The SBC/AT&T deal could trigger a chain reaction that experts say will forever change the telecommunications landscape.

SBC's historic purchase of AT&T for $16 billion had barely settled into the public consciousness last week when additional merger reports began swirling. Published accounts reported Qwest and Verizon each are in talks with MCI. BellSouth and Sprint were also the subject of speculation, as industry watchers presume both to be in search of dance partners. No one sees any of these players standing idly by as SBC attempts to buy a leadership position in the enterprise market.

What's certain for the moment is that the SBC/AT&T union will change the fabric of telecom by creating a megacarrier that can offer a wide variety of services. The combined company will have about 120 million customers, $72 billion in revenue and 210,000 employees before planned job cuts. Customers could expect 12 to 24 months of uncertainty as this deal and those that follow, shakes out analysts say.

Network executives are watching the developments closely.

"The only thing that ever concerns me about having fewer players is pricing, but we'll most likely have fewer stronger players" when the dust settles, says Dennis Upton, CIO at printer and fax machine company Brother International in Bridgewater, N.J. "Otherwise, I have no other great concerns about this or future [interexchange carrier/local exchange carrier] mergers down the road."

"It's not going to be without hiccups, but do I expect anything major? No," says Fred Matteson, CIO at Fireman's Fund Insurance in Novato, Calif. "Any time you have mergers of titans like that, there are issues of relationships, [for example] consolidated account teams. I feel comfortable that the essence of the deal [between Fireman's and AT&T] can't and won't change during the process."

Last month, Fireman's awarded AT&T a five-year, $42 million contract to provide IP VPN services to connect 4,500 employees in 60 locations across the U.S. The new network replaces several disparate voice and data networks provided by multiple service providers - including SBC.

Michael Baker Corp., a longtime AT&T frame relay, Multi-protocol Label Switching and voice customer, expects to reap benefits from the union.

"I see it as a net positive because AT&T has been undergoing quite a bit of transformation with their workforce and other aspects of their business," says Davidson Scott, director of IT architecture and infrastructure at the Moon Township, Pa., engineering firm. "This provides a clear direction and some stability."

"A clear positive for Baker is on the voice side," he adds. "We use AT&T local services in a lot of our locations. The way they have been supporting that business and product set it's clear they have not been actively trying to grow that business. With recent regulatory changes, AT&T has been ceding to the LECs. But that's the core of SBC so I won't have to look for other local providers in SBC's territories and I expect [SBC] will focus on that business and reinvigorate it."

The Automobile Association of America (AAA) also sees benefits from the proposed deal.

"The merger, if approved, will have a positive impact on our organization," says Satish Mahajan, CIO and vice president of IS. "AAA is made up of independent affiliates and we have several national agreements with various telecommunications providers, including SBC and AT&T. . . . I think sufficient competition will exist within the industry to provide lower costs and potentially increased service levels."

If consolidation leads to cost benefits for the carriers, they might be more likely to invest in more research and development, which result in faster innovation and better end-to-end service, Mahajan says.

In addition to FCC and Department of Justice approvals, the deal must be OK'd by some two dozen independent state regulators. The companies say it will take 12 to 17 months for that to happen.

The acquisition would give SBC an immediate and authoritative calling card into the enterprise accounts it covets. SBC has expressed a desire to increase its $5 billion share of the $34 billion enterprise market in its 13-state region, where 49% of the Fortune 500 reside. AT&T, with four times the enterprise revenue, will allow SBC to do that.

But the carriers' respective enterprise fortunes are heading in opposite directions.

For the fourth quarter, which ended Dec. 31, SBC had business data revenue of $1.4 billion, a 12.6% increase from the fourth quarter of 2003. The carrier's overall business wireline revenue grew 3.3% from the fourth quarter of 2003, the enterprise piece of which grew 5%.

AT&T, on the other hand, had business revenue of $5.5 billion in the fourth quarter of 2004, a 7.4% decline from the same quarter of 2003. Data revenue fell 13.7%, but in IP and "enhanced" services revenue grew 13% from 2003's fourth quarter.