February 2005

Telecom-Gear Mergers May Start to Heat Up

HAVING SURVIVED a three-year bust, the suppliers of the gear used in the world’s communications networks are facing a new challenge: the sudden and rapid consolidation of their customers.

A wave of acquisition activity among U.S. wireless and traditional fixed-line carriers — most recently SBC Communications Inc.’s agreement last week to purchase AT&T Corp. for $16 billion — is forcing the telecommunications-equipment companies to ponder their futures, including whether to do deals of their own.

Such transactions have thrust several equipment companies into the spotlight as possible targets, including Lucent Technologies Inc., Nortel Networks Corp. and Marconi Corp.

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