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AT&T/BellSouth merger: Where do we go from here?

Mar 16, 20062 mins

* AT&T/BellSouth deal raises questions about the future of the telecoms market

In the last newsletter, we discussed a bit of the history behind how AT&T and BellSouth became two companies in the first place. This time we’ll take a more forward-looking approach and offer at least a starter list of some of the key questions that must be answered in order to have an inkling of where we might be headed.

The future of the telecom services industry depends on two key forces: marketplace pressures and the presence (or absence) of government regulations. Clearly, the marketplace pressures are coming from all sides and the competition now has evolved from 1984-era competition of head-to-head price competition for essentially equivalent services, to competition between varying services models. And while the question of government regulation is subject to the winds of political changes, the direction at this point is definitely still in a laissez-faire (hands-off) mode.

There are many additional questions about that future. One of these questions we raised in this newsletter, being “Are these megamergers good or bad for enterprise customers?” Additional questions include:

* What, if anything will happen to Qwest?

* Are either AT&T or Verizon likely to acquire an equipment vendor such as Lucent or possibly Avaya? (Either or both of these acquisitions by AT&T would be fascinating from a historical perspective.)

* Will the government begin to regulate VoIP providers more strictly?

* Will the two behemoths (AT&T and Verizon) vigorously compete or function as an oligopoly; a.k.a., I have mine and you have yours, so let’s not fight?

* What does all of this mean to service providers such as Masergy and Virtela?

* Will the cable companies finally provide a real threat to the traditional service providers for enterprise customers?

* Will another potentially disruptive technology such as WiMAX enable the next MCI to emerge?

As we mentioned in our last newsletter, we want to hear your thoughts on these questions. To that end, we have created a forum to discuss these and other issues at Webtorials. Please visit this forum both to find out what our fellow analysts are saying and to add your comments from the end-user perspective. Of course, we’ll share some of these comments in future columns.

* Editor’s note: For ongoing coverage plus additional analysis and commentary of the AT&T/BellSouth deal, check out

Jim has a broad background in the IT industry. This includes serving as a software engineer, an engineering manager for high-speed data services for a major network service provider, a product manager for network hardware, a network manager at two Fortune 500 companies, and the principal of a consulting organization. In addition, Jim has created software tools for designing customer networks for a major network service provider and directed and performed market research at a major industry analyst firm. Jim’s current interests include both cloud networking and application and service delivery. Jim has a Ph.D. in Mathematics from Boston University.

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