16 Comments

Summary:

The merger of BellSouth and AT&T would create a near facsimile of the old Ma Bell, and it will have tremendous powers. And that may not be such good news for some start-ups, and equipment suppliers. “It is ironic that market forces are putting back together […]

The merger of BellSouth and AT&T would create a near facsimile of the old Ma Bell, and it will have tremendous powers. And that may not be such good news for some start-ups, and equipment suppliers.

“It is ironic that market forces are putting back together what the Justice Department broke up with the Judge Greene consent decree (in 1984),” says Sanjay Subhedar, a telecom veteran and now a general partner with Palo Alto-based (and telecom focused) venture capital firm, Storm Ventures.

“This enhanced ability to drive a hard bargain would affect pretty much any company that AT&T-BellSouth does business with, particularly hardware and technology suppliers,” says Cynthia Brumfield of Emerging Media Dynamics. While the consolidation of customers means more buying power, it also means more spending and bigger budgets for new technology architectures. Industry experts believe that the suppliers of new-fangled metro-ethernet gear will come out ahead as a result of this merger.

To read my full story, visit CNN Money. Read all about the possible impact on how the industry will shakeout in months to come, and how Verizon is going to react.

Also, AT&T To Buy BellSouth

You’re subscribed! If you like, you can update your settings

  1. It has taken almost 10 years for the 10 baby bells (Bellsouth, Pacific Telesis, SBC, Ameritech, SNET, Nynex, Bell Atlantic, GTE, USWest, and Qwest) to drop down to 3. How long before only 2 remain? Qwest with 14.7M subs will have a hard time competing with AT&T (71.3M subs) and Verizon (49.7M subs) and of course the cable providers. It will be interesting to see how Feds react to this one.

  2. Well said Subhedar. I might add that this natural monopoly will not have strictures that were present pre-Green. Breaking up Bell turns out to be a constly experiment.

  3. One thing worth a mention as far as suppliers to these consolidated behemoths are concerned. It has an impact, yes, but we are in so much more of a global economy now that it won’t cause heartache. Nortel and Lucent do a lot of business overseas.

  4. What we need is a third option for consumers. Cable and phone companies just don’t hack it. I feel close to being in bondage with these guys. They may try to break my neck if they get a chance.

  5. LOL. I’m from Dallas and shame on you!

  6. Om, Please take care of Robert’s useless ramblings. There is no place for pinheads like him on these forums. Robert, why don’t you take your **** somewhere else where people like you are invited.

  7. Asia is where it’s at. Sorry if get layed off due to the consolidation. Already heard 10000 jobs will be gone. That’s not Asia’s fault. Good ole American Pie there buddy.

    Born and raised USA. Love India and Asia. Great growth ahead.

  8. May be it is time for AT&T to buy Lucent or may be some other equipment maker bringing it a full circle :-). It also looks like the companies that AT&T is going to compete with (Y!, GOOG, MSN, Skype, AOL) in the new telephony world all rely on their internal R&D teams for products and this has seemed to have been working well for all its competitors.

  9. AT&T buying Lucent is hilarious. I love it!

    Hopefully the third option is fixed wireless offered by someone other than the cable companies and bells. I don’t really know the feasibility of it or the cost (especially for Wimax) but it would be the answer.

    If this goes through I think we will definitely see the Bells try to levy the tiered internet service, which is ridiculous. If consumers aren’t paying for their bandwidth then the bells should be upping the subscription price not adding tiers. Anyway the tiered service should not happen since a cable company could always undercut pricing with a single service offering and consumers would leave in droves. That’s what’s different about now than when Ma Bell was broken up. Having wireless offerings and Cable telephony bring multiple options in each local market.

  10. Daniel Golding Monday, March 6, 2006

    The lack of Lucent is one thing that makes the new AT&T much stronger than the old. I wouldn’t read too much into the Bellsouth acquisition other than the desire to unify Cingular. Landline revenue is not worth chasing and AT&T/SBC was not substantially in competition with Bellsouth for landlines.

    Verizon is now forced to accelerate their dance with Vodafone and get all of VZW. Qwest is also looking even less like a going prospect.

Comments have been disabled for this post