Telecommunications (telecom or telco) shares once reigned supreme as global stock market leaders, and although times have changed, there are still plenty of interesting investment opportunities in the sector. On the London Stock Exchange (LSE) alone, these stocks have a combined market cap of over £63 billion. That’s a lot of phone calls.
There’s no guaranteed way to determine the best telco stocks. But to give you some investing inspiration, below are the top telecom companies within the S&P Telecom Select Industry Index. This index is the telecommunications industry benchmark used to measure the performance of the sector.
| Icon | Stock | 1 year performance (to Sept. ’24) | 5 year performance (to Sept. ’24) | Link to invest |
|---|---|---|---|---|
 | Arista Networks (ANET) | +94.43% | +368.14% | Invest with XTBCapital at risk |
 | Motorola Solutions (MSI) | +20.19% | +169.18% | Invest with XTBCapital at risk |
 | Harmonic (HLIT) | -1.45% | +167.15% | Invest with XTBCapital at risk |
 | T-Mobile US (TMUS) | +14.02% | +135.52% | Invest with XTBCapital at risk |
 | Applied Optoelectronics (AAOI) | +1,052.63% | +40.93% | Invest with XTBCapital at risk |
 | F5 (FFIV) | +25.53% | +12.46% | Invest with XTBCapital at risk |
 | Frontier Communications (FYBR) | -0.58% | -1.51% | Invest with XTBCapital at risk |
 | AT&T (T) | -9.27% | -26.90% | Invest with XTBCapital at risk |
 | Verizon Communications (VZ) | -4.51% | -33.48% | Invest with XTBCapital at risk |
 | Telephone and Data Systems (TDS) | +74.67% | -47.06% | Invest with XTBCapital at risk |
The term “telco” is short for telecommunications. Telco stocks refers to companies within the telecoms sector. These firms provide services to people like you and me that allow us to contact friends, family, pets and whoever else – remotely.
Most of this happens digitally, but telecom stocks usually also control the physical infrastructure to make all this communication happen. This includes things like telegraph poles, cables and sometimes even satellites.
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The majority of the biggest and best telco shares right now are located in the US. America is the world’s global communications and tech hub, so this makes sense.
If you want to invest in leading telecom firms, you’ll want a platform that lets you buy US shares from the UK, and more specifically, the Nasdaq and New York Stock Exchange (NYSE).
If possible, it’s also worthwhile using an investing platforms with low or no commissions for accessing telco stocks, some examples include:
There are also plenty of top telco shares located outside the US as most countries have their own telecommunications industries and infrastructure. To access global telco shares, a few examples of platforms with a wide choice of investments available include:
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Here’s a rundown of some of the main benefits:
There are some drawbacks worth considering if you’re thinking about investing:
As the world changes, so does the way we categorise stocks. The main organisation that creates and modifies stock sectors is the MSCI Global Industry Classification Sector (GICS).
Telecommunication used to be its own sector, but today, there's a lot more blurred lines between telecoms and media companies. So, a few years ago the definition got a shake up and traditional telco stocks are now mingled in with media, entertainment and gaming products under the communication services sector.
Investing in telco stocks and shares isn’t quite the goldmine it may have been in the past. Fast growth has been swapped for steady income. The telecoms sector does face plenty of competition from tech and social media companies but it’s still an area that’s heavily used on a global scale with plenty of well-established companies.
Find out how you can invest in EE, and get the latest share price updates.
Looking to invest in telecommunication giant BT? Read our advice and guidance on how to buy BT Group shares. We also include a checklist that should come in handy for any investor.
