Is there any value in U.S. telecom stocks these days? It's hard to find. AT&T is struggling, and Verizon (NYSE:VZ) and SBC Communications (NYSE:SBC) are trading at multiples that Fools find hard to buy. So, have a look across the pond, at London-based BT Group (NYSE:BTY), the former telecoms monopoly known as British Telecom. You might like what you see.

Stuck in the $24-$35 range for 12 months, BT Group trades at a lowly nine times 2004 earnings. That's a 35% discount to AT&T (NYSE:T), a 50% discount to Verizon and SBC Communications, and a 60% discount to Spain's Telefonica. A generous 5% dividend yield and plenty of free cash flow suggest that BT's absolute share price won't go any lower.

The market treats BT Group like a "no-growth" utility. That makes a bit of sense: Top-line growth has become a focal point for investors as revenue from traditional voice services has steadily declined due to regulation and competing services like wireless. The spinoff of mobile phone business MMO2 (NYSE:OOM) leaves BT Group nowhere to hide on the revenue front.

That said, there could be a turnaround in the making. The success of the company's broadband Internet rollout plan, with orders running at 45,000 a week, is the real bright spot. Two years ago, BT set itself a target of supplying 2 million wholesale broadband lines to U.K. Internet service providers by summer 2004 and 5 million by 2006. Four months ahead of schedule, BT has already hit the 2 million mark.

The best-performing BT Group division remains its global services arm. Analysts had called for the high-margin business to be shut down, but revenues are up after the firm won a number of large and lucrative IT contracts.

Skeptics argue that BT isn't the only U.K. player competing in the hot broadband Internet and IT services markets. But BT Group owns and operates the local and national networks that Internet competitors rely on to move email and Web traffic from place to place. The beaten-down stock, therefore, holds upside potential.

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Motley Fool contributor Ben McClure hails from the Great White North. He doesn't own any shares of companies mentioned here.