The end of telcos
Telcos are well aware of the velocity with which the Microsoft juggernaut is hurtling towards them. The tragedy is that they are so heavily invested in all the stuff that they have -- OSS/BSS systems being one example -- that they simply cannot turn the ship around in time. There's also a cultural problem where telcos simply aren't emotionally ready to develop at the speed of new competitors - 9-12 months to release product instead of 2-3.
As I see it, in the US at least, telcos persist because of quirks in the regulatory environment. If the FCC relaxed the requirements on local number portability and broke the universal service requirement, the telcos would disappear overnight under the onslaught of MS/google/amazon and the other lightweight IP phone providers.