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Lucrative contract at risk for Neustar

Sterling-based Neustar is at risk of losing a lucrative federal contract that accounts for nearly half its business.

Federal regulators have yet to award the contract, but an advisory group to the Federal Communications Commission has reportedly recommended that a $450 million contract be awarded to Telcordia, a subsidiary of Swedish telecom giant Ericsson.

The decision would impact Neustar's exclusive technology that enables consumers to keep their numbers when they buy a new phone or switch carriers.

The current contract is set to expire June 30, 2015.

Ericsson has recently made the decision to go after lucrative government contracts and has trimmed some areas of the company to position itself to do that.

"Since 2005, providers have brought to the Commission’s attention the escalating costs of the Number Portability Administration Center (NPAC) databases.

The costs of the NPAC databases have continued their growth trend and have more than doubled since then," according to a letter filed to the FCC June 9 by the United States Telecom Association.

Revenues for Neustar were listed at $902 million last year, so losing the contract could mean a nearly 50 percent decrease in revenues in 2016.

Neustar has held the contract for 18 years, winning the bid mostly uncontested every year until this year.

The company has tried to diversify its interests recently by buying the .biz and .us domain names, as well as the world-wide registry gateways for China (.cn) and Taiwan (.tw).


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