WASHINGTON -(Dow Jones)- The U.S. Postal Service has selected Verizon Business, a unit of Verizon Communications Inc. (NYSE:VZ) (VZ), to provide network services worth about $16.4 million over 10 years, the company announced Monday.
Verizon Business will provide long-distance and calling-card services for nearly 166,000 lines at 34,000 locations. That portion of the contract is worth $10 million.
The Postal Service will spend another $6.4 million to upgrade about 100 data circuits to an Internet protocol network.
The Postal Service contract is another victory for Verizon (NYSE:VZ) in the government's $48 billion Networx Universal program. The company had already snagged the lucrative contract as the primary supplier of network equipment and services for the U.S. Department of Homeland Security, which was worth $678.5 million over the next 10 years.
Susan Zeleniak, group president of Verizon Federal, said the U.S. General Services Administration is expected to issue at least 40 more requests for network and wireless services this year. Verizon Business will likely issue bids for most of those projects, she said.
Verizon Business includes Verizon Wireless, jointly owned by Verizon (NYSE:VZ) and Vodafone Group PLC (NYSE:VOD) (VOD), in all of the company's Networx contracts.
Verizon (NYSE:VZ) , AT&T Inc. (NYSE:T) (T) and Qwest Communications International Inc. (NYSE:Q) (Q) are the three providers chosen for the Networx program, making them eligible to provide networking and communications services and equipment to many different government agencies.
The Networx program is the largest federal government contract ever established for telecom services.
While potentially lucrative, executives at various telecom companies warn that the financial benefits from the contracts wouldn't begin showing up until next year. The companies continue to jostle for position for the various contracts.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
-Roger Cheng contributed to this report.
(END) Dow Jones Newswires 06-23-08 1134 Copyright (c) 2008 Dow Jones & Company, Inc.
