September 17, 2008 / 7:46 PM / 9 years ago

UPDATE 1-Qwest expects more phone customers to cut the cord

(Adds Qwest CEO comments, adds Nielsen forecasts)

NEW YORK, Sept 17 (Reuters) - U.S. phone company Qwest Communications International Inc's (Q.N) CEO expects more consumers to disconnect their landlines in favor of mobile phones over the next several years, but he said the company could survive.

Chief Executive Edward Mueller said cost cuts were buffering the impact of falling landline sales and Qwest's partnership with Verizon Wireless -- a venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L) -- would help it grow.

Earlier in the day, media research company Nielsen Co forecast 20 percent of U.S. households would rely only on mobile phones by the end of this year.

Analysts have forecast that could rise to as high as 30 percent by around 2012, an outlook Mueller endorsed.

"I would say that's probably accurate. It could be sooner than that," he told a Goldman Sachs media and communications industry conference, while adding that much depended on the economy.

Colorado-based Qwest, with a vastly rural territory and without a wireless unit, is seen as one of the weakest of the former Bell operating companies.

Mueller said the weaker economy was hurting business, particularly in areas like Arizona and Minnesota.

Nielsen said consumers who have chosen to cancel their landlines tend to have lower incomes. Even when they have to pay a higher mobile phone bill, they usually save money, it said.

"As wireless network quality improves and unlimited calling becomes increasingly pervasive, we expect the trend toward wireless substitution to continue," said Alison LeBreton of Nielsen Mobile, a Nielsen division.

"In a tightening economy every dollar counts, and consumers are more and more comfortable with the idea of ditching their landline connection." (Reporting by Ritsuko Ando, editing by Gerald E. McCormick)

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