Investors are eagerly awaiting


(VZ) - Get Report

's fourth-quarter results Tuesday to see whether the largest U.S. wireless firm lives up to its growth potential.

Verizon, which competes with


(T) - Get Report


Sprint Nextel

(S) - Get Report


Qwest Communications


, is seen as one of the telecom sector's

more attractive

stocks, thanks partly to recent shifts in the telecom market.

With rival Sprint

still struggling

, investors will be looking to see whether Verizon has managed to pick up any of its competitor's customers, as well as monitoring its recent



In June, Verizon said it would buy the privately-held wireless specialist and its 13 million subscribers for about $5.9 billion, a move which significantly increased its market reach. The firm finally completed the deal earlier this month, creating the largest U.S. wireless provider.

"Verizon wireless now has over 83 million subscribers, which leads AT&T by almost 10 million subscribers," wrote James Breen, an analyst at

Thomas Weisel & Partners

, in a recent note. "In our view, this scale will help Verizon Wireless broaden its network coverage in lower density population areas and maintain its high EBITDA margins by spreading costs over a larger customer base."

Shares of Verizon have fallen in line with the market during the first few weeks of 2009 after holding up much better than average in the October/November crash. Analysts are estimating fourth-quarter revenue of $24.74 billion and earnings of 61 cents a share.

"In our view, Verizon's wireless business remains healthy, in part, at the expense of weaker competitors," wrote David Barden, a research analyst at Bank of America, in a note. The analyst estimates that Verizon's average revenue price per cell-phone unit will be $51.43, reflecting "positive momentum" from smartphones.

Verizon's broadband and video businesses should also experience an uptick, according to Barden.

"We expect accelerating FiOS net adds, and we will look for the company's views on how deployment is progressing in New York and what major market launches may be expected in 2009," he wrote.

Barden warned that Verizon's wireline business could be a different story. "We project an increase in access line losses at Verizon and across the Incumbent Local Exchange Carrier (ILEC) universe due to wireless penetration, cable telephony competition and cyclical pressure," he wrote.

These sentiments were echoed by

Thomas Weisel & Partners

' Breen.

"Although Verizon's wireless unit continues to perform well, we see the current U.S. economic conditions taking a toll on the company's wireline business," he explained. "We believe the slowdown will be particularly felt in Verizon's northeast corridor markets where financial companies have been especially hard hit and the effects are just starting to be felt in other businesses."

Breen adds that Verizon is also losing residential phone customers at over 700,000 a quarter, thanks largely to losses from cable operators and the growth of wireless.

Verizon's shares rose 56 cents, or 1.84%, to $31 in Monday trading.