It's been a promising year thus far for most telecom stocks - rewarding investors who have stuck with their investments through a steep decline the previous few years. Many analysts and investors have been predicting a turnaround for the US economy. A turnaround would produce an increase in corporate spending, especially in areas that during the lean years are the last to see a dollar spent.

Telecoms are a prime example. With interest rates at record lows, companies and governments globally will have added incentive to upgrade and expand their telecom systems. This is great news for the earnings of stocks in this sector.

Below are four of these stocks that investors should keep an eye on:

Canada's Nortel is one of the largest telecom equipment makers in the world. It produces wireless and optical systems for telephone carriers and data service providers. Nortel was one of the shooting stars during the Internet bubble, with its stock price trading over $80USD in mid-2000. When the bubble burst and the global telecom market collapsed, Nortel's star quickly burned out, sending its stock price to the equivalent of a cheap cup of coffee. Nortel's management appears to have been successful in bringing the company back to life by aggressively cutting costs, firing staff, outsourcing operations, and securing concessions from the Canadian government. Last quarter they avoided a loss for the first time in two years. Future success will depend on the global demand and control of corporate debt.

Adtran designs and develops high-speed digital transmission products for telephone companies and corporations. It has produced some great earnings as of late, including 27-cents a share for the first quarter of 2003 - a 16-cent improvement over the same quarter last year. Adtran has done well in expanding product sales and market share. This week second quarter earnings of 31 cents a share were announced, beating analyst expectations by 4 cents.

Amdocs is a leading supplier of operations software needed by telecommunication providers to deliver voice, data and wireless services. Like most other telecom companies they have had to cut costs and employees over the last few years. In the face of a difficult telecom market, they have done well in expanding markets and their range of businesses. In 2001 they purchased Clarify, a customer service software company, from Nortel for $200 million in cash-almost a $2 billion discount from where Nortel had bought the company a year earlier.

This California based company is a provider of communications equipment for service providers that operate wireless and wireline networks. This past week they announced that they have received a contract with China Telecom Corp. to supply more then 200,000 lines of its AN-2000IB product in 8 provinces throughout China. Getting a piece of this potentially lucrative Chinese telecom market is great news and gives UTStarcom great growth potential.