Dial up mode: Telecom companies of all stripes are struggling to shrug off 2001. Here are the calls you don't want to miss.(Industry Overview)

Buyside, March, 2002 by Chensvold, Christian M.

If you live in a major metropolitan area, you probably think middle America is like another country. And in a certain way it is. The rural parts of the country have not adopted telecom services at the same rate as urban areas. For example, second lines, caller ID, DSL and wireless are all at penetration levels that urban centers had achieved several years ago.

Which is why RLECs -- Rural Local Exchange Carriers -- are one of the best plays in the telecom industry right now.

"We view this group as rocks of stability in a volatile industry," says Glenn Waldorf of UBS Warburg. "These companies are former or even current monopolies, have government subsidies. Their cash flow margin exceeds those of the bells, and they're a noncyclical sector."

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