April 2 (Bloomberg) -- Qwest Communications International Inc. may have difficulty finding a buyer for its nationwide fiber-optic network because the recession has eliminated sources of funding, analysts said.

Qwest is exploring a possible sale of the network for as much as $3 billion, the Wall Street Journal reported yesterday, citing people familiar with the matter. AT&T Inc. and Verizon Communications Inc. would be among the potential acquirers, the newspaper said.

“This would not be a great time to sell Qwest’s long-haul network because of the credit crisis -- no one can get financing,” said Donna Jaegers, an analyst at DA Davidson & Co. in Denver. In a better economy, Qwest could have sold the network for as much as $4 billion, she said.

The network, which carries data across long distances for business and wholesale clients, has struggled to lure customers away from larger competitors AT&T and Verizon. Qwest is vying for business amid the worst recession in at least a quarter- century, which has caused companies to slash technology budgets.

Nick Sweers, a spokesman for Denver-based Qwest, declined to comment, as did Verizon representative Eric Rabe. AT&T spokeswoman Katherine Eller declined to comment.

AT&T may also shy away from bidding because of antitrust concerns, said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore.

Verizon agreed to acquire wireless carrier Alltel Corp. in June, before the financial crisis deepened. Verizon, which partly financed the acquisition with more than $20 billion in debt, may not want to borrow more, King said.

Eliminate a Competitor

“Both companies have spent the last five years rolling up a big chunk of the telecom industry, and I don’t think regulators would be in the mood to see those firms get even larger,” said Michael Hodel, an analyst at Morningstar Inc. in Chicago. “The biggest benefit to either of those firms would be that it would eliminate a competitor.”

The network is separate from Qwest’s traditional phone line business in 14 western U.S. states. Qwest’s profit has declined for four straight quarters as subscribers abandon land-line service in favor of mobile phones and packages from cable companies.

Qwest dropped 15 cents, or 4 percent, to $3.60 in New York Stock Exchange composite trading at 4 p.m. The shares have dropped 1.1 percent this year, compared with a 6.9 percent drop at Dallas-based AT&T and a 4.3 percent decline for New York- based Verizon.

To contact the reporters on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net; Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: April 2, 2009 16:14 EDT