Top Telecom Companies to Watch in 2008

There are five companies I think will be worth watching closely in 2008, plus one honorable mention:

Qwest: New CEO Edward Mueller hasn't wowed anyone strategically yet, but maybe he won't need to. He said Qwest won't offer IPTV, but maybe it just doesn't make sense for its market profile. But, other questions remain: Will Qwest buy another telco, such as Time Warner Telecom? Can FTTN-boosted broadband be a difference maker without IPTV?

Sprint Nextel: New CEO Dan Hesse has a lot on his to-do list, including a review of Sprint's WiMAX strategy. Also, can he merge two distinctly different corporate cultures. Where does the company's wireline business fit in?

Google: Yes, an easy pick, but despite the Android effort and the company's plans to bid for 700 Mhz spectrum, the Web giant's real impact on telecom has yet to be felt. Will it continue to dance around telecom or jump in with both feet? Remember that even though it will bid on spectrum, that doesn't necessarily mean it will acquire spectrum.

Alcatel-Lucent: The big fix has begun. How far will it go, and will it work? The company has yet to show it can manage the mother of all vendor mergers, and as the model for further vendor consolidation, its success or further struggles will be widely felt.

Motorola: Is a break-up on the way, or does new CEO Greg Brown, taking the helm this month, have other plans? Can investor Carl Icahn be satisfied with anything less than a break-up? Though Motorola is mostly thought of as a wireless vendor, its wireline broadband acquisitions of recent years could hold the key to further success, break-up or not.

Honorable mention: Tellabs: This company epitomizes the challenges facing mid-tier telecom equipment vendors. During the third quarter of 2007, it seemed like Tellabs might get acquired by a bigger firm, but no such deal developed. Now, CEO Krish Prabhu has stepped down. Where does Tellabs go from here?