AT&T narrowing its vendor source list

AT&T has began to reduce the total numbers of vendors it works with on various parts of its network and operations, and speculation has begun about who will get voted off the island (Do people still say that?). Morgan Keegan & Co. analyst Simon Leopold said in a research note the process presents a risk to the vendor community. This could particularly be the case for the smaller specialist vendors who may focus only on one or a couple of the carrier's 14 technology domains.

Not surprisingly, larger, more diversified vendors like Alcatel-Lucent, Ericsson and Cisco Systems could be better off, which is exactly what these companies were hoping when they pursued the acquisition programs a few years back that made them larger and more diversified. 

Other carriers may be looking to do the same thing as AT&T, as they look to have less complex administrative needs, better pricing advantages dealing with single vendors for multiple domains, and faster overall project execution. The AT&T list may shrink from about 40 vendors to 28 or fewer (two per technology domain). The move comes about a decade or so after many carriers pursued the opposite mission--diversifying their vendor source lists to open themselves to more best-of-breed equipment and innovation going on in particular technology sectors that was not necessarily being done by the largest vendors. Diversifying was also supposed to create competition between vendors to result in lower equipment prices for the carriers.

For more:
- Barron's Blogs has this post
- Light Reading has this story

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