So what happens now?

With fewer, bigger telecom players left standing, network executives are bracing for changes in the way they procure services. Some fear that lessened competition will weaken their bargaining leverage and drive up prices.

It is also possible that a new regulatory framework could emerge after the megamergers - MCI with either Verizon or Qwest, and SBC with AT&T - that would ensure the new megacarriers don't abuse their positions. Then again, more regulation might mean less innovation.

These are the great unknowns in the age of telecom consolidation, which accelerated with Verizon's $6.7 billion bid last week for MCI. It heated up some more when Qwest, which had its first bid spurned by MCI, late last week said it would present a "modified" offer after examining Verizon's bid.

Qwest did not say if the modified bid would be higher than its $8 billion initial offer.

The reasons for the interest in MCI are the same as those cited in the $16 billion SBC/AT&T marriage earlier this month: an instant influx of high-ticket large enterprise customers; national and global infrastructure; and a wealth of IP assets upon which to generate new services and new service revenue.

"The deal is strategic, simple, straightforward and compelling," says Verizon Chairman and CEO Ivan Seidenberg, who adds it will accelerate Verizon's $250 million Enterprise Advance initiative. MCI Chairman and CEO Michael Capellas says "there is no question, our future is brighter together."

Capellas also says it's what customers want: "simplified delivery, one-stop shopping and one point of contact."

They also want competitive prices, which typically requires more competitors. But the effect this recent consolidation has on pricing "remains to be seen," says George Laskaris, executive director of NJEDge, New Jersey's statewide higher-education network and a Verizon customer. "There can still be considerable competition between those [carriers]," which would keep prices low, he says.

"There is the opportunity for MCI and Verizon to create a win-win scenario, but the jury is still out on how successful the merger will be," says Mike Woods, CIO at NPC International, the largest Pizza Hut franchisee in the world and an MCI Private IP customer. Woods says there could be short-term "adverse effects" in areas such as network and billing integration.

One of the benefits, according to GMAC Financial Services in Detroit, is consolidation of multiple contracts with myriad carriers scattered across the globe. GMAC does business in 41 countries.

"We have contracts with all of them," says Arvind Sabharwal, director of global computing and telecommunications for the $20 billion financing subsidiary of automotive giant GM. "We will be able to consolidate some of our contracts and increase our volumes with fewer players."

Stable players

Sabharwal also believes the shakeout leaves a set of financially stable players that can provide a consistent array of telecom services and end-to-end global reach. He says that during the telecom bubble GMAC Financial Services and other large corporations were concerned about the future shape of the industry - which companies would survive and which wouldn't.

"At least now the consolidation is happening and there will be some level of stability going forward, and we'll know which players survived and who we need to deal with," Sabharwal says.

Though Sabharwal is comfortable with the current level of consolidation, any more might be detrimental to corporations such as GMAC Financial Services. As competition decreases, some analysts estimate pricing of business telecom services - which have been dropping 15% to 20% annually - might start to climb.

"Telecommunications pricing has been great for enterprises. It's something we could rely on or expect as we went through our yearly cost reduction efforts," he says. "But if there's some further consolidation, that could be harmful [on pricing] in the long run. We're being cautious about that."

Consultants share that view.

"Based on the mergers that have happened already, we don't yet have a threat to the competitive situation," says David Rohde of TechCaliber. "We might, depending on what more transactions happen and what kind of regulatory conditions come about."

NJEDge's Laskaris says the FCC might intervene if telecom service costs start heading up.

"It's kind of like we're going back to where we started in this industry," he says, a view echoed by Jermaine Mason, IT manager at Wilson Sporting Goods in Chicago.

"The telecom world is going back to its old ways, but they don't want to go too far back where the government will tell them what to do with pricing and break them up again," Mason says. "They have a vested interest in not raising prices."