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MCI-Worldcom scores $4bn Dept of Defence contract

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With Congress and the FCC breathing down the necks of telecoms, questioning the wisdom of a spate of immensely profitable mergers and consolidations, MCI may just have found a way of becoming too indispensable to Uncle Sam to be broken up in future. The company, which climbed to number two following its recent $129 billion agreement to purchase Sprint, has scored a contract worth up to $4 billion to supply the Department of Defence with military communications services covering operations in the Pacific Rim. The deal will extend for five years, with renewal options, and cover an unspecified range of communications services for American naval, ground and air forces. Nearly 100,000 American service people are stationed throughout the Asia-Pacific region, chiefly in Japan and South Korea, and jointly commanded from Hawaii. The DoD awarded the contract to subsidiary MCI Telecommunications Corp. of McLean, Virginia. The Department said it solicited the contract on the Internet. Following review by approximately 175 companies, only two bids were received. DoD declined to name the other bidder, but rumour has it that Sprint FON Group was MCI's "competitor". Rather a cozy situation. To cap it all, MCI today announced that its Q3 profits rose more than 200 percent, considerably outstripping forecasts. The company cited rapid growth in its Internet and data services, and in its international operations. Talk about being on a roll. ®

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