Telecom Mergers Put Increased Pressure on Equipment Vendors

The past few months have seen quite a few major mergers shaping up between U.S. communications carriers (i.e. Sprint and Nextel, AT&T and BellSouth, etc.), which is beginning to pinch the revenue of telecom equipment makers.

As the big wireless and telephone giants consolidate their operations, they are able to cut costs, integrate their network resources, and negotiate better deals with manufacturers. This, combined with a general slowdown in wireless spending after the recent 3G network buildout is expected to have a negative long term effect on the revenues of telecom equipment vendors in the U.S., and possibly around the world.

Many analysts have speculated that these manufacturers, will themselves feel the need to consolidate operations, through aggressive mergers and acquisitions. The merger agreement between Alcatel and Lucent Technologies is proof that this is already beginning to occur, and could have a domino effect on competing companies around the globe.

(Originally published by TeleClick.ca on April 28, 2006)

About the Author:
Jeremy Maddock is a well-known technology blogger who specializes in telecommunications news, and consumer information.