* Reader feedback on corporate mergers
Earlier in the year, we wrote about the pending AT&T/BellSouth merger and the proposed Lucent/Alcatel merger. In both cases, we invited you to comment on the merger and to interact with each other using the discussion pages at Webtorials.
We received quite a few comments on the AT&T/Bellsouth merger, and the vast majority was negative. In particular, there was a great deal of concern about the loss of competition.
As a representative response, one person wrote: “Is the proposed merger of AT&T (nee SBC/AT&T) and BellSouth good for enterprise customers? I would answer yes and no. The ongoing rebuilding of the Bell system SHOULD provide benefits of economy of scale. But the Bell system was notorious in the past for keeping those additional profits for themselves and not passing the savings of new technology on to customers. You can cite numerous examples where profits were not passed on to consumers but were used to acquire other companies, many of which failed. The ONLY thing that seems to make the Bell companies respond is fear of competition. That is why they were divested in the first place.”
On the other hand, there were some who saw this as a positive move. For instance, one person wrote: “Vigorous competition over the last 20 years has fragmented and weakened the telecommunications infrastructure in this country. This merger will strengthen and enhance the security of the domestic network and prevent problems like those that the shipping industry is currently experiencing. There will still be plenty of cable and LEC competitors after this merger is complete.”
Another reader expressed this sentiment: “I find it interesting that we’ve almost come full circle back to ‘one’ telephone company. When I started out in the industry, it was 1985 and the heady days of deregulation were just beginning. Was it worth it? Yes, I think it was because it spawned the age of networking which begat the Internet as a commercial entity. I don’t think that we are returning to the monopoly days of pre-1984 because the concept of communication is much much more than just telephone. And in that regard, there are many more players than just SBC/AT&T and Verizon.”
It is interesting that there were far fewer comments from the readers concerning the Lucent/Alcatel merger. In fact, this seems to be a bit of a “yawn” subject. The comments that were received were primarily expressing dismay at the loss of U.S.-based ownership.
We wonder why this is the case? Would the reaction be the same if the equipment manufacturer were Cisco? Or is the ownership of a company that is used primarily as a CPE supplier less of an issue so long as the deployed products continue to be produced and supported?
The forums on these topics are still open for your detailed perusal and further comment. Let us hear from you and you’ll continue to hear from us!
