Phone Suppliers Staying Single

Big phone companies keep pairing up, but their suppliers are proving stubbornly independent.

The telecom industry is full of battle-hardened networking gearmakers. Having narrowly survived the sector wipeout of a few years back, outfits ranging from Lucent (LU Quote) and Nortel (NT Quote) on down the line have shown that they're lean enough to paddle on even through stormy market conditions.

But investors are feeling a little damp, finding that their reward for sticking with these outfits is minuscule growth. Worse yet, sales gains are probably going to get harder to find as big phone company customers merge -- and analysts don't see a corresponding merger wave on the equipment side for at least a year.

The last few months have brought proposed linkups between SBC Communications (SBC Quote) and AT&T (T Quote), Verizon (VZ Quote) and MCI (MCIP Quote), and Sprint (FON Quote) and Nextel (NXTL Quote). Around this time last year, Cingular and AT&T Wireless rolled out their own plans to fuse together. ...