Cisco the consolidator?

The Wall Street Journal last week ran a lengthy article focused on the potential vendor consolidation that could come with the mergers of large Bell companies with long distance providers. The assumption was that these new behemoth carriers would only want to deal with equally massive vendors. This is not a unique perspective, mind you. The top four big local carriers gave start-up vendors "come hither" looks about five years ago, resulting in the equivalent of a few one-night stands but little in the way of long-term relationships.

What made me take notice, though, was the thought that Cisco Systems could be a consolidator, buying up either Lucent or Nortel, which would put it more squarely in the access market. This also isn't exactly a new thought.

Cisco has been sniffing around the telecom access market since rents in San Jose were considered reasonable by the rest of the country. On several occasions over the last six months, I've spoken with executives who hinted that the company could be interested in acquiring a DSLAM company or some equivalent. However, because of Alcatel's size, one could safely assume there would have to be other motivations for that transaction. That leads to a slew of other vendors such as Adtran, Calix or ECI. All could be potential targets and would give Cisco not only the technology but the imbedded base it desires.

It also would signal a long-anticipated consolidation among access vendors. Cisco certainly has the financial muscle to be that consolidator.

E-mail me at vvittore@primediabusiness.com.