TELECOM Digest OnLine - Sorted: Re: Verizon GTE Merger -- How Did it Go?

Re: Verizon GTE Merger -- How Did it Go?

Steven Lichter (
Thu, 01 Dec 2005 01:59:35 GMT wrote:

> A while back Verizon (formerly Bell Atlantic and Nynex NY Telephone et
> al) acquired GTE -- General Telephone & Electronics local phone
> companies. GTE was the biggest of the "independents", that is, local
> telephone companies not affiliated with the Bell System.

> I was wondering how well the integration of GTE into Verizon was
> working.

> The former Bell System was heavilly standardized, down to the pens on
> desktops. Most equipment came from Western Electric and usually
> (though not always) was the same throughout the country. By equipment
> I mean switchgear, carrier technology, and local loop plant (and pay
> phones). Also, business practices were somewhat consistent, such as
> rate plans and service representative styles.

> In contrast, I don't know how much GTE was standardized. For one
> thing, GTE was made up of smaller local independent companies acquired
> or traded over the years. In the 1970s, many local companies
> "swapped" exchanges so as to give each other contiguous areas instead
> of a patchwork for more efficiency.

> GTE owned a supplier, Automatic Electric. However, I wonder if GTE
> was so strictly wedded to AE as was Bell to Western. In other words,
> over the years perhaps equipment from other suppliers was used as
> well. My impression was that GTE was always more "informal" and less
> rigid than the Bell System in doing things. (Just as Remington
> Rand/Sperry Univac was much more informal than IBM in the computer
> industry).

> A key difference between Bell and GTE was that overall GTE (and the
> other independents) tended to serve much less densely populated areas.
> A map of Pennsylvania shows half the land mass of the state served by
> "independents" yet the vast majority of phones were under Bell
> control. Historically, Bell gained control of the cities and nearby
> suburbs while the independents were generally left with the rural
> areas (there are some exceptions). I wonder if this characteristic
> has impacted the merger.

> Merging two dis-similar organizations can bring down both if not done
> carefully. The Penn Central Railroad is the classic example of how
> not to do a merger. In more recent years, megarailroad and airline
> mergers have had troubles too.

> [public replies, please]

By the time of the merger GTE was pretty standard. It for the most
part was installing Nortel and Lucent switches. Also GET merged AE
with Western Electric long before the merger and now it is wholly owed
by Lucent with support for the GTE 5, but that is really it.

To me a retired GTE employee the merger was a complete mistake, as you
said they are dis-similar, GTE always had large amounts of money and
no debt, now the company has a lot of debt and its stock is in the
dumps. I have done contract work for Verizon in Washington State,
Oregon as well as California and it still seems to be running about
the same, it is run by regional Presidents.

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