Merger Talk Rings Hollow for Big Telcos

The telecom merger mill is ready to roll. Now if someone would just give it a good push.

As AT&T(T Quote) and BellSouth(BLS Quote) continue their protracted courtship, word abounds of new discussions among other players. Some are busily lining up would-be blockbuster matches, while others are chalking up contingency plans and considering consolation prizes.

In the wake of Monday's acquisitions free-for-all in the banking and health care sectors, the prospect of a wave of telecom consolidation must sound good to investors. After all, the growth-challenged old-line telcos haven't exactly been the market's sweethearts in recent years. There's only one hitch: Someone's got to move first, and as yet, actual action has been in drastically short supply.

"Basically, if BellSouth and AT&T merged, it would provide a great impetus for the others to do something, since it would instantly make BellSouth a major player," says Sam Greenholtz, an analyst with Telecom Pragmatics. ...