WASHINGTON – Qwest Communications International Inc. (Q), AT&T Inc. (T) and Verizon Inc. (VZ) on Thursday were awarded the government's largest telecommunications contract ever, a 10-year deal worth up to $48 billion.
The contract winners, who beat out Sprint Nextel Corp., now have to compete with each other for the telecom needs of various federal agencies.
The contract covers voice, video and data services and technologies domestically and internationally for at least six federal agencies.
Industry analysts said they expect the federal government to spend at least $20 billion over the life of the so-called Networx contract, which is capped at $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.
The two previous 10-year government-wide telecom contracts had two main providers. The first went to Sprint and AT&T. The second to Sprint and MCI Worldcom, since acquired by Verizon.
For the losers of the initial Networx Universal contract, there is a consolation prize on the table. GSA is planning in May to award a second telecommunications contract called Networx Enterprise, which contains fewer mandatory requirements and services in select areas across the nation.
In morning trade, shares of Qwest rose 18 cents to $9.03, shares of AT&T advanced 22 cents to $39.17, shares of Verizon gained 24 cents to $37.47 and those of Sprint were up 26 cents to $18.77. All stocks trade on the New York Stock Exchange.