T. Rowe's Gensler Smells Cash in Telecom

Judging from your portfolio, it seems as if you are a fan of wireless as opposed to wireline telecom companies. What's your reasoning there?

Wireless is growing much faster than fixed-line, no question about that. The growth rates for wireless are about 5 points higher. And the valuations are about the same, which makes it a simple choice for me. I prefer things that are growing, but I also care a lot about valuation. Wireless has it both ways.

Wireless companies rarely pay dividends, though, whereas wireline companies typically do. In this dividend-happy environment, does that make a difference in your thinking?

That's not completely true. Vodafone(VOD Quote) is one of our larger holdings, and they pay a nice dividend. America Movil (AMX Quote) is a Latin American wireless provider that also pays a small dividend -- maybe not as much as a wireline player, but still they do pay back something to shareholders. Furthermore, they have bought back a lot of their stock this year, which is another way to reward shareholders. It's a less predictable way to do it, but you need to give them credit for it.

You spread your bets around across a number of countries, to say the least. Which regions look strongest to you?

I don't try and pick countries per se. I try to pick situations. In telecom it's important to be aware of regulations as well as the local competitive landscape across different regions. The trends are the same everywhere -- that is, we are going from fixed to mobile. And in media the trend is digital migration. We are seeing those same trends all over the world. The difference is really in the regulations and the structure of local industries.

The regulations, valuations and overall opportunities were far more compelling outside the U.S. 18 to 24 months ago. But the funny thing that has happened over the last year or so is that regulations in the U.S. have drastically improved, and the structure of the industry has improved through consolidation. The valuations still might be a little cheaper overseas, which is why we still are not totally swapping out of our foreign positions into domestic names.

What about the declining dollar? How is that affecting your stock selections abroad?

When I do a bottom-up analysis and find a good name in Europe, I put it through an extra filter now, a currency filter. And it's the first time in a long time I have had to do this. I am not trying to play the currency market, but the euro has already had a spectacular run-up against the dollar, which may make U.S. companies more attractive. It's less of a problem since many Asian currencies are pegged to the dollar.