Upstart long-distance company Qwest has scored a big win, grabbing a US$1 billion subcontract to upgrade the US Department of Treasury's communications system.
Qwest (QWST) said Wednesday it will support the Treasury Communications System, the network that connects the Treasury and all of its agencies throughout the United States, Canada, and Mexico.
The Denver-based company will provide high-speed data and voice transmission services and may eventually help the department shift to an Internet-based network, a spokeswoman said.
The announcement came on the same day that Qwest reported a small fourth-quarter loss due to acquisition expenses and debt prepayment. But the company, the fourth-largest provider of long-distance service in the country and growing fast, said revenue in the quarter increased more than 300 percent to $865.1 million, compared with $206.4 a year ago.
The Treasury contract, which will be spread over six or seven years, is Qwest's largest commercial contract ever.
"Winning a contract of this size will be a seminal contract in helping us win others. This will give us enormous credibility as we go after other huge contracts," Qwest chief executive Joseph Nacchio said in an interview.
Qwest was awarded the Treasury subcontract by the prime contractor, TRW.
Nacchio said that his company won the contract over the incumbent service provider, Sprint, and other bidders including AT&T and GTE.
"New companies tend to be hungrier" for new contracts, Nacchio said. He also said the lower costs of its new fiber optic network helped it win over other bidders, which operate costlier and older networks.
Qwest is building an 18,500-mile communications network that will link 130 cities. The project is scheduled to be completed by mid-year.
Copyright© 1999 Reuters Limited.
