Traditional wireline carriers have long played on a relatively even playing field, offering such services as voice, private line, frame relay, IP and Ethernet. These larger carriers - AT&T, Verizon, BT, Orange and T-Systems - have been achieving marginal (not dominant) differentiation through the offering of more complex ICT services. Newer megacarrier services now include WAN acceleration, security, contact center, LAN management and desktop support. In comparison, the midtier players - Global Crossing, XO, Paetec and Level 3 - focus on the core network services and a limited base of ICT services.

However, the ability of the select megacarriers to offer combined wireline/wireless offerings will accelerate this differentiation. In the U.S., both AT&T and Verizon are enabling their larger customers to pool their revenue commitments across wireline/wireless services. Both Orange and T-Systems have similar potential in Europe, as does Bell Canada in Canada. Sprint also has the opportunity to exploit this trend, should it be able to inspire market confidence by shoring up its financial and management issues.

Trends toward integrated wireline/wireless contracts will put pressure on the single-play providers. Companies like Qwest, Paetec, Level 3, Global Crossing and XO may not make it to the shortlist on some RFPs. In other instances, sage buyers will focus on price and thereby reduce the margins on single-play providers.

See "Forecast: Enterprise Network Services, North America, 2006-2012" for more.

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I do believe similar to the author that bundling wireline and wireless spends will start to drive more business to megacarriers but the real trend toward the megacarriers with come with more tightly coupled services. Bundling of voice and data services didn't start to drive combined spends until you saw network convergence. Now days one service provider wins both data and voice when converged services are purchased. I believe the same pattern will occur in wireline and wireless services. This convergence of wireline and wireless services will require changes in the existing service provider networks to more tightly couple voice, messaging, application management, software as a service and mobility. Single play providers should seriously look to carriers like Sprint, T-Mobile or even new emerging cablecos with wireless offering for strategic alliances before there business models become obsolete. Does anyone remember the long distance only business model?