History doesn’t repeat, but telco mega-mergers often rhyme. Lessons from 30 years of telco partnerships
- Tim Sullivan
Mark Twain is often credited with observing that history doesn’t repeat itself, but it often rhymes. Watching the discussion surrounding the proposed BT-Verizon joint venture, that observation feels relevant.
In my previous article, I argued that enterprise networking had entered a new era, where competitive advantage was moving away from network infrastructure ownership towards operating model, software, automation and the ability to consistently deliver business value.
It also raises another question.
If strategy creates potential, what determines whether value is actually realised?
Every major industry transaction begins as a discussion about strategy. History suggests it is ultimately remembered for its execution.
The strategy isn't the interesting question
There is a strategic case for the BT-Verizon joint venture. Multinational enterprises often want fewer strategic suppliers, broader global reach and simpler commercial relationships.
BT and Verizon each bring considerable strengths, global customer relationships and complementary geographic footprints. If successfully integrated, the venture could simplify operations and improve customer outcomes.
So, this isn’t a critique of the strategy. In fact, history suggests the strategic rationale behind many large telecom partnerships is usually sound.
The more interesting question is whether strategic ambition can be translated into operational reality.
This distinction between strategy and execution extends well beyond telecoms and global networks. McKinsey recently examined the relationship between strategy and operating models and observed that even high-performing organisations leave around 30% of a strategy’s potential unrealised because operating models fail to translate strategy into execution.
Their broader point is important: strategy needs to translate into clarity, speed, skills and commitment if its potential is to be realised.
That provides a useful lens through which to consider any transaction of this scale. The strategy can be solid and the opportunity substantial, yet the realisation gap still emerges in execution.
The telecom industry has been here before
Jonathan Rowan recently published an excellent article reflecting on Concert, the BT-AT&T joint venture of the late 1990s, and the broader lessons from other previous telecom collaborations. His perspective is particularly interesting because he experienced Concert first-hand as a consultant on the winding down of the JV.
The history goes beyond Concert. Global One brought together Deutsche Telekom, France Télécom and Sprint, while Unisource combined several European telecos. Different structures, different participants and different circumstances, but each was responding to a similar customer requirement: multinational enterprises wanted global reach and a more consistent service experience.
Each initiative began with credible strategic logic and significant corporate backing. Bringing together complementary assets promised greater scale and broader reach for multinational customers.
Yet execution proved harder than the strategic vision ever suggested.
Integrating systems, aligning sales organisations, reconciling operating processes, establishing governance and maintaining customer intimacy while continuing to support mission-critical environments is difficult. These challenges become greater when the organisations involved have decades of their own processes, technologies, commercial models and cultures.
None of this means BT-Verizon is destined to follow the same path. Both organisations can draw on decades of industry experience about what works and what doesn’t.
History provides context, not destiny. What it consistently reminds us is that strategic logic is rarely the limiting factor.
Customers experience execution, not strategy
Every CEO understands there is a considerable difference between announcing a strategy and operationalising it.
Boards approve strategy, investors analyse synergies and markets debate the merits of the transaction. Enterprise customers experience something more practical: the execution.
Enterprise customers rarely scrutinise corporate strategy directly. They experience the decisions that follow it: whether incidents are resolved more quickly, whether account teams remain stable, whether innovation accelerates, whether deployment becomes easier and whether resilience improves. Those practical outcomes shape customer perception far more than the announcement itself.
Strategy is defined at seminal moments. Execution is judged every day. One is approved in boardrooms; the other is experienced continuously by customers.
This is also where I think it’s important to distinguish between the strategic and practical perspectives. My co-founder Ciaran Roche recently wrote about what enterprise customers should consider when a global provider changes ownership, including continuity, contracts, service arrangements and other practical implications of transition.
Those are important considerations, but the question I’m interested in here is: why do these execution challenges consistently recur, even when the strategy itself makes sense?
I think the answer lies in the operating model.
The operating model is where strategy becomes real
An operating model isn’t simply an organisational structure. It encompasses how decisions are made, how accountability works, how technology and processes fit together, how people are incentivised and how quickly an organisation can respond when circumstances change.
This is where the McKinsey research is particularly relevant for enterprise IT stakeholders in MNCs. It argues that operating-model transformations need to align structure, governance, processes, technology, behaviours, leadership and talent around the strategy. When those elements reinforce one another, organisations can move with speed and clarity. When they don’t, the gap between strategic ambition and actual performance widens.
For the BT-Verizon venture, the execution challenge is therefore not simply rationalising network assets and teams. It is creating an operating model capable of turning the combined scale of the two organisations into a consistent customer experience.
That means resolving questions of decision rights, product priorities, technology platforms, investment, leadership, culture and customer ownership while continuing to deliver services every day.
This is difficult in any large integration. A 50:50 joint venture adds more friction.
The challenge of 50:50 - alignment matters most
A 50:50 structure demonstrates commitment from both parties, balances economic interests and creates shared responsibility for the venture’s success.
However, equality of ownership doesn’t necessarily create clarity of decision-making.
The real test comes when interests or priorities diverge. What takes precedence? How are competing investment priorities resolved? What happens if one shareholder wants to accelerate investment while the other prioritises returns? How quickly can the venture make difficult decisions?
These aren’t criticisms of BT or Verizon. They are inherent governance questions for any 50:50 venture.
Obviously, governance arrangements need to work when shareholders don’t agree. The challenge isn’t avoiding disagreement; it is creating decision rights and governance mechanisms capable of resolving disagreement quickly enough that customers never feel it.
This matters even more today because the market itself has accelerated. Enterprise customers expect providers to respond quickly to new security threats, acquisitions, cloud migrations, new market opportunities and changing technology requirements. A governance model designed around consensus needs to demonstrate that consensus won’t become a delay.
Execution is where value is realised
This brings me back to the argument in my first article.
If competitive advantage in enterprise networking is moving from infrastructure ownership towards operating model, software, automation and outcomes, then execution becomes more important, not less.
The combined scale of BT and Verizon could create considerable strategic potential. But scale itself isn’t the customer outcome. The value is realised only when that scale produces better resilience, stronger security, faster deployment, greater innovation and a simpler customer experience.
That requires engineering capability, automation, leadership, aligned incentives, clear governance and culture working together. It also requires the ability to continuously improve the operating model after the initial integration work is complete.
You can’t simply merge your way there.
That is the common thread running through thirty years of telecom mergers. The strategic ambition was understandable. The customer requirements were real. The assets were valuable. The challenge was converting all three into a coherent operating model capable of consistent delivery.
A Reflection in Closing
A stronger global provider capable of delivering broader reach could benefit multinational enterprises and strengthen competition across our industry.
History doesn’t argue against that ambition, nor does it predetermine the outcome. The technology, the organisations and the market have all evolved.
What history does provide is perspective. Strategy attracts attention because it is visible and can be articulated in a press release. Execution receives far less attention because it happens gradually, across thousands of decisions, processes and customer interactions. Yet both telco history and broader research on operating models suggest this is precisely where much of the value is ultimately created or lost.
The BT-Verizon joint venture should therefore be judged over time not simply by the logic that created it, but by whether that logic translates into better outcomes for multinational customers.
Strategy creates potential. Execution creates value.
Perhaps that’s why history continues to rhyme.
