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Uncertainty about the state of the modern telecom industry is everywhere you look. Though the T-Mobile/AT&T (NYSE:T) deal is still pending, many analysts speculate further consolidation will occur, especially for industry giants Sprint (NYSE:S), Verizon (NYSE:VZ) and Vodafone (NASDAQ:VOD). Here’s a look at eight players that dominate the industry, plus some commentary on their prospects moving forward.

Verizon (VZ): We think this once sleepy telecom has potential to enter a new growth phase as it grabs market share from competitors with its adoption of the iPhone handset. The company should be able to handle the new services demanded by customers, and on a relative basis, outperform its peers. Average revenue per customer should get a shot in the arm over the next few years as Verizon rolls out higher revenue bundled plans and increases smart phone penetration. The company is worth $36 per share discounted at a 10% rate. It's also worth a look for its dividend yield as we outlined here. Though the AT&T deal does throw a curve ball into Verizon’s plans, should the deal be approved, we think it’s very likely VZ will make strategic acquisitions to maintain market share in the face of new competition.

Sprint (S): Sprint served 49.9 million customers at the end of 2010. The company added a net 1.7 million subscribers in 2010, compared to a net loss of 1.1 million in 2009. In its wireless segment, the company generated $28.59 billion in revenues, which was an increase of 2.9%. However, the company has a debt to equity ratio of 1.27, and a current ratio of 1.25. Sprint faces an interesting dilemma. Obviously it missed the boat on merging with T-Mobile (the two had allegedly been in direct merger talks). But other interesting options still exist for this telecom giant. Sprint is fighting a Goliath. To take it on, it comes armed with $2.8 billion in free cash flows from 2010, which is a part of its $5.17 billion in cash and cash equivalents at the end of 2010. Its market cap stands at $13 billion. We think one of the most obvious options is for the company to buy Leap Wireless (LEAP). LEAP markets its brands in the U.S. as “Cricket.” At the end of 2010, it had only 5.5 million customers, and also added a net 241,546 customers. The company also brought in $2.48 billion in revenues, which was an increase of 22.1%. The company and its subsidiaries own licenses to cover an aggregate of 184.6 million POPs. The company has an enterprise value of ~$3.4 billion. A merger with Vodaphone or Verizon is also a possibility, in our opinion, if the AT&T is in fact approved.

China Mobile ADR (NYSE:CHL): China Mobile enjoys its 70% market share due to its well respected brand, excellent coverage and scale efficiency. As mobile phone penetration continues to grow at rates of other emerging markets, CHL will be an obvious benefactor due to its size ($70 billion in sales) and its dominant position in the PRC. The firm has 575 million subscribers, making it the largest mobile phone carrier in the world, and has 3 times the subscriber base of its nearest local rival. Along with its competitive moat, the company has a strong balance sheet, only $5 billion in debt and $46 billion in cash. The company is essentially government run, and so we think the risks of it losing its competitive advantages are low given entry barriers and substantial government investment to CRL's benefit. The upside is the increasing mobile penetration in China and an appreciating yuan relative to the dollar, both which make CHL an intriguing buy at $46.16.

Vodafone (VOD): With 346.8 million customers, Vodafone is the second-largest wireless phone company in the world after China Mobile. Also it’s the biggest carrier in terms of the number of countries served. In FY 2010 through March, the company grew revenues by 8.42% to $44.47 billion GBP ($71.34 billion), after rising by +15.86% in FY 2009. EBT margins also improved to 19.5% from 10.21%. EPS grew by 181.58% to 1.64 GBP ($2.63), after falling by 53.52%.

The company expects operating profit to be toward the upper end of the 11.8 to 12.2 billion GBP range ($18.93 billion to $19.57 billion) that was communicated in November. In FY 2010, operating profit was 9.48 billion GBP ($15.2 billion), which was +61.86%, after -41.58% in FY 2009.

Through Q3 2011, revenues are up 3.57%. The company reports FY 2011 results on May 17. VOD shares trade with a P/S of 2.1. The best multiples were from 2002 to 2006 with multiples near 3. The company has a debt to equity ratio of 0.35. We expect VOD to continue to trade 2.0-2.2 times sales per share for the rest of FY 2011.

Aside from its tremendous cash flows and truly global presence, another reason we like Vodafone is because it's not an incumbent telephone operator and it doesn’t face major underfunded pensions or regulations enforcing telephone service, like many of the other big names in the industry.

AT&T (T): As we mentioned earlier, AT&T is looking to go after the fourth largest cell phone provider in the states, T-Mobile. This provides valuable, complementary spectrum to AT&T's non-CDMA technology and an exit plan for Deutsche Telecom (DTEGY.PK). Shares trade at a P/E of 8.8, P/B of 1.5, and P/S of 1.4. The industry averages are 16.1, 2.0, and 1.4, respectively. From 2001 to 2007, T shares traded at a P/S of 2.9, 2.1, 2.1, 2.1, 1.9, 2.2 and 2.2, respectively. In 2010, EPS was $3.35, which was an increase of 58.02%, after decreasing by 1.85% in 2009. The company expects mid-single digit EPS growth or better in 2011. Q1 2011 results are set for release on April 21.

France Telecom (FTE): This company proposed a dividend of 1.40 euros ($1.914) per share for the fiscal years 2010, 2011 and 2012. This is a current yield of 8.4%. In the first nine months of 2010, revenues fell by 1.7% to 33.7 billion euros ($46.08 billion). Also, the 52-week trading range is $17.26 - $24.69. Shares are trading around $22.50 with a P/E of 15. The company is a France-based telecommunications operator that serves 203.4 million clients around the world. France Telecom was one of our 10 new dividend “kings” for this year.

Deutsche Telekom (OTCQX:DTEGY): Owner of T-Mobile, this company pays dividends on an annual basis, typically in April or May. The company aims to pay 0.7 euros ($0.957) in dividends annually through 2012. In 2010, the dividend per share was 0.78 euros, or a yield of 8.3%. Also, revenue fell 3% to 46.9 billion euros ($64.194 billion) in the first nine months of 2010, but EPS rose by 550%. Fiscal year 2010 results will be announced on Friday, February 25. For shares, the 52 week trading range is $10.57 - $14.77. It now trades under $14 with a P/E of 19.3. The company offers telecommunications and IT services to clients around the world. For more information on this company, check out this recent article here.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: What's Next for These 8 Telecom Giants?