Of course the "hot" (and that would be a tremendous understatement) topic of the day is the news that SBC is acquiring AT&T. An acquisition of AT&T by a baby-bell has been a forgone conclusion for at least the last two years, but I think that the news that it is SBC and not Verizon or BellSouth doing the buying comes as a bit of surprise to industry watchers.
Om Malik and several others have been doing a terrific job following the story and its likely impact on the telecom industry, but what would a blog about telecom be without further comments on this news.
For the last few years AT&T has been transitioning itself to a company focused on enterprise customers (AT&T CallVantage not withstanding). AT&T is still arguably the dominant provider for global WAN services among enterprises, having gained tremendously from MCI's & Global Crossing's problems and the aborted Sprint acquisition by Worldcom a few years back. SBC's move is a good thing for AT&T's current customers, it helps to stabilize the organization and it gives the former AT&T a firm financial footing to move forward with its aggressive plans to modernize its infrastructure around an IP/MPLS core, as well as deliver new value added services in the areas of voice and security. It looks like SBC intends to keep the AT&T name, which is wise. There aren't very many companies in the world with the name recognition of AT&T, especially in the enterprise arena.
From a VoIP perspective, my best guess is that this acquisition sets the stage for AT&T to begin to offer a global hosted IP centrex services, something that is currently lacking among service providers. SBC has been a leader in the IP Centrex space and their influence should help AT&T move forward to leverage its customer base to deliver value added services based on VoIP.
Looking forward, I think we'll see this move spur significant changes in the global telecom arena as the race for regional telcos to acquire global WAN services providers begins. There are already rumblings that France Telecom will acquire Equant. It is almost certain that someone will buy MCI fairly soon, with BellSouth, Verizon and Sprint being the leading candidates. Even smaller players with a global footprint such as Global Crossing, Virtela, and Savvis might become increasingly attractive acquisition targets for larger regional telcos concerned about being a player in the enterprise WAN space
For enterprises, the long awaited merger & acquisition activity should be a positive development. Enterprises have been wary of of making long-term commitments to service providers due to the perceived instability in the marketplace.
Comments