CenturyTel, seeking scale, to buy Qwest for $10 billion

NEW YORK - CenturyTel Inc., the country's fifth-largest local-phone company, plans to buy the third-largest, Qwest Communications International Inc., in a stock deal worth more than $10 billion so the companies can try to better deal with the dark future of the landline phone business.

The number of landlines in the United States has been shrinking about 10 percent a year as consumers increasingly rely on their wireless phones or service from cable companies.

Buying Qwest could give CenturyTel a chance to cut overlapping functions such as billing, administration, call centers, and back-end services. Other phone companies, mainly rural ones, are merging for the same reasons.

If they combined immediately, CenturyTel and Qwest would have the same number of phone lines Qwest did on its own eight years ago.

The combined company would have about 17 million phone lines serving customers in 37 states. It would be based at CenturyTel's headquarters in Monroe, La., rather than in Denver, where Qwest is based.

One big hurdle for the new company would be that neither Qwest nor CenturyTel own wireless networks that can compensate for the loss of landlines, as AT&T Inc. and Verizon Communications Inc. do. Last year, 22.7 percent of homes used only cell phones, according to a survey by the Centers for Disease Control and Prevention.

But Qwest and CenturyTel still hope the acquisition will better position the combined company to weather the future. Qwest has a large and stable business selling telecommunications services to business and government customers. Together, the companies would be the fifth-largest provider of residential Internet service in the country, and both have been upgrading their networks to provide higher speeds, though they are not able to match the latest round of upgrades at cable companies.