Summary
The Tier 1 carriers across the globe are increasingly looking for fewer vendors. In addition, with those the carriers have selected, they want them to do multiple things. Undoubtedly, Verizon Wireless made it clear to Ericsson that it would really benefit in terms of future sales in going after Nortel’s wireless business.
Analysis
Verizon Wireless does not want to have to deal with a second vendor, such as Nokia Siemens, for major equipment purchases. While the ultimate success of the efforts to consolidate the number of vendors at large carriers will be determined in the future, the move by AT&T to get to a list of domain vendors is being duplicated at other service providers. It was a major point behind British Telecom’s 21CN. Similar behavior can be seen from France Telecom. While the French carrier has not announced an official program, it is definitely buying from fewer manufacturers. Verizon as a whole seems to be trying to trim the number of equipment providers. Broadly, what all of these service providers are doing is keeping their OPEX down. Any kind of actual technology convergence is another factor in going with a smaller number of vendors. The carriers want greater control over where they want to see developments heading.
Samuel Greenholtz consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
