US telecoms firm Qwest Communications International has warned that it could be in default without drastic action to reduce debt, and unveiled a package of measures to restore itself to health.

Under its existing $4bn credit facility, Qwest would be in danger of violating its covenants if its debt grew to more than 3.75 times earnings.

Like many of its rivals, Qwest has invested heavily in technology, and has seen revenues fall somewhat short of expectations.

Now, the firm plans to sell off a package of assets, including wireless networks, access lines and directory services.

In addition, it will be slashing its capital expenditure and operating expenses, and issuing new equity-based securities in order to improve its cash position.

In a further effort to free up working capital, the firm will launch a securitisation programme based on the money it is owed, amounting to some $500m-1bn.