The Report on Business magazine has an interesting profile on Telus CEO Darren Entwistle, which offers some insight into arguably Canada's most dynamic telecom executive. It includes the surprising contention the 44-year-old may have plans to walk away from telecom in four or five years to teach strategy and leadership at a U.K. university - as opposed to moving on to bigger and better things such as CEO of a U.S. RBOC. The only thing I would quibble about in the story is the claim Entwistle "blew some of his regained credibility with a doomed $1.1-billion bid for Microcell" in 2004. Everyone knew Entwistle wanted Microcell out of the wireless game because its discounting tactics were hurting the industry's operating margins. By making the bid, Entwistle put Microcell in play and Telus in a win-win position. If the bid succeeded, Telus would become an even bigger wireless player in a fast-growing market. If the bid failed (which happened when Ted Rogers made a $1.4-billion bid), the market would be consolidated and market conditions would improve. Entwistle didn't blow his credibility; he made a brilliant strategic move that didn't cost Telus a dime.

For the second time in 27 years, Terry Matthews is taking Mitel public. This time around, the company is apparently looking to raise $150-million for "general corporate purposes". While Matthews is well-respected as Canada's leading telecom entrepreneur, it is important that potential Mitel investors realize the Ottawa-based company is posting large losses as it pours money into R&D,sales and marketing to compete with heavyweights such as Cisco, Avaya and Nortel in the IP communications market. For history buffs, Mitel originally went public in 1979 after it was started six years earlier by Matthews and Michael Cowpland, who later went on to start Corel Corp.

The speculation is over: Alcatel and Lucent have officially merged (unofficially Alcatel is buying Lucent given its shareholders will have 60% of the new entity) to create a $25-billion wireline, wireless and services behemoth. It is interesting that Alcatel is purchasing Lucent at a discount to Friday's closing price. Patricia Russo will become CEO while Serge Tchuruk will be non-executive chairman. AlcaCent also plans to eliminate 8,800 jobs, or 10% of the workforce, to reduce annual costs by $1.7-billion. So can we now launch the consolidation frenzy within the $336-billion equipment industry? How long before Siemens or Nokia pursue Nortel, or Huawei takes a run at Juniper or as Om Malik suggests will Juniper take a run at Huawei? For several years, the telecom equipment market has been waiting - desperately needing? - consoliation among the large players amid fierce competition, soft margins and a dwindling customer base. Perhaps fewer players is what's needed to restore some sense of fiscal health. That said, there is some healthy skepticism emerging. RBC World Markets' analyst Mark Sue said Lucent and Alcatel have distinctly different corporate cultures and any expected synergies will likely not emerge for a year. IP Democracy also has concerns about the French ownership of Lucent's Bell Labs operation, which does work for the U.S. government and security agencies.

So, Alcatel and Lucent are thinking about doing a $34-billion merger? While they will only admit to be "discussions", a deal could have huge ramifications on the telecom equipment landscape. Nortel, for example, would find itself with a formidable competitor in "Alcacent" and the speculation about Nortel doing a dealing itself - possibly with Siemens - could intensify. The Alcatel-Lucent deal, which has been rumoured before, is the kind of transaction the telecom equipment industy has expecting for the past several years because it is widely believed the market has to consolidate. So far, however, everyone has been afraid to make the big leap. That said, there have a series of joint ventures (Nortel-Huawei, for example) established, which suggests there's a lot of dating happening but everyone is still commitment-phobic and refuses to get married.
Update: The Networking Stock Blog has a nice round-up of buzz within the blogospher of the Alcatel-Lucent talks, while Om Malik provides an in-depth analysis of why the deal makes sense, and Mark Goldberg looks at how the consolidation within the telecom equipment would impact R&D activity in Canada.

The telecom industry sure moves in strange and mysterious ways in light of the Wall St. Journal report that AT&T will unveil the purchase of BellSouth for $65-billion. It was only 22 years ago, that the old AT&T was split into seven "Baby Bells" in wake of the Department of Justice's anti-trust suit. You can't help but ask what the AT&T break-up exercise was really all about now that Humpty Dumpty has been put back together again. If this mega-deal - a foregone conclusion says Om Malik - is completed, you'll essentially have AT&T and Verizon as the last guys standing what with AT&T/SBC having snapped up Ameritech, Southwest Bell, Pacific Telesis Group and BellSouth, while Verizon acquired Bell Atlantic and NYNEX. (Qwest bought U.S. West). So what does it mean from a competitive standpoint? It certainly sets the stage for an even more consolidation in the industry as Qwest could become the next (and last) big carrier to fall. It will also create an even more fierce carrier-cable war as they wage the "Battle of the Bundle" for consumers. Perhaps it will prompt some consolidation in the cable industry if some cablecos start to believe they need to become even bigger to compete effectively with the carriers. The deal will also have an impact on the already-fragile telecom equipment market as yet another large customer gets taken out of the picture. And another angle to the deal is it will allow AT&T CEO Ed Whitacre and BellSouth CFO William Smith to continue their crusade against Net Neutrality in an even more united way. At the end of the day, the question is whether the deal is good for the U.S. telecom sector. Will it allow carriers (well, at least Verizon and AT&T) to become more efficient and competitive with cable rivals? Will this be good for residential and business consumers? Only time will tell.
From a Canadian perspective, telecom consolidation has also been in progress with several carriers (Sprint Canada, GT Telecom, 360 Networks) acquired in recent years. The question is whether there's an indepedent future for small carriers such as Manitoba Telecom Services and SaskTel? Will the market eventually be BCE, Telus and a handful of small, rural exchanges?
Update: IP Democracy highlights the combined access and DSL lines of AT&T and BellSouth, and wonders if this is what the federal government had in mind with the 1996 Telecom Act.