$48 billion Federal Phone Deal Goes to Qwest, AT&T, Verizon

The US federal government's largest telecommunications contract ever, a 10-year deal worth up to $48 billion, was awarded to AT&T, Qwest Communications and Verizon on Thursday, according to the General Services Administration. The contract winners beat out Sprint Nextel Corp.  

The contract covers voice, video and data services and technologies for as many as 135 agencies operating in 190 countries.  Sprint has been providing telecom services to the federal government for nearly 20 years. It's estimated that Sprint could lose roughly $200 million to $250 million annually in existing government business.

Industry analysts expect the federal government to spend at least $20 billion over the life of the so-called Networx Universal contract, which is capped at $48 billion. The Networx program will serve as a platform to transform the government's telecommunications infrastructure to a more seamless and secure environment. 

GSA is planning in May to award a second telecommunications contract called Networx Enterprise -- worth up to $20 billion -- that contains fewer mandatory requirements and services in select areas across the nation. Sprint said it expected to win the second contract.

How the stocks reacted in midday trade:

  • Qwest rose 7 cents to $8.92 
  • AT&T advanced 11 cents to $39.05 
  • Verizon gained 19 cents to $37.42 
  • Sprint were up 26 cents to $18.77 

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