Telecom awakens to M&A hangover

The cost of industry consolidation over the last few years was not just limited to the deal prices quoted to Wall Street. 2007 was the year that the telecom began to deal with the ongoing cost of consolidation, such as technological and corporate integration. The most obvious example at the carrier level was Sprint Nextel's ongoing difficulty in merging different network technologies and corporate cultures, a job that still isn't done.

At the vendor level, Alcatel-Lucent continued to disappoint: missing expectations, cutting jobs and losing key executives. If CEO Pat Russo's latest adjustments don't turn this giant around, top-tier vendor consolidation will have proven a disastrous trend. But, Alcatel-Lucent wasn't alone. Nokia Siemens Networks also was hit hard by disappointing performance, job cuts, and ultimately the very vocal displeasure of partner Siemens.

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- Further outsourcing must be part of the future plan for mega-vendors

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