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CenturyLink Now an Official Bidder for US Defense Contracts

CenturyLink, Inc.CTL is now an authorized network service provider under U.S. Defense Information Systems Agency’s (DISA) Global Network Services (GNS) contract. This means that the company will now be able to participate in the competitive bidding process for DISA’s multiple service contracts, going ahead. Other participants for the GNS contract are AT&T Inc. T, Verizon Communication Inc. VZ, Level 3 Communications Inc. LVLT, Artel, BT plc and GTT. In January this year, CenturyLink was awarded Ethernet contracts worth $10 million by DISA.

About the GNS Contract

GNS is DISA’s new multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contract worth $4.3 billion, having a five-year base period and further 5 one-year options. The GNS contract will assist DISA’s transition from the utilization of point to point circuits to newer technologies based on a 100G backbone. The U.S government aims to provide the U.S. Department of Defense with a single network for global voice, video, imagery and data transmission.

By gaining authorization to bid for task orders issued by DISA, CenturyLink will be in a position to compete with other participants for a variety of global network transport services that include content delivery networks, VPNs, fiber-based broadband, Wi-Fi, satellite, wavelength, network security, colocation, cloud connectivity and SDN services.

The Bottom Line

Of late, CenturyLink has been clinching service contracts from different state governments. In March this year, the company, along with Verizon, secured orders worth $150 million to provide network services and infrastructure support to state and local government agencies in Virginia. Moreover, CenturyLink revealed its plan to trial over the top (OTT) video services. CenturyLink has been increasing its Prism TV footprint recently and the strategy to explore in the OTT segment bodes well with its growth objectives. We believe such multiple contract wins will boost the company’s top line and cash flow prospects, going ahead.

CenturyLink currently sports a Zacks Rank #1 (Strong Buy)

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