Commentary: Can The SBC-AT&T Combo Make Money?

To listen to execs at SBC Communications Inc. (SBC) tell it, the company’s $16 billion acquisition of AT&T is an obvious coup. The San Antonio local-phone giant gets AT&T Corp., the nation’s preeminent long-distance network. Along with it comes a who’s who of business clients, not to mention enough savings — $15 billion — to virtually pay for the deal. No wonder SBC CEO Edward E. Whitacre Jr. calls the deal “a great opportunity.”

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.