BALTIMORE (Stockpickr) -- Competition among cellular carriers isn't just serious these days -- it's potentially game-changing. As cellular companies vie for Americans' increasingly discretionary dollars, investors are starting to wonder whether there's any upside left in this nearly saturated industry.

You bet there is.

And with a handful of dominant cellular carriers dotting the market right now, there are still plenty of ways to play the next cellular trend.

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To be sure, investing in the U.S. cellular industry doesn't come with the same growth story it used to. With cellular services approaching 90% penetration domestically, stories of the cell phone as a burgeoning technology have largely played out. But the fact that most Americans own cell phones today is only part of the story -- another part is how they're using them.

By the end of next year, the number of smartphones (such as the iPhone, BlackBerry or Droid) used domestically is expected to grow by 50%. Even though hefty consumer subsidies encourage frequent phone upgrades, that's still eight times more growth than handsets as a whole over that same period. Growth in smartphones is especially significant because they deliver approximately 50% higher revenues per user than traditional phones, a phenomenon that's not been lost on carriers.

That said, here's a look at five cellular carriers worth watching this quarter.

In the next few years, courting the largest number of smartphone customers will be the key to top-line growth. AT&T ( T - Get Report) has adopted that strategy especially well, opting to pen an exclusive deal for Apple's ( AAPL - Get Report) smash-hit iPhone back in 2007.

The iPhone can be credited with pulling millions of higher-spending customers to AT&T, driving up the firm's margins and digging out a notable, if fleeting, economic moat in the process. Don't doubt the iPhone's impact on AT&T's business -- the device currently accounts for nearly 20% of the carrier's subscribers.

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For investors seeking income and appreciation, AT&T looks like a good bet right now. Not only do shareholders benefit from a hefty 5.72% dividend yield right now, they also stand to see shares gain in the near-term as AT&T catches up with the lofty performance of No. 1 rival Verizon ( VZ - Get Report).

Like AT&T, Verizon has worked hard to transition from the slimmer margins of its fixed line business, pouring cash into its more appealing wireless segment. That investment has paid off; today the mobile customers represent the biggest piece of each company's sales.

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Today, Verizon is still the clear leader, with more than 90 million subscribers, but to be fair, with 87 million subscribers, AT&T's shareholders actually control a bigger piece of America's mobile network. Since Verizon Wireless is 55% owned by Vodaphone ( VOD), Verizon only sees the benefits of its share. Like AT&T, Verizon sports a sizable dividend yield, though what the company lacks in iPhone exclusivity, it's made up for in overall growth.

In the latest quarter, Verizon bested its prior-period subscriber growth numbers by 57%, adding 665,000 postpaid wireless customers to its banner while simultaneously boosting revenue per user. That's quite a feat, and it's one that Wall Street hasn't ignored, bidding up shares double-digits in the last year. Bringing up the rear of the big-three carriers is Sprint ( S - Get Report), the company that coincidentally has the best chances of delivering investors with a coup in the coming years. With less than 50 million subscribers, a much higher debt load and no allure to income investors, Sprint has long been the underdog of the wireless business. But aggressive marketing is helping the company to attract new customers this year and curb the customer attrition that had crippled the carrier in years past.

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Heightened competition in wireless carriers has pushed cellular service into commodity status, and few have taken advantage of that as much as Sprint. While the firm can't compete with its network, it's offering investors an impressive price with its dirt-cheap unlimited plans. In the same breath, Sprint has fought off the wireless industry's "sameness" by branding niche virtual network operators like Virgin Wireless and Boost Mobile.

Relative newcomers like MetroPCS ( PCS) and Leap Wireless ( LEAP) are following suit by selling themselves based on the discount unlimited model and serving around 12 million customers between them. The latter, Leap, has already announced partnership deals with Sprint, while MetroPCS is rumored to be a potential acquisition target for the No. 3 carrier.

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The main difference between MetroPCS, Leap and the rest of the crowd is payment. While the traditional carriers focus most of their attention on more profitable postpaid customers (who pay their bills after they use their minutes), MetroPCS and Leap are more interested in prepaid customers, who are often willing to pay a premium for the low switching costs they enjoy.

While both of these smaller carriers offer the most subscriber growth potential right now, they're not surprisingly substantially riskier than their larger counterparts.

To see all of these cellular plays in action, check out the U.S. cellular stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.