If you are looking for extraordinary growth coupled with market-risk levels, you want telecommunication stocks in 2008! The industry as a whole has been one of the strongest performers to date, and it is generally somewhat recession proof (people always want to talk!). Catalysts for the long-term include explosive growth in emerging mobile markets, increasing demand for bandwidth (speed), and a large-scale shift from copper wiring to fiber and broadband wireless. The bulls are out, lets grab some value.

Telecom Services - AT&T (NYSE: T)

Wireless momentum continues to power the market in 2008, and AT&T is right there leading the pack with over 65 million subscribers in the United States. They met expectations in their forth-quarter earnings call (that's the 11th straight quarter of double-digit growth in earnings), but the really important news here is that wireless results were above expectations and guidance for 2008 was reaffirmed. I think AT&T has what it takes to lead the market into the mobile age of technology. Already, we have seen 57.5% year-over-year growth in wireless data revenues, driven by this increasing adoption of smart phones and 3G wireless devices. Essentially, computers are becoming smaller, and I think that these iPhones and Blackberrys are simply early models of the personal computers of the future.

What's wrong with Verizon (NYSE: VZ)? I really can't say, as it is a bit of a crap shoot at this point. I'd have to give the edge to AT&T because of their proven ability to grow earnings despite being so large, and their willingness to open networks toward new computing technology. What really pushes T over the edge for me is its steady 4.5% dividend yield, earnings visibility, growing wireless business, favorable balance sheet, long-term strategy and strategic acquisitions (successful acquisition of BellSouth in 2007). You can look toward their IP-services and whatnot... but you want AT&T for their superior wireless dominance in 2008.

Telecom Services - Millicom (NYSE: MICC)

Once again, Millicom blew away expectations by producing an amazing 3.4 million net subscribers and 41% revenue growth in the forth quarter alone. This company is on cloud nine right now, and while margins were slightly below expectations... guess what... they were 40.0%. Essentially, what Millicom is doing is bringing wireless technology to places that are underdeveloped. They charge by the second, rather than minute, to increase their value to thrifty subscribers and are very active in emerging markets. I am confident in their growth, and Millicom is my Telecom stock for 2008.

MICC is going to kick off 1Q08 with a bang due to their 4Q recorded net-add increase. Broken down by region: Central America growth should drive from new 3G technology and higher-quality customers, African markets have seen dramatic margin increases with new subscribers, Columbia has been negatively impacted by connection fees but should rebound nicely and Asian market investments should continue to propel strength in this key market. MICC is impressive across the board, and their huge international exposure should prove beneficial in 2008.

Comm. Equipment - L-3 Communications (NYSE: LLL)

The Telecom sector of the Nittany Lion Fun, LLC. regards L-3 as a communications company. We argue in jest back and forth, but I'll give them the benefit of the doubt here and put them in my Telecom portfolio for now. Anyway. L-3 is NOT a value play, they are just a great recession-weathering, military-contracting, growth-driving powerhouse that trades at a premium and deserves it. Analysts that put this company at a HOLD rating just don't understand their fundamentals. Again, L-3 raised guidance for 2008 in the face of a recession. Cash is still king for LLL, at $1.11 billion in free cash flow for the year (1.47x net-income) and they seem to be in a great spot for further M&A activity in 2008.

One of their chief growth ventures has been the "Linguist program," a support services contract initially lost to Global Linguistic Solutions LLC (NYSE: GLS). LLL has protested this to the point that they have a major share in the project and are continuing to expand their funding in the project, meaning a huge potential catalyst in 2008. Even without this, their backlog saw another record level (now $9.6 billion) and despite the fact that they are trading at a premium... growth continues onward and upward. Bottom line: take the skeptics views and factor them into your purchasing price, try to buy this one on the dip. My point: L-3 is a winner and justifies a premium share price.

Telecom Services - Telefonica (NYSE: TEF)

Telefonica is an international telecommunications value play in the market. I actually favor them over competitor America Movil (NYSE: AMX) because they are trading at nearly a 2:1 discount (10.5x versus 20.5x). But not only does TEF have a strong position in core domestic markets (main source of cash flow), but they offer the speculative growth opportunities through ongoing international investments. Standard and Poor's ranks their growth portfolio best-in-class, and I agree with them because of their strength in margins (EBITDA 40%%2B) and consistent sales.

We've kind of seen "roller coaster" growth from Telefonica over the years, but it all trends upwards and that's what we care about. Finding value in TEF, we see an attractive price to get in right now in the mid-to-low $80s. The Latin American markets account for most of the revenue for Telefonica, but only 10% of the EBITDA growth. There is without at doubt very high risk to competition, but I see Telefonica as beating its peers in the long-term, maintaining its great margins and expansion capacity. Noting their apparent risky-business, they actually are not too risky with a PEG of 0.58 and Beta at 0.88. You can count on this international powerhouse for continued growth in 2008, despite all of the lurking naysayers.

The Telecom sector is a great opportunity for investors, and is often missed when viewing the stock market's relative strengths and weaknesses. The truth is, a strong trend toward mobile technology calls for diversification into the telecommunications sector in order to ride the bull. AT&T, Millicom, L-3 and Telefonica are all stellar performers that should add great value to any portfolio.