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Up first is AT&T ( T), the "second largest" wireless carrier in the U.S. with 92 million cellular subscribers. Calling AT&T the No. 2 player is a bit of a misnomer. While the company is the firm does have fewer wireless customers than rival Verizon's ( VZ) wireless arm, AT&T's shareholders own 100% of its wireless business while VZ only owns a pro-rata share of a 51-million subscriber business. While wireless may be AT&T's most visible business, the firm also has a huge fixed-line unit, which provides service to 37 million phone customers, 16 million internet users and 4 million television viewers.

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Ultimately, the telecom business is a relationship business. That's become especially true now that technology advances allow AT&T to compete with more communications companies than ever before. AT&T has been leveraging its relationships to offer triple-play deals that bundle voice, Internet and television services in a single package. Those bundled deals provide AT&T with much larger margins and, in turn, much larger cash flows.

The communications business isn't cheap to operate in. Capital requirements are massive, and the need to spend mountains of cash on infrastructure equipment feels incessant. Even so, AT&T has managed to keep its balance sheet in strong shape while it throws off cash to pay out a hefty dividend. As I write, AT&T's 4.98% dividend makes it the top-yielding Dow component.

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