WorldCom, which is changing its name to MCI, said it was on track to have a small wireless network operating in June. It declined to comment on the location of the network or size of the contract.

A sources familiar with the contract, however, said the network would provide service to about 5,000 to 10,000 people in Baghdad. Media reports pegged the contract's value at about $45 million.

It is unclear whether Ashton, Virginia-based WorldCom would build other communications networks in Iraq since the Bush administration said it would leave such decisions to the incoming Iraqi government.

Bombing destroyed much of Iraq's feeble communications network and military personnel and aid workers have relied on costly and cumbersome satellite telephones.

Even before the war, Iraq's communications resources were scarce. The Washington Post said the country's prewar telephone network served only three out of every 1,000 people.

Some of WorldCom's network equipment started arriving in Iraq this week, but the rest must wait in line to be shipped along with food, medical supplies and other humanitarian aid, the company said.

The company, which also helped build a similar wireless network in Afghanistan, declined further comment. WorldCom does not operate a wireless network in the United States and it exited the wireless re-sale business last year.

The Baghdad network will use so-called GSM technology -- the global system for mobile communications -- which is the wireless standard used in Europe and most of the world, the source familiar with the contract said.

In March, Rep. Darrell Issa, a Republican from southern California, urged the U.S. government to build a wireless network based on the CDMA (code division multiple access) standard developed by San Diego, California company Qualcomm Inc. QCOM.O

Issa argued that if GSM technology is deployed in Iraq, much of the equipment used to build the wireless telephone system would be manufactured in France, Germany, and elsewhere in western and northern Europe. Qualcomm is one of Issa's biggest corporate donors.

WorldCom, which filed the world's biggest bankruptcy last year, is the largest communications provider to the U.S. government and serves more than 75 government agencies.

Some rivals and activist groups, such as the Gray Panthers, have lobbied Congress that the federal government should not do business with WorldCom in the wake of its $11 billion accounting scandal.