"I absolutely see it as a volatile market right now," he said. "The big piece to this right now is with the packet core -- or in the LTE space, the evolved packet core -- and a lot of that equipment is really from people who have expertise in the router world … but there are little pieces that surround this core network that potentially could be acquisition targets."
Carriers can also expect microwave radio vendors to become acquisition targets of big core players such as Cisco Systems and Juniper, which may try to differentiate themselves by building up their access and edge network offerings, Rubino said.
"I actually see the major vendors in the packet core as pretty much at the same level -- Cisco's there, Alcatel-Lucent's there, Tellabs' there, Ericsson's there," he said. "The cost of doing [mobile traffic backhaul] through fiber optics is coming to a standstill, and the cost of doing it through microwave is coming down, so there may be some microwave acquisitions."
Consolidation among LTE vendors may not cause problems
The dismembering of Nortel Networks' various lines to multiple vendors over the past year -- after the former telecom giant filed for bankruptcy protection in early 2009 -- was a carrier's investment protection nightmare made manifest, Kish said.
But consolidation among LTE vendors in such an immature market may not be a bad thing, according to both analysts.
"I don't think that it's cause for concern. It's kind of like the chicken and egg scenario -- if a major operator is deploying a small company's equipment, [that vendor] potentially may be a target for acquisition, regardless of what their financial health is," Rubino said. "They may have a technical solution that's desirable for that space, and the acquiring company [has the resources to] expand on it in the future."
The telecom industry has a reputation for being "a very incestuous business," Kish said, meaning that carriers aren't likely to be blindsided by anything completely disruptive.