There may be light at the end of the tunnel for all those venture capitalists waiting on their communications equipment startups. The proposed acquisition of Lucent by Alcatel is the first step in an overdue consolidation round among networking hardware companies.

Tim Savageaux, a research analyst at Merriman Curhan Ford & Co., wrote today that Nortel is next. Whether the Canadian incumbent is a buyer, seller or merger, it will be the next to be involved in a strategic transaction. At least it should be. But, who knows what goes on in the board suite there.

Following the acquisition of Marconi by Ericsson, a combined Alcatel-Lucent will encourage Siemens, Nokia, NEC and Motorola to offer more complete solutions to their telecom customers. This will prompt them to take a renewed look at all the startups that raised millions in venture capital from 1999 to 2001 that have since struggled to stay afloat. This new round of consolidation could be their last chance at a respectable exit. — Joshua Jaffe

Go to Lucent's press release
Read The Deal's story about the proposed merger