IT sees more promise than peril in AT&T-BellSouth deal

13.03.2006

"We're dealing with such a large portfolio of services that we can't easily migrate to another supplier, and they know that [at AT&T]," he said. "But they still come to the table and negotiate with us based on the total dollar spend."

Colleen Boothby, an attorney at Levine, Blaszak, Block & Boothby LLP in Washington, said she's concerned that the enterprise telecommunications market is turning into a noncompetitive duopoly between AT&T and Verizon Communications Inc.

Boothby, who represents large companies in negotiations on networking contracts, said via e-mail that she had hoped BellSouth might buy Sprint Nextel Corp. and become "the third leg on the competitive stool." AT&T's planned takeover of BellSouth "makes a problem market much worse," she said. "Duopolies are just breeding grounds for parallel pricing and sluggish performance."

But David Rohde, a consultant at TechCaliber Consulting LLC in Washington, said the planned merger shouldn't raise big concerns for corporate telecommunications managers. As long as Sprint Nextel remains in the enterprise land-line business, corporate users "still have a good, competitive market" to choose from, Rohde said.

Don Gibson, vice president of e-commerce and infrastructure at FedEx Kinko's Office and Print Services Inc. in Dallas, said that he worked for AT&T Corp. in the 1980s, "and it's like it's coming full circle." But Gibson predicted that for corporate users, dealing with the new AT&T in the future "is going to be like it is today, or potentially better."