Fool Poll: Best Telecom Investment

Last time, you voted Nokia as the top smartphone supplier. But what about those who supply the signals to its gadgets? Which telecom stock are you buying? Read on for our Foolish take on the top five, then vote for your pick!

Telecom is a richer business than you think -- at least, according to the U.S. government. On Monday, The Wall Street Journal reported that the feds are looking into whether large U.S. telecom providers are abusing monopoly power.

Ma Bell may once again be Uncle Sam's primary target. According to the Journal, the feds are concerned about exclusive agreements between telcos and smartphone makers. In this case, "agreements" could refer to just one: AT&T's highly profitable distribution deal with Apple (Nasdaq: AAPL  ) for the iPhone.

Yet exclusivity may not be much of an advantage. Verizon's wireless group already distributes the BlackBerry, and it will soon add the Pre -- and perhaps even the iPhone.

So don't discount Ma or her babies; each of them has its own advantages. Let's review all five candidates before we open the polls:

AT&T (NYSE: T  )
Cheap by classic valuation metrics, Ma Bell also enjoys strong wireless growth thanks to the iPhone. Mix in a better-than-6% dividend yield and its highly regarded U-verse offering for Internet-based home entertainment, and this old lady looks younger than she has in years.

Verizon (NYSE: VZ  )
AT&T's biggest rival is tops in wireless network reputation, and a fast mover in that segment of the market, with 12.4% revenue growth in 2008. Verizon also seems to be the network that every smartphone vendor wants to work with -- an enviable position.

Sprint Nextel (NYSE: S  )
Another swimmer in the "exclusive agreement" pool, Sprint also benefits from being the sole supplier of Palm's (Nasdaq: PALM  ) Pre until at least January. It's also cheap enough to get noticed by our Motley Fool Inside Value team.

Qwest (NYSE: Q  )
I'd dearly love to see my local telco succeed. The good news? Cash still flows freely to its coffers. The bad? Qwest pays more than $1 billion in interest each year, and it has no wireless network to speak of.

Clearwire (Nasdaq: CLWR  )
The would-be WiMAX kingpin is teaming with Sprint Nextel in a race to be the first to deploy a national fourth-generation telecom network that delivers voice and data at very high speeds.

Which of these five gets your vote? Who else would you prefer? Drop in a comment below and let us know what you think.

Apple is a Stock Advisor selection. Sprint Nextel and Nokia are Inside Value picks. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple, as well as a stock position in Nokia at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy can stand only so many ringy-dingys.


Read/Post Comments (5) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 07, 2009, at 3:10 PM, MaBellIsDead wrote:

    Ma Bell has been dead for years. The term, as you use it is inaccurate and useless.

    Please find a way to express yourself without worn-out, meaningless terms.

  • Report this Comment On July 07, 2009, at 8:22 PM, TMFTypeoh wrote:

    I think you left out a few other winners, such as the international players. TLK, AMX, TKC, NZT, FTE, VIP.....etc should all be included on this list.

    To me, TLK will be the long term big winner, with the largest potential customer base to tap into. For a pure dividend play, FTE is the way to go.

  • Report this Comment On July 07, 2009, at 8:42 PM, Seano67 wrote:

    TKG also offers a killer dividend.

  • Report this Comment On July 08, 2009, at 1:43 PM, lemoneater wrote:

    I like Cellcom Israel CEL. They give a generous dividend.

  • Report this Comment On July 12, 2009, at 11:35 PM, streetflame wrote:

    It's quite obvious that the best telecom investments will not be found in the US, a completely saturated market. In addition to the stocks listed above I would offer MICC, TMB, HTX, and NIHD. TKC is my favorite though.

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