Qwest piles up state government wins

Minnesota awards carrier $20 million contract for voice, data, video network.

Qwest Communications appears to be on a roll in the state government market, racking up several key contract wins and renewals this year.

Recent contract wins for Qwest involve traditional telecommunications services as well as network equipment installation and maintenance. These deals are located both inside and outside the carrier’s 14-state local territory.

The victories for Qwest come at a time when state governments are consolidating networks and pushing carriers to reduce rates. Qwest won’t release data about the size of its state government business, but company officials confirmed that sales are up this year.

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Qwest Communications appears to be on a roll in the state government market, racking up several key contract wins and renewals this year.

Recent contract wins for Qwest involve traditional telecommunications services as well as network equipment installation and maintenance. These deals are located both inside and outside the carrier’s 14-state local territory.

The victories for Qwest come at a time when state governments are consolidating networks and pushing carriers to reduce rates. Qwest won’t release data about the size of its state government business, but company officials confirmed that sales are up this year.

"If it’s true that Qwest has an increase in revenues with prices headed down like they are, that’s pretty good," says Ray Bjorklund, senior vice president of Federal Sources Inc., a Vienna, Va., market research firm.

"I’m on a positive growth trend even with a significant condensing of the market," says Sharon Sevy, vice president of Qwest government and education services, which supports state, local, county and city government agencies as well as kindergarten through twelfth grade schools. "I’m seeing growth from selling more products in-region and from selling services out of region."

Sevy says Qwest is cutting its rates to keep state government business in its 14-state region where it is often the incumbent carrier.

"I’m reducing rates significantly in a lot of fronts to retain business," Sevy says. "There’s a lot of consolidation in our region, so growth is difficult."

In addition to local and long distance services, Qwest is pursuing bids that involve telecommunications repair, network equipment integration and 911 services for state agencies.

"The trend that I’m seeing with Qwest is that they are going after deals for equipment and related services, as opposed to just telecom services," Bjorklund says. "A lot of telecommunications companies are hungry, so it’s prudent for them to look at other places for business."

Recent wins for Qwest include:

- A two-year, $20 million deal announced in August to provide installation and maintenance of Cisco hardware for Minnesota’s primary wide-area network that carries voice, data and video.

- A deal announced in April to provide Internet service to Ohio’s public K-12 schools. The dollar value of the Ohio deal was not released, but it was a significant win for Qwest because it is outside its 14-state local territory.

- A six-year, $24.7 million agreement announced in February to provide network services connecting more than 400 Wyoming public schools. Qwest was the incumbent on this competitive bid, which involves building a converged IP network to carry voice, data and video.

Minnesota officials said they selected Qwest for the Minnesota Network for Enterprise Telecommunications (MNET) equipment contract based on its technical abilities and competitive pricing. Ten companies bid on the MNET deal, including one other carrier, which was Verizon. Qwest shares the MNET contract with Berbee Information Networks, a Wisconsin reseller of Cisco, IBM and Microsoft products.