Qwest wins $1 billion U.S. Treasury Dept. contract

    NEW YORK, Feb 3 (Reuters) - Qwest Communications
International Inc. (NASDAQ:QWST), the No. 4 U.S. long-distance
carrier, said Wednesday it won a $1 billion subcontract to
upgrade the U.S. Department of Treasury's communications
system.
    Qwest will support the Treasury Communications System, the
network that interconnects the Treasury and all of its agencies
throughout the United States, Canada and Mexico.
    Denver-based Qwest will provide high-speed data and voice
transmission services and may eventually help the department
shift to an Internet-based network, a spokeswoman said.
    Qwest said the contract, which will be spread over six or
seven years, is its 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 a telephone interview.
    Qwest was awarded the subcontract by the prime contractor
TRW Inc. (NYSE:TRW)
    Nacchio said Qwest, a relative upstart in the
telecommunications industry, won the contract over the
incumbent service provider, Sprint Corp. (NYSE:FON) and other
bidders including AT&T Corp. (NYSE:T) and GTE Corp. (NYSE: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
linking 130 cities, which is scheduled to be completed by
mid-year.
    Qwest declined to comment on how the new contract would
affect its revenue and earnings growth.
    Qwest is expected to report fourth-quarter earnings on
Wednesday. Wall Street expects the company to post earnings of
2 cents a share, compared with 7 cents in the same period a
year ago, according to First Call, which tracks analysts'
estimates.
     Shares of Qwest closed Tuesday at $60.125, down $2.3125 on
Nasdaq.

 Copyright 1999, Reuters News Service