AT&T buy Bellsouth for $67bn

AT&T is back! The once industry leader that under CEO Armstrong spent much of the 1990's trying to own the telco universe only to fall flat on its face at the turn of this century, is now dominating again. It may have new owners and managers - but AT&T is back with avengeance.

For having barely recovered from being bought by SBC Communications, the new AT&T has just decided to buy Bellsouth.

So will they fall on their face again? I doubt it this time. The industry is ripe for consolidation and the regulators are more open. AT&T is now building a telco and media giant that Armstrong dreamed of but could never deliver.

And AT&T need to bulk up to take on other telco's and more importantly cable and Internet challengers. Plus they get to own Cingular, the US number 1 wireless operator, 100%. Given the growth Cingular is enjoying that makes sense.

So the new AT&T has operations across the US from California to Florida and over 100M customers, plus a strong corporate telco arm. They have the US leading mobile operator and they are spreading their hi-speed Internet and TV networks across the US. AND they get to leave Verizon in their wake. For Verizon will be worth less than half the post merger AT&T/Bellsouth.

Verizon will have to respond and at least buy Vodafone out of Verizon Wireless so they own it 100%. And rumours are running around that Verizon might snap up Quest. This makes less sense to me. Quest has far too much debt. Perhaps they should go another route and buy a media outfit or an Internet company. Now that would be truly revolutionery? Armstrong would surely applaud.