Another formerly high flying telecom provider being bought:
Verizon to buy MCI in $6.7B deal, beating out Qwest - Feb. 14, 2005:
"Verizon Communications agreed Monday to buy MCI in a cash, stock and special dividend deal worth nearly $6.75 billion that could result in as many as 7,000 job cuts."
Wonder what this means for that industry?
Oh look, more consolidation, less competition. Go fig. I guess my comments on the "Nothing lasts for ever" post still apply. :)
ReplyDeleteYeah, but I can't help to think that all this consolidation is happening because of competition from Voice over IP and like services.
ReplyDeleteVoice over IP, isn't. While there are a lot of services emerging that call themselves Voice over IP (and I guess, technically, they can use that term since they are moving voice over an IP network) the "real" voice over IP world seems to be moving very slowly. There are very few voice IP routes available, and as far as I know, there's only a single public exchange point where IP networks exchange them. The current voice over IP offerings simply use IP to drag a recorded voice signal from point A (eg. your Vonage box) to point B (eg. Vonage's 5E switch.) In that sense, it could be voice over any-medium-whatsoever, it just happens to be IP. The only difference between these offerings and the Internet phone toy programs we played with 10 years ago is the advent of broadband (lower latency), better compression, and full-duplex sound cards. In truth, by avoiding POTS/PSTN and the public exchange altogether, one could argue that those 10 year old toys are more "true" VoIP solutions.
ReplyDeleteThat's interesting, I did not realize that...
ReplyDeleteDon't you think, though, that how ever Vonage, and Time Warner are introducing these services they represent a threat to traditional long distance carriers like MCI?
I just had a friend call me on an "Internet" phone from Brazil, the quality was very good. It came up with a Utah area code - where I assume he got his phone. Since there was no long distance charges, we just spoke forever.
It was pretty cool.
Utah could simply be the location where his Internet-phone provider or one of his provider's partners has a traditional phone switch that bridges them onto the pots network.
ReplyDeleteThese systems are a small threat to traditional long distance carriers, and the threat will grow over time. But these big carriers see the writing on the wall and are already taking steps to meet that demand. Verizon is more interested in acquiring MCI's internet (UUNet) holdings and customer base than their actual long distance service. The same can be said for SBC's AT&T acquisition.