This week, in our focus on the winning analysts in each industry category from our

Analyst Rankings -- Equity 2000

, we profile the top analysts tracking telecommunications services stocks. Next week, we look at analysts covering wireless telecommunications services. (Our last focus was on

alternative carriers.)

The telecommunications sector has been in a state of transition and turmoil of late. In the past two weeks alone, two telecom giants,

AT&T

(T) - Get Report

and

WorldCom

(WCOM)

, have announced restructuring plans in an effort to separate operations and focus on growth. The restructurings come in the wake of declining long-distance revenues and slowing spending in the telecommunications and technology sectors.

To culminate a year that has seen its stock lose half its market cap, AT&T announced on Oct. 25 that it would split into four companies. Then, on Nov. 1, WorldCom, broadcast its intention to fissure into two entities through tracking stock, which allows it to retain ownership. At the same time, the company lowered its earnings expectations for this quarter and 2001. The market reacted by sending WorldCom's stock plummeting 20% in a single day. (

TheStreet.com

wrote about AT&T's latest

breakup, and also

WorldCom's, in separate stories.)

As it becomes increasingly difficult to sustain profits from consumer long-distance service, telephone companies are turning to Internet-related voice and data services as their chief profit generators. Companies who can make the transition from traditional voice service to Internet protocol and wireless services are the ones most likely to succeed, say our two winning analysts, No. 2 winner Tod Jacobs and No. 3 winner Simon Flannery. (Jack Grubman, our first-place winner, and Dan Reingold, who ties with Flannery for third place, were unavailable for interviews.)

Both Jacobs and Flannery believe that the regional Bell operating companies, or RBOCs, are better-positioned to respond to the quickly shifting telecommunications landscape than are long-haul carriers like AT&T. Not surprisingly, each chooses an RBOC as his top pick: Jacobs selects

SBC Communications

(SBC)

, while Flannery chooses

Verizon

(VZ) - Get Report

, the entity created from the merger in July of

Bell Atlantic

and

GTE

.

Integrated Telecommunications Services*

* First-place winner Jack Grubman and third-place (tie) winner Daniel Reingold were not available for interviews.

Rate Their Stock Picks:

Which stock do you like best?

Jacobs: SBC Communications

Flannery: Verizon

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