Qwest picked for 'largest telecom contract ever'

Joyzelle Davis, Rocky Mountain News

Published March 29, 2007 at midnight

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Qwest Communications is one of three companies picked to bid on orders under the largest government telecom contract ever, worth an estimated $48 billion under its 10-year lifespan.



Qwest, AT&T and Verizon now have to compete with each other to provide the phone, video, data and other services domestically and internationally for various federal agencies. The contract winners beat out Sprint Nextel Corp.



Denver-based Qwest was considered a dark horse candidate among the four competitors, and analysts have said that winning a piece of it could be a "game changer" for the company. The company's shares hit a high of $9.16 on the news before settling back to $8.92. in morning trading.

Government agencies are expected to spend at least $20 billion on the contract over 10 years. The contract, called Networx Universal, will overhaul the government's telecommunications services. Under terms of the GSA contract, agency spending could be increased to as much as $48 billion.

"The advanced technologies and services defined in the Networx program will serve as a platform to transform the government's telecommunications infrastructure to a more seamless and secure environment," GSA's acquisitions commissioner Jim Williams said in a prepared statement.

Qwest Chairman and Chief Executive Richard Notebart described the GSA announcement as "a big win for Qwest" that demonstrates the company's progress over the last five years.

"All Qwest customers across the nation will see benefits," Notebaert said. "Qwest already is offering to its business customers many of the advanced features that are required in Networx and customers will continue to benefit from Qwest's investments in broadband technologies to support next-generation applications that are anticipated by GSA."

Qwest currently provides services to some 50 federal government agencies, including the Department of Energy, Department of Defense, Department of Justice and the Department of Treasury.

The announcement marks the first time the U.S. Government Services Administration has awarded a government wide contract to more than two telecommunications companies.

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