Business Week reports that big U.S. carriers are eagerly vying for a contract to provide phone services to federal agencies. The Networx contract could be worth as much as $50 billion over a period of 10 years, although some analysts see the contract size coming in closer to $20 billion.
Called the “deal of the decade”, the goal of Networx will be to provide domestic and international voice, data, video and wireless services to federal agencies through 2017.
An announcement of the winners is expected this month. Verizon, AT&T, Qwest, and Sprint Nextel are the main contenders. Standard & Poor’s believes that Verizon and AT&T are the strongest, according to Business Week:
- Verizon, which carries an S&P investment ranking of 3 STARS, is now the owner of MCI, a company that took part in the prior Networx government contract. More than 1,000 people worked to prepare the final bids, which required 10,000 pages to print.
- AT&T, also ranked 3 STARS, is also considered a strong competitor in the enterprise and government telecom space. Over the past 3 1/2 years, AT&T has spent several million dollars putting together two 5,000-page proposals detailing how it can upgrade phone lines, wireless networks and fire walls for the federal government.
- Sprint Nextel, also ranked 3 STARS, isn’t as strong of a player, compared to Verizon and AT&T. Sprint, in the opinion of S&P. Following its mergers, S&P believes Sprint has viewed wireline operations as more of an afterthought. Instead, the company has been more focused on its wireless segment and may use its enterprise technology as support for its more important wireless segment, says S&P’s Rosenbluth.
- Qwest, ranked 2 STARS, is the third-largest wireline operator in the U.S., after Verizon and AT&T. It has been more focused on building out its services for small and midsize business, and regional businesses. If Qwest does win acceptance into the Networx contract, Rosenbluth believes it will likely win a smaller piece of the pie compared to Verizon and AT&T’s share.
The history of GSA’s telecom contracts takes on a near-epic sweep. The initial FTS 2000 award went to AT&T and Sprint in 1988. That contract’s replacement (FTS 2001), was awarded to Sprint and MCI in 1998 and 1999, and now the impending award of Networx will be awarded this month (in two parts).
Of course The Treasury and Justice are planning their own massive global network.
The $10 billion Integrated Wireless Network (IWN), a joint effort between the departments of Justice, Homeland Security and Treasury, is envisioned to support about 80,000 federal officers in all 50 states. The IWN design is based on VHF, Project 25 radios with a packet switched Internet Protocol (IP) backbone connecting the 700 MHz radio towers in virtually every community in the United States.
If the agencies cannot agree to work together, then the Office of Management and Budget will decide the matter.
Only the paranoid would think Justice and Verizon are in bed together, trading access to files in exchange for preferential IWN status. Okay, sure, Verizon’s plan for dominating the 700MHz wireless broadband auctions this fall might include their own brand of proprietary EVDO/Flarion service.
That doesn’t mean nothin’ — broadband wireless at 700MHz isn’t a significant business and the Google Phone is just vaporware.
Case closed.
Related DailyWireless articles include; Networx!, FCC to Rural Users: 700MHz is the Ticket, 700MHz in 10 Steps, National Broadband: Fee & Free, Microsoft’s “Free” Phone?, Yahoo/Google Into 700MHz?, McCain Wants Commercial 700 MHz for Police, Verizon Makes its Move for Universal Service Fund, Senate Committee Pushes Interop and Oregon’s $500 Million Statewide Wireless Network.
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