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Posted by Stephen Hardy

AT&T;'s response to inquiries regarding Morgan Keegan & Co.'s note yesterday regarding a plan to reduce its supplier count to two for each of about 14 technology domains: "We have no comment on this."

Simon Leopold, communications equipment analyst and managing director at the broker-dealer, issued a note yesterday saying he was starting to take seriously information he had received regarding a potential AT&T; plan to drastically reduce the number of equipment vendors with which the company does business. The goal, based on what Leopold said he had heard, was to have only two supplier in each of "roughly" 14 technology domains. (Leopold did not list the domains in the note.) Naturally, it seems likely that AT&T; would end up with fewer than 28 suppliers, on the assumption that some suppliers would remain viable in multiple domains.

The initiative has three goals, according to the note: cost savings, risk reduction (particularly in the face of Nortel's bankruptcy filing), and streamlining of major projects. AT&T;'s success with Alcatel-Lucent on the U-Verse roll out served as a proof point of this last element, Leopold suggests.

While Leopold asserts, "[w]e consider it premature to panic," this news, if true, clearly would make systems suppliers nervous -- particularly smaller ones whose narrower product lines would potentially lessen their opportunities to stay engaged.

As I've indicated above, AT&T; isn't shedding light on Leopold's report. (The quote above came courtesy of Jenny Bridges, who handles trade media inquiries at the carrier.) If anyone has any further info, I'm all ears.

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Blogger rsqrd said...
Maybe AT&T can ressurect Western Electric and control the process of providing communications from beginning to end.
Thursday, June 11, 2009 5:58:00 PM EDT  

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The Lightwave editorial staff uses The Lightwave Blog to share their thoughts on optical communications and whatever else might be the current topic of conversation from cubicle to cubicle. Feel free to add your own opinions.

Stephen Hardy is editorial director and associate publisher of Lightwave, which makes him responsible for the editorial aspects of the Lightwave franchise. A technology journalist since 1982, he once had his job duties described as "gets paid to tick off advertisers ".

Meghan Fuller is senior editor of Lightwave. She has degrees from Franklin & Marshall College in Lancaster, PA, and the University of Delaware and is a card-carrying member of Red Sox Nation.