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MCI WorldCom grabs $1.5 billion contract

The long distance company wins a new government contract that could be worth as much as $1.5 billion over seven years.

MCI WorldCom has won a new government contract that could be worth as much as $1.5 billion over the next seven years.

The company will be the exclusive provider of long distance service--in addition to offering calling cards, Internet service, and pay phones--to Army and Air Force bases around the world for the next seven years.

The deal is the second largest federal contract the company has won this year. In January, the company won the right to compete with Sprint for federal long distance and networking services, a deal that guarantees the company $750 million over eight years.

In both cases, MCI WorldCom beat out AT&T, the agencies' previous providers. AT&T had held the Army/Air Force contract since 1986, a military spokesman said.

"It was time for a new contract that reflected the landscape out there," said Captain Luke Knittig, a spokesman for the procurement division that signed the contract with MCI WorldCom. "It was time to open it up."

The contract will run for seven years, with the option of a three-year extension. The $1.5 billion figure was an estimate of the probable value of services over that time, rather than any solid guarantee, Knittig said.