Telecommunications: Hold On, The Gates Are Swinging Open

In the heady world of high-tech stocks, phone companies are a problem. By rights they should be very much a part of the boom in high tech. Virtually every online transmission, every interactive transaction, every Internet access call is carried over a phone line--and the phone companies collect the tolls. They have nice steady earnings growth and pay a nice steady dividend. Yet telco stocks have underperformed the market in the past three years, and their five-year earnings growth forecasts rarely exceed 11%.

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