AT&T wins huge US telecom overhaul deal

AT&T has won the first contract in a radical overhaul of the US government's telecommunications infrastructure in a deal that could ultimately be worth $1 billion to the phone giant, an Associated Press report said.

The Associated Press report said the company has been appointed by the US Treasury, one of the largest government departments, to build a new IP-enabled telecommunications network.

The contract is worth an initial $270 million to build the IP platform, but if the Treasury requests additional services, such remote access for its staff and IP-enabled telephone service, that price tag could rise, the Associated Press report said.

AT&T provides some service to the Internal Revenue Service, but now it will be responsible for linking up all 12 agencies that sit under the auspices of the Treasury Department, the report added.

The contract is part of the Networx Universal contract, which could be worth up to $20 billion to the three participants in the bidding. In addition to AT&T, Qwest Communications and Verizon Communications were awarded the right to bid for contracts, the report added.

Sprint Nextel missed out, a blow for the company, which had been a major provider of telecommunications services to the federal government. It later was included on a short list for a smaller infrastructure upgrade program, the report said.

The companies previously said they expected contracts to start being awarded by federal government departments in the fourth quarter, but the Department for Homeland Security is the only major department to announce it is receiving bids, the report further said.

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