Equipment makers to lose another customer; The new Ma Bell?

RCR Wireless News, March, 2006

Byline: JONI MORSE AT&T Inc.'s planned acquisition of BellSouth Corp. could be great for consumers, but the news isn't so great for telecom equipment vendors, already suffering from declining profits. "In our view, carrier consolidation is a net negative for equipment vendors,'' stated a recent report by analysts Tal Liani and Vivek Arya of Merrill Lynch.

The report cited Verizon Communications Inc.'s recent unification of its procurement activities for wireline, wireless and its MCI long-distance business, and highlighted an expected 40-percent reduction in fiber-to-the-home deployment costs, only part of which is due to equipment costs. Cisco Systems Inc. also has brought up the fact that consolidation makes determining prices and negotiating...

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