Will the Recent Swathe of Telco Mergers Make Things Better?

We have seen a flurry of telecomm deals in the past few weeks. SBC gets AT&T for the enterprise book, and MCI finds a suitor in Verizon (hopefully ending their saga once and for all). But does it matter?

The markets feelings on the situation swing between exuberant to non-existent, depending on whether the deal was a foregone conclusion (see Forbes.com: Stocks Narrowly Mixed on Verizon-MCI Deal), or what after-effects the signed contract will bring (SBC to Cut 13,000 Jobs After Buying AT&T).

Again, what benefits are we going to see? I suspect there will be some alternating pleasures and pains.

On the front end of the SBC/AT&T transaction, a whole lot of folks are going to lose their jobs. That is fine by me, as it is difficult if not impossible to get service out of human anyway. While I have had no interaction with SBC (other than indirect, through infrequent visits to a Cingular store), my last experience with AT&T was an efficient one, without ever having to speak to a person. The entire process of getting business phone service, including toll-free calling and a decent rate plan, was done entirely over the internet. I chose my services through a browser, received confirmation of my order via email, the service lit up a couple of days later, and I managed the account online as well. I see it as the less in salaries the combined entity has to pay, the cheaper my rates will be. Traditional landline service is reaching the dinosaur stage, switches diagnose and fix their own problems, and broadband VOIP and cellular are fast approaching maturity. I see less reasons for carbon-based organisms in this arena, with each passing day.

This had to happen. It was expect, which is why SBC and AT&T were each laying off similar numbers of workers on their own, before the deal took place.

We will likely see some transition issues in the customer service realm, as SBC learns to get former AT&T customers to the correct representative, and gets online avenues integrated into their own system, but I bet these hiccups will be few and far between, and likely won’t effect the biggest customers at all.

On the Verizon/MCI note, well I am not quite sure what this deal is about, if other than to boost Verizon’s internet capabilities through the old UUNet. Unfortunately, I think Sprint would have been a better target, as a seemingly better central hub for the next-generation internet backbone, IPv6, but I could certainly be wrong there (as I am not a network infrastructure demon).

Nonetheless, there will likely be more layoffs (as if MCI has not been decimated already), and service will swing between pathetic and sufficient as time passes.

Yes, a lot of people will lose their paycheck, and a number of them may be very smart, motivated folks. I wouldn’t be surprised if many wind up in broadband, VOIP, and/or entertainment delivery startups. Then we can play the mergers and acquisitions game all over again. Some more bright people in these channels would certainly make life a little better.

Stay tuned.

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