MCI wins NASDAQ network contract
MCI Communications Corp. yesterday announced it has won a $150 million contract to provide the trading network for the Nasdaq stock market.</br></br>Under the contract, worth an estimated $150 million over six years, the Washington telecommunications company will install, operate and manage the network that carries all of Nasdaq stock transactions.</br></br>Nasdaq is run by the District-based National Association of Securities Dealers. The trading system allows brokers to buy and sell shares in thousands of companies on a national network of computers instead of going through traditional stock exchanges. The new MCI system will be designed to increase the speed of transactions and the volume of shares the fast-growing system can handle.</br></br>"This is a significant, very future-oriented contract," Barry Wagar, senior vice president for marketing at MCI. The current Nasdaq system was provided by MCI arch-rival AT&T. "It feels real good to us," Wagar said. However, "It's not that much in terms of the bottom Line," said Michael J. Balhoff, an analyst at Legg Mason Wood Walker Inc. In Baltimore. He said that $150 million over six years does not add up to much for a company with annual revenue of $10.6 billion. "That's why the stock closed up 25 cents." he added. MCI shares closed at $28.87-1/2 yesterday.</br></br>The contract is a strong "vote of confidence" in MCI, Balhoff said. "Here is a major exchange that requires absolute reliability."