of other companies they were fundamental changes occurring at the companies that generally were not good. I know, you don’t believe that, but how you can get into investors any further confidence of that because it's not really showing up the numbers this quarter? Thanks.

On whether there is a stock buyback or dividend, I think it firstly you take into account what’s the stock prices is undervalue then do you create more, more of shareholder value for the shareholders using one vehicle or another buying your stock back or doing a dividends. So I think that is we did, as John and I did the rounds of our owners, we ask the question and that was the response we've got consistently. And I think it just you have a certain amount of cash and that you are going to utilize and the yield of course is dependant upon stock price and that kind of stuff. So I would not straightly, yeah but I do think and my advice has been that it needs to be a meaningful, meaningful decision in the eyes of the owners. It can’t be tokenism and so I think our Board well understands that effort. As for as the numbers, I look at the numbers and I think it was a solid quarter. I think, it wasn’t too long ago, the BMG group was a negative and here we are at positive. We were best in class on high-speed internet connection was it down sure, is the second quarter low softer, yes. We have reiterated our intention to meet our goals on EBITDA and EBITDA margin, in December, the December quarter our EBITDA margin was low softer than in the third quarter of last year. And then we came back in the first quarter and it was very solid and we told everybody that’s what’s going to happen and it happened that way. So I also look at the free cash flow, which I think is a critical component of how this company performs. And I think the company showed…

That's really helpful. Thanks a lot, Dick.

Yeah. One more question, please.

Your last question comes from John Hodulik with UBS.

Hey, John.

Hey, how are doing?

Good. How are you?

Good. Yeah, just really quickly just a follow up on Tim's question, I agree the free cash from multiple or yield, how are you look at it, it looks attractive. But I think clearly the market does not see the current cash flow generation a sustainable. I realize that this is not going to really fault you given your separation of the company. But just in your view, what do you think that this cash flow target is for not just for this year. But if you look at a year or even a couple of years directionally, how do you think that’s going to trend, and if you talk a little bit about your confidence around that number?

We've I think, I've used the word, I'm putting into my text every time. There are few words I'd like to use, one is disciplined, and the other is sustainable, and I think, it is sustainable. I do think that as we've talked about even two years ago, I don’t know whether you said or some other said this was great they are getting their efficiency and productivity there, but at some point they are going to have to hit the top-line. I think, we can continue as Jack Walsh use to say world class companies have to have 7% productivity improvement every year to offset other issues. I think this company can continue to do in that mid single-digit productivity improvement year in and year out, whether it's in dispatches per day, facility costs, I still think there is lots of opportunity. However to sustain that margin and to continue to grow at in that mid 30 range, which could be 37 or 36 then had to be 33, but to keep in that range, we got to have top-line growth. Then we’ve said all along that for a number of quarters that we think mass market can do 2 to 3%, wholesale can be flat to slightly up once the migration is done. And that the key to this, and our Board talks about all the time the key to this is, our business marketing group and that distribution channel being able to build the role that's Sprint use to have. Remember Sprint used to have about 12% national market share, which is kind of gone away as they focus more on wireless. You've got four of the large companies, there are now two. Sprint backed out. There is the window of opportunity plus the MPLS migration. If we can execute in that area of sales of revenue and that’s where we've made our investments, as John Richardson said. I think it's very sustainable to be in that mid 30 range. I don’t think up to 400 more, is hitting the world, and I am not the one to be giving goals for next year. But, I don’t see any reason in the world if that’s the end of the growth opportunity for this company.

And the CapEx, I mean that’s the sort of the other thing that you've a lot of, I mean.

Yeah. I agree with that.

Your view is that it's sustainable and that behalf of a new guy coming in and increasing CapEx, I mean, obviously, he can't really speak for the new CEO, and I mean, how do you view their current level of spending?

Well I'm sure that person and I will spend at least five to six hours going through some of the things. The one of the things that will come up is the discussion of files or IPTV. And quite candidly the team that I work with here looks at those investments and kind of says if DIRECTV and they have got a new box. I think there are about thousand among the trial, and that integrates high-speed Internet say a 20 meg or even a 10 meg line into a broadcast model from the satellite. It doesn’t matter whether it's on files or the broadcast model or satellite. So, why in the world, would you go do that and incur all that expense, when you got YouTube and one of the worlds is going, and you can still do the broadcast model with more HD than anybody else has got with DIRECTV. And so that’s about the only thing that wouldn’t be as I look at the CapEx, the only thing, I can see that, and I can’t find any logic for us doing it. Everything else you will get whether it’s the ultra long haul or expansion of our hosting capability would be tied to BMG success. So, if there is some more hosting we got more hosting capacity. If they sell more ultra long haul or if the speeds go up whatever the next increment is over 40 gig, we would have to invest, but that success based when we prove that, when we went to 768, we said the Tom Richards and his team will do, but better start selling, we turn it on in June, we got our first customers in June. So as long the success space CapEx is okay, they build it and they will come the only when you could possibly do is that middleware in IPTV and we're at 8% penetration with DIRECTV. We are doing really well with it and we get a guaranteed margin with no CapEx. The John and his team has made the return on invested capital was perfect because there is no capital, only a return. So I think the person, who will replace me, the Board would select someone with good discipline and good logic, I’m sure. And so I think that person would probably follow-up a similar path.

Okay. Great. And then good luck to you in the future, Dick.

Yeah, thank you. Let me thank everybody for being on the call today. I would like to reiterate something as we look at the second half of this year on John and my own behalf and that is that we do feel that the margin expansion is there. We do feel that the growth in BMG is there, as we convert sales into the revenue stream. So we have made to sell the revenue stream therefore the EBITDA to us looks very doable, up to 400 looks very doable. And to call one of us, we feel even more confident about the direction we are going and the ability to meet the goals. And we all get paid on those goals. Our Board in those goals are tied exactly together. So we are all committed to do this. I would like thank everybody for the support to Qwest and have a great day, folks.

Thank you. This concludes today's conference call. You may now disconnect.